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Consumer Spending Priorities - China - March 2015

“The Chinese economy grew by 7.4% in 2014, the lowest rate since 1990. According to the government, the goal of economic growth has been adjusted to around 7% a year during the 13th five-year plan from 2016 to 2020. This suggests that slower growth rates than previously recorded will become the norm for the Chinese economy in the near future.

The overall confidence levels of Chinese consumers have remained constant in the last year, indicating that changing macroeconomics conditions have not yet had a direct impact on their lives. In fact, the growing status of consumption sectors in the economy shows that the spending power of consumers has become stronger.”
– Linda Li, Senior Research Analyst

In this report, Mintel answers the following key questions:

  • What are the current financial statuses of consumers and how confident are they about these over the next 12 months?
  • What are the financial priorities of consumers over the next 12 months?
  • Has there been any change in the way consumers think about saving, spending and managing their financial wellbeing in the current economic environment?
  • What kind of spending are consumers most reluctant to cut when they have a tight budget?
  • Do consumers value quantity or quality when making a purchase?

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Table of contents

  1. Introduction

      • Definition
        • Methodology
          • Abbreviations
          • Executive Summary

              • The consumer
                • Despite the economic slowdown, Chinese consumers have maintained confidence
                  • Figure 1: Confidence in improving future finances, December 2014
                • Chinese consumers are saving more for long-term uncertainty
                  • Figure 2: Financial priorities in the next 12 months, December 2014
                • Spending within limits is the norm in China
                  • Figure 3: Spending habits – expenditure versus income, December 2014
                • Holidays/travel most likely to be cut on a tight budget
                  • Figure 4: Expenditure mostly likely to be cut when on a tight budget, December 2014
                • Older women are more likely to consider quality over quantity in clothing and personal care
                  • Figure 5: Ways of controlling expenditure, December 2014
                • Chinese consumers are still easily enticed by discounts and shopping environments
                  • Figure 6: Attitudes towards financial management, December 2014
                • Key issues
                  • People are still confident about future finances, but getting more wary
                    • 30 to 39-year-olds are a critical group for businesses to target
                      • More opportunities for business to offer higher quality products and services
                        • International operators can entice Chinese consumers via online shopping festivals
                          • What we think
                          • Issues and Insights

                              • People are still confident about future finances, but are becoming wary
                                • The facts
                                  • The implications
                                    • 30 to 39-year-olds are a crucial target for businesses
                                      • The facts
                                        • The implications
                                          • More opportunities for business to offer higher quality products and services
                                            • The facts
                                              • The implications
                                                • Opportunities remain for international operators to entice Chinese consumers via online shopping festivals
                                                  • The facts
                                                    • The implications
                                                    • Trend Applications

                                                      • Help Me Help Myself
                                                        • Let’s Make a Deal
                                                          • Immaterial World
                                                          • Macroeconomic Background

                                                            • Economic growth is expected to slow further
                                                              • Figure 7: GDP growth rate in China, 2004-14
                                                            • Unemployment rate remains constant
                                                              • Figure 8: Urban unemployment rate in China, 2004-14
                                                            • Average wage grows at double digits
                                                              • Figure 9: Average wage of urban employees in China, 2004-13
                                                            • CPI has fallen to five-year low
                                                              • Figure 10: Consumer price index, January 2012 - December 2014
                                                            • More money in the market to stimulate investment
                                                              • Figure 11: Money supply growth in China, 2013-14
                                                          • The Consumer – Confidence in Improving Future Finances

