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CONSUMER SPENDING PRIORITIES-CHINA-MARCH 2018

Published By :

Mintel

Published Date : Mar 2018

Category :

Lifestyle

No. of Pages : N/A

There are many grounds to believe continuous growth in consumer spending will take place in 2018, but businesses should not simply conclude that growth will be easy in every sector. When it comes to luxury indulgences, holidays and beauty services are going to catch more share of consumers’ discretionary spending. However, all brands need to continuously bring excitement in their products and services or they can be easily seen as boring and lose appeal.

Table of contents
OVERVIEW
What you need to know
Covered in this Report
EXECUTIVE SUMMARY
The economy remains in a good shape
Figure 1: Gross Domestic Product growth rate (vs same period last year), China 2013 Q3-2017 Q4
Stronger spending growth coming from rural China
Figure 2: Growth in per capita income and expenditure, by urban and rural, China 2017
Most consumers have maintained a healthy financial status…
Figure 3: Current financial situation, 2016-17
…and feel confident about future financials
Figure 4: Confidence in improving financial status over the next 12 months, 2013-17
A stronger willingness to spend beyond Beijing and Shanghai
Figure 5: Overall spending willingness in the next 12 months, by city, December 2017
Holiday and beauty services going to take the lead in discretionary spending
Figure 6: Ways of spending annual bonus, December 2017
Paying by instalments is becoming more common
Figure 7: Usage of instalment payments in the past 12 months, December 2017
Proactive financial management instead of a last resort
Figure 8: Reasons for using pay by instalment payments, by service provider, December 2017
What we think
ISSUES AND INSIGHTS
What does consumer sentiment say about 2018?
The facts
The implications
Which sectors are going to benefit from more discretionary spending?
The facts
The implications
Are consumers prepared to spend tomorrow’s money today?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Macro-economy in a good shape
Consumer spending remains strong, though further room for growth exists
STATE OF THE ECONOMY
GDP growth accelerated to 6.9% in 2017
Figure 9: Gross Domestic Product growth rate (vs same period last year), China 2013 Q3-2017 Q4
CPI under control
Figure 10: Consumer Price Index, China January 2015-December 2017
Lowest unemployment since 2002
Spending growth remains solid, especially in rural China
Figure 11: Total retail sales of consumer goods, China 2008-17
Figure 12: Per capita disposable income and expenditure, China 2014-17
Figure 13: Growth of per capita disposable income and expenditure, by urban and rural China. 2014-17
THE CONSUMER – WHAT YOU NEED TO KNOW
The majority have healthy finances
Overall confidence about future remains high
More discretionary spending going to services
Consumers are getting used to paying by instalments
CURRENT FINANCIAL SITUATION
Signs of more polarising spending habits
Figure 14: Current financial situation, 2016-17
Young females are most relaxed about saving
Figure 15: Current financial situation, by age and gender, December 2017
Key household income thresholds
Figure 16: Current financial situation, % of “I can save a considerable amount of money at the end of the month”, by monthly household income, 2016-17
Property ownership still makes a big difference
Figure 17: Current financial situation, by property ownership, December 2017
CONFIDENCE IN IMPROVING FUTURE FINANCES
Overall confidence still remains high
Figure 18: Confidence in improving financial status over the next 12 months, 2013-17
But not all groups feel the same
Figure 19: Confidence in improving financial status over the next 12 months, % of “very confident”, by age and city tier, 2013-17
White collar workers in foreign enterprises are least confident
Figure 20: Confidence in improving financial status over the next 12 months, % of “very confident”, by occupation and company type, 2013-17
Those spending more than they should are becoming less confident
Figure 21: Confidence in improving financial status over the next 12 months, by current financial situation, 2017 vs 2016
FUTURE SPENDING SENTIMENT
More than half would spend more
Figure 22: Overall spending willingness in the next 12 months, by confidence in future financial status, December 2017
Young males are ready to open their purses
Figure 23: % willing to spend more in the next 12 months vs % can currently save considerably, by age and gender, December 2017
Lower tier cities catching up
Figure 24: % willing to spend more in the next 12 months vs % can currently save considerably, by city, December 2017
WAYS OF SPENDING ANNUAL BONUS
Beauty treatments going to take a bigger share of people’s pocket
Signs of getting weary about fashion, expensive meals, and consumer electronics
Figure 25: Ways of spending annual bonus, December 2017
Demographic differences
Figure 26: Selected ways of spending annual bonus, by city tier, December 2017
USE OF INSTALMENT PAYMENT
Seven in 10 have used some sort of pay by instalments services
Figure 27: Usage of instalment payments in the past 12 months, December 2017
Are young consumers more open to paying by instalments?
Figure 28: Usage of instalment payments in the past 12 months, by age, December 2017
Higher earners are more likely to pay by instalments
Figure 29: Usage of instalment payments in the past 12 months, by household income and region, December 2017
Self-willing rather than a last resort
Figure 30: Reasons for using pay by instalment payments, by service provider, December 2017
MEET THE MINTROPOLITANS
Significantly more MinTs are better off
Figure 31: Current financial situation, by consumer classification, 2016-17
A wider gap between MinTs and Non-MinTs
Figure 32: Confidence in improving financial status over the next 12 months, by consumer classification, 2015-17
Holidays, beauty treatments, cultural events and cars
Figure 33: Ways of spending annual bonus next time, by consumer classification, December 2017
More proactive use of pay by instalment services as a finance tool
Figure 34: Reasons for using pay by instalment payments, by consumer classification, December 2017
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Abbreviations

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