Study: Con­sumers shift­ing to­ward more high-end prod­ucts

China Daily (Canada) - - BUSINESS - By YU RAN in Shang­hai yu­ran@chi­nadaily.com.cn

Chi­nese con­sumer con­fi­dence has re­mained sur­pris­ingly re­silient over the past three years de­spite the slow­ing eco­nomic growth, as a re­sult of more se­lec­tive and care­ful spend­ing, ac­cord­ing to a newre­port fromMcKin­sey & Co.

Daniel Zipser, part­ner in McKin­sey’s Shang­hai of­fice and leader of its China con­sumer and re­tail prac­tice, said shop­pers have been shift­ing their fo­cus to premium seg­ments, away from what are con­sid­ered mass-pro­duced items.

Half of the re­spon­dents in the McKin­sey’s 2016 China Con­sumer Re­port said they look specif­i­cally for the best, most ex­pen­sive prod­ucts, a sig­nif­i­cant in­crease on pre­vi­ous years. The same share said they are al­lo­cat­ing more of their in­come to life­style ser­vices and ex­pe­ri­ence spend­ing.

“Chi­nese con­sumer trends tend to shift inanin­stant, thanks to the con­tri­bu­tion of so­cial me­dia, and at the mo­ment they have turned to­ward premium prod­ucts,” said Zipser.

The re­search was gath­ered from 10,000, aged be­tween 18 and 65 in 44 cities, who were given 60-minute face-to-face in­ter­views.

Zipser said a ris­ing pro­por­tion of Chi­nese con­sumers are also fo­cus­ing their loy­alty onto fewer brands, and the num­ber will­ing to switch to brand names out­side their “short list” is dropped sharply.

Gong Fang, an­other part­ner in McKin­sey’s Shang­hai of­fice, said in the ap­parel sec­tor, the num­ber of con­sumers will­ing to con­sider a brand they hadn’t bought be­fore, dropped from 40 per­cent in 2012 to just be­low 30 per­cent last year.

“It is essen­tial for both in­ter­na­tional and do­mes­tic brands to un­der­stand and re­spond to such changes in Chi­nese spend­ing habits,” said Gong.

An­other ma­jor trend was that moreChi­nese con­sumers are spend­ing money out­side China dur­ing overseas trips.

The study sug­gested 70 mil­lion Chi­nese trav­eled overseas in 2015, mak­ing 1.5 trips on av­er­age, with shop­ping an ex­pe­ri­ence.

Of those, 80 per­cent made pur­chases, and nearly 30 per­cent ac­tu­ally chose des­ti­na­tions based on their shop­ping op­por­tu­ni­ties.

Among in­ter­na­tional trav­el­ers, around half make their pur­chases of watches and hand­bags, while ap­parel and cos­met­ics were the most fre­quently bought cat­e­gories.

“Overseas shop­ping will re­main pop­u­lar among Chi­nese con­sumers who are mostly tak­ing on trips as groups and fam­ily units,” saidGong.

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Overseas shop­ping will re­main pop­u­lar among Chi­nese con­sumers...”

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