Chinese Consumers in Flux
Chinese consumers' values and behaviours are changing due to greater disposable income. One-size-fits-all strategies no longer apply to this huge, diverse market, according to a November 2017 report from global management consultancy McKinsey.
- High Consumer Confidence Levels: Because Chinese consumers are earning more, they're investing in more expensive, higher-quality items: one-fifth of respondents reported trading up to a more expensive brand. However, it's unclear whether consumer confidence levels will remain high as income growth has slowed, dropping from 10.1% in 2012 to 6.3% in 2016.
- Rising Interest in Health and Fitness: With more money to spend, Chinese consumers are increasingly investing in health and fitness. Sixty-five per cent describe themselves as 'health-conscious', with this figure rising among city dwellers (see also Luxury in a Turbulent World).
- The Post-90s Generation Are Not Millennials: Aged 17-27, this post-90s group differs from other generations – including post-80s millennials. They experienced more wealth and grew up at a time when China was more exposed to Western culture, and therefore cannot be grouped under the broader term "millennials". The post-90s generation will account for 20% of consumption growth in China between now and 2030, so brands should treat them as a completely different segment.
- Brands' Origins Matter Less: Today's Chinese consumers are more interested in value for money than origins when it comes to the brands they choose. In 2017, Chinese brands accounted for 63% of the market in the personal digital devices category, while in other categories such as cosmetics and wine, foreign brands are preferred.
For more on the changing values of China's younger generations, see China's Youth: Challenger Consumers.