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Consumer Spending Priorities - China - March 2017

“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.”

–    Aaron Guo, Senior Analyst, China

This report will cover the following areas:

  • What is driving the re-bound in spending confidence?
  • What brands can do facing more rational consumers?
  • How exactly do young people spend their money?

 

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Table of contents

  1. 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

                                                                Companies Covered

                                                                To learn more about the companies covered in this report please contact us.

                                                                Consumer Spending Priorities - China - March 2017

                                                                US $3,990.00 (Excl.Tax)