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CONSUMER SPENDING PRIORITIES - CHINA - MARCH 2017

Published By :

Mintel

Published Date : Mar 2017

Category :

Banking

No. of Pages : N/A

The relaxation of the one-child policy and the returning migrating population due to the climbing living cost in tier one cities have made a noticeable impact on the spending priorities of Chinese families. Marketing messages could target specifically those confident yet under-pressure younger generations.

Table of Content

OVERVIEW
What you need to know
Covered in this Report
Definition
Figure 1: Definition of different monthly household income groups, by city tier, November 2016

EXECUTIVE SUMMARY
Macroeconomic background
A ‘new normal’ phase of economic development
Figure 2: GDP per capita and growth rate in China, 2010-16
Heading towards a consumption-driven economy
Figure 3: Average annual disposable income and growth rates of urban and rural residents, 2011-16
Living costs differ in different tier cities
Figure 4: Consumer Price Index, January 2013-December 2016
The consumer
The re-bound in spending confidence
Figure 5: Confidence in improving future financial situation, 2013-16
Figure 6: Current financial status, by monthly household income, November 2016
Concerns about health are the most influential
Figure 7: Confidence influencing factors, claim rate on ‘have a great impact’, November 2016
Spending more on discretionary sectors
Figure 8: Claim rate of ‘spend more’ on selected sectors, 2013, 2015 and 2016
Figure 9: Claim rate of ‘spend more’ on selected categories, by company type, November 2016
Using different promotions to target specific consumer groups
Figure 10: The most interested promotion method, by gender, November 2016
Figure 11: Preference for selected promotion method, by household size, November 2016
Going for the best on offer and buy when in need
Figure 12: Spending habits of Chinese consumers, November 2016
What we think

ISSUES AND INSIGHTS
What is driving the re-bound in spending confidence?
The facts
The implications
What brands can do facing more rational consumers?
The facts
The implications
How exactly do young people spend their money?
The facts
The implications

MACROECONOMIC BACKGROUND
What you need to know
Disposable income rises faster than GDP growth
Steering towards a consumption-driven economy
Complex changes in living costs

MARKET FACTORS
Economic growth is expected to remain below 7% per year
Figure 13: GDP growth rate in China, 2014 Q1 – 2016 Q4
Figure 14: GDP per capita and growth rate in China, 2010-16
The continuously reshaping industry structure
Figure 15: Composition of GDP, by the three strata of industry, 2010-16
Employment remains robust
Disposable income rises faster than GDP growth
Figure 16: Average annual disposable income and growth rates of urban and rural residents, 2011-16
Even faster expanding spending power of rural residents
Figure 17: The proportion of spending to disposable income of urban and rural residents, 2011 – 16
Milder increases in living costs
Figure 18: Consumer Price Index, January 2013-December 2016
Another heated year for the property market
Figure 19: Volume and the average price of traded residential properties, 2011-16
Slowing down in migration
Figure 20: Migrant population, 2011-16

THE CONSUMER – WHAT YOU NEED TO KNOW
Re-bound in spending confidence
Healthy status as the most influential factor
Plans to spend more, especially on discretionary sectors
Promotion method preferences vary between consumer groups
More divided consumption habits

CURRENT FINANCIAL STATUS
While saving is a norm, not many can save a big amount
Figure 21: Current financial status, December 2013 versus November 2016
25-39-years-olds have the healthiest financial status
Figure 22: Current financial status, agreement on ‘I can save a considerable amount of money at the end of the month’, by gender and age, November 2016
Saving accumulates with income increase, but not always in a linear way
Figure 23: Current financial status, by monthly household income, November 2016

CONFIDENCE IN IMPROVING FUTURE FINANCES
Highest since 2013
Figure 24: Confidence in improving future financial situation, 2013-2016
Millennials are driving up the overall confidence
Figure 25: Confidence in improving future financial situation, claim rate of ‘very confident’, by age group, 2014-16
Confident lower tier city residents
Figure 26: Confidence in improving future financial situation, claim rate of ‘very confident’, by city tier, 2013-2016
Affluent consumers’ confidence remains consistently strong
Figure 27: Confidence in improving future financial situation, claim rate of ‘very confident’, by monthly household income, 2013-16
Some making-ends-meet people are also confident spenders
Figure 28: Confidence in improving future financial situation, by current financial situation, November 2016

CONFIDENCE INFLUENCING FACTORS
Health becomes the top influencing factor
Figure 29: Confidence influencing factors, claim rate on ‘have a great impact’, November 2016
Sensitive 20-24-year-olds
Figure 30: Selected confidence influencing factors, claim rate of ‘have a great impact’, by age group, November 2016
Lower mention of investment products
Figure 31: Top three confidence influencing factors, 2016 survey compares 2015 and 2013’s
36% consumers say they are influenced by others
Figure 32: Selected confidence influencing factors, claim rates of ‘have a great impact’, by monthly household income, November 2016
Employment situation is more influential on mums

SPENDING PRIORITIES IN THE NEXT 12 MONTHS
Less saving, more experiential spending
Figure 33: Spending changes, claim rate of ‘spend more’, 2013, 2015 and 2016
Mums of more than one kid are spending more on beauty treatment
Consumers with higher educational levels exercise more
20-24-year-old females plan to travel more
Spending patterns relate with types of organisations consumers work at
Figure 34: Claim rate of ‘spend more’ on selected categories, by company type, November 2016

EFFECTIVE PROMOTIONS
Direct and with fun
Figure 35: The most interested promotion method, November 2016
Males, instead of females, show higher interest in promotions, but they are motivated by different incentives
Figure 36: The most interested promotion method, by gender, November 2016
Attracting specific consumer groups with different promotions
Figure 37: Preference on selected promotion method, by educational level, November 2016
Figure 38: Preference on selected promotion method, by household size, November 2016
Figure 39: Preference on selected promotion method, by monthly personal income, November 2016

SPENDING HABITS
Quite divided spending habits
Figure 40: Spending habits, November 2016
Young men and women have different views about big ticket spending
Figure 41: Giving up big ticket spending or not, by age and gender, November 2016
Affluent consumers are more likely to be in the sentiment of living for the moment…
Figure 42: Live for the moment or prepare for the worst, by monthly household income and family structure, November 2016
Figure 43: Giving up big ticket spending or not, by living the moment or preparing for the worst, November 2016
Yet they manage spending with strict saving plans in the meantime
Figure 44: Having a strict saving plan or not, November 2016
Figure 45: having a strict saving plan or not, by living for the moment or preparing for the worst, November 2016
Figure 46: Current financial status, by spending control preference, November 2016
The majority prefer buying what they need instead of what’s on sale
Figure 47: Buying what they need or what is on promotion, by age and gender, November 2016
The trading up trend
Figure 48: Value-for-money or the best one can afford, November 2016
Figure 49: Value-for-money or the best one can afford, by custom consumer group, November 2016

MEET THE MINTROPOLITANS
More than half of MinTs are very confident about the future
Figure 50: Current financial status, by consumer classification, November 2016
Figure 51: Confidence in improving future financial situation, by consumer classification, November 2016
MinTs care more about economy, environment and investment return
Figure 52: Confidence influencing factors, claim rate of ‘have a great impact’, by consumer classification November 2016
MinTs plan to spend more on self-improvement and entertainment
Figure 53: Spending changes, claim rate of ‘spend more’, by consumer classification, November 2016
MinTs show the future trend of spending habits
Figure 54: Consumption habits, by consumer classification, November 2016

APPENDIX: METHODOLOGY AND ABBREVIATIONS
Methodology
Abbreviations

List of Table

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