                                                            • Key points
                                                              • Despite the economic slowdown, consumers are still confident in improving future finances
                                                                • Figure 12: Confidence in improving future finances, December 2014
                                                                • Figure 13: Confidence in improving future finances, “Very confident”, by gender and age group, December 2014
                                                                • Figure 14: Confidence in improving future finances, by marital status and by children in household, December 2014
                                                              • Better education still provides more confidence to consumers
                                                                • Figure 15: Confidence in improving future finances, by education level, December 2014
                                                              • Overall consumer confidence remains the same
                                                                • Figure 16: Confidence in improving future finances, comparison of December 2014 and December 2013
                                                              • Older male consumers are becoming more confident
                                                                • Figure 17: Confidence in improving future finances, “Very confident”, by gender and age, 2013 versus 2014
                                                            • The Consumer – Financial Priorities in the Next Year

                                                              • Key points
                                                                • Chinese consumers still save amid uncertainty
                                                                  • Figure 18: Financial priorities in the next 12 months, December 2014
                                                                • People are saving more
                                                                  • Figure 19: Financial priorities in the next 12 months, mean value*, 2013 versus 2014
                                                                • Mortgages regain in importance
                                                                  • Figure 20: Selected financial priorities in the next 12 months, “Paying off my mortgage/saving for buying property”, 2013 versus 2014
                                                                • Spending money on self-indulgence is the least important task
                                                                  • Figure 21: Importance of financial tasks, “Spending money on self-indulgence (eg eating at premium restaurant, holidays, luxury products)”, by age, December 2014
                                                                • City differences
                                                                  • Figure 22: Selected finance priorities, “Important”, by tier and by city, December 2014
                                                              • The Consumer – Spending Habits – Expenditure vs Income

                                                                • Key points
                                                                  • Spending within means is still the norm
                                                                    • Figure 23: Spending habits – expenditure versus income, December 2014
                                                                  • Men are more likely to be financially self-disciplined
                                                                    • Figure 24: Spending habits – expenditure versus income, by gender, December 2014
                                                                  • Consumers from tier one cities are more cautious than tier two/three cities
                                                                      • Figure 25: Spending habits – expenditure versus income, “I can save a fixed amount of money at the end of the month”, by city, December 2014
                                                                  • The Consumer – Expenditure to Cut When on a Tight Budget

                                                                    • Key points
                                                                      • Travelling is the most elastic expenditure
                                                                        • Figure 26: Expenditure mostly likely to be cut when on a tight budget, December 2014
                                                                      • Household-related expenditure has space for upgrading
                                                                        • Out-of-home expenditure also bears the brunt
                                                                        • The Consumer – Ways of Controlling Expenditure

                                                                          • Key points
                                                                            • People downgrade necessary expenditure
                                                                              • Figure 27: Way of controlling expenditure, decrease frequency vs downgrade, December 2014
                                                                            • Long purchase cycle of household products gives more room for manufactures to adjust their strategy
                                                                              • Consumers prefer free solutions to keep healthy
                                                                                • Figure 28: Way of controlling expenditure, “Totally cut the spending in this area”, December 2014
                                                                              • Older women are less likely to downgrade clothing and cosmetics
                                                                                • Figure 29: Way of controlling expenditure, Appearance and personal care*, by gender and age, December 2014
                                                                            • The Consumer – Attitudes towards Financial Management

                                                                              • Key points
                                                                                • Higher earners struggle to resist the temptation of buying in a shopping atmosphere
                                                                                  • Figure 30: Attitudes towards financial management, “I can’t help buying when there is a shopping atmosphere”, by monthly household income, December 2014
                                                                                • Younger women are more likely to be enticed
                                                                                  • Figure 31: Attitudes towards financial management, December 2014
                                                                                • Good financial management contributes to financial confidence
                                                                                  • Figure 32: Selected financial Management Behaviours, by confidence level in future finances, December 2014
                                                                                • Consumers in their 30s need instalment payments most
                                                                                  • Figure 33: Attitudes towards financial management, by age, December 2014
                                                                                • The influence of family cannot be overlooked in financial management
                                                                                  • Figure 34: Attitudes towards financial management, December 2014

                                                                              Consumer Spending Priorities - China - March 2015

                                                                              US $3,990.00 (Excl.Tax)