Table of Contents
Executive Summary
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- Consumer confidence change: consumers are more cautious, but no sign of consumption downgrading
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- Figure 4: Confidence in improving future finances, by city tier, 2020
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- Figure 5: Actions to control spending – actions to take first, February 2020
- Acceptance of spending on credit: it brings “cumulative” pleasure
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- Figure 6: Affinity credit cards, by city tier, May 2020
- Attitudes towards luxury spending: the needs for differentiation and expanding usage occasions
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- Figure 7: Attitudes towards luxury spending, by city tier, May 2020
- Brand perceptions and selections: promoting brand image through cultural characteristics
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- Figure 8: Impression comparison between premium domestic brands and foreign brands, December 2019
- Focuses in leisure spending: a combination of online content and offline shopping
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- Figure 9: Attitudes towards arts and crafts activities, by city tier, September 2019
- What we think
Introduction to lower tier cities in China
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- Population and spending power
- Spending by Tier 3 and lower cities increases and takes a larger share
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- Figure 10: City populations and sales, by city tier, end of 2018
- Per capita disposable income and spending power grows
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- Figure 11: Per capita salary vs per capita retail sales, by city tier, 2018
- Spending confidence since the COVID-19 outbreak
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- Figure 12: GDP sector compositions, by city tier, 2018
- Figure 13: Changes in financial status, percentage of respondents claiming they are ‘better off’, by city tier, February-September 2020
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- Figure 14: Confidence in improving future finances, very confident – somewhat confident, by city tier, February-September 2020
- Demographic profile/analysis
- Gaps between city tiers narrowing in both economic and educational respects
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- Figure 15: Educational level of surveyed respondents, June 2017-20
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- Figure 16: Car ownership and gym membership, by city tier, June 2017-20
Consumer confidence change: consumers are more cautious, but no sign of consumption downgrading
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- What difference does quantitative data suggest?
- Confidence in improving financial status slightly weaker than in Tier 1 and 2 cities
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- Figure 17: Confidence