Chinese consumers rate quality above price
A new report has shown that 91 per cent of Chinese consumers agree that when making a purchase, quality is more important than price.
The research from Mintel’s annual The Chinese Consumer Report offers an overview of the key trends and spending behaviours affecting China’s consumer landscape over the last year. It also shows that more than four in five (81 per cent) of respondents are interested in trying something new rather than sticking to the familiar (for example: buying a new product or going to a new holiday destination).
The new Mintel research reveals that total consumer expenditure in China grew 8.6 per cent to reach RMB41.146 billion (US$5.987 billion) last year. While this is an apparent slowdown when compared to the 11.2 per cent growth seen in 2017, expenditure grew in line with China’s per capita disposable income of 8.7 per cent.
“With China’s economy still experiencing healthy growth, Chinese consumers, today, are increasingly in pursuit of richer experiences and quality of life,” said Mintel China Reports category director Jessica Jin.
“Furthermore, our research shows that they are becoming savvier spenders. Consumers are willing to pay a premium for products and services that offer them new and richer experiences that align with their values – and it is the stable growth of disposable income that is supporting this lifestyle. When it comes to basic daily offerings, value for money is still the top consideration.”
Household-care products is the top sector where decreased prices or discounting has played a big part in driving consumers to spend less, as indicated by the 43 per cent of Chinese respondents who have spent less on household-care products (for example: tissue paper or household-cleaning products). On the other hand, consumers are willing to spend more for broader, self-indulgent experiences; as many as 84 per cent of Chinese respondents who have spent more on holidays in the last year did so to treat themselves.
Mintel’s research further reveals that personal finance and housing remains to be the biggest consumer spending sector, accounting for 23.7 per cent of total consumer expenditure last year. This is followed by in-home food (14.3 per cent), holidays (9 per cent) and clothing and accessories (8.1 per cent). Looking ahead, Mintel predicts that holidays, transportation, and personal finance and housing will be the top three sectors with the highest growth in terms of consumer spending, reaching a CAGR (compound annual growth rate) of 12.8 per cent, 10.2 per cent and 10.1 per cent respectively, in the five years to 2023.
“China’s stable economy in 2018 has driven consumer demands beyond basic necessities like food and drink, towards more emotional requirements like attaining enjoyment from holidays, leisure and entertainment,” said Jin.
“With more and more consumers pursuing a better quality of life and wanting more new life experiences, sectors such as holidays, leisure and entertainment, and clothing and accessories, have encouraged many consumers to self-indulge and spend more in 2018. Meanwhile, increasing expenditure on essentials like in-home food, for instance, is driven by rising prices in the market.”
Mintel’s annual report tracks consumer spending across 15 market sectors, revealing the future opportunities with each category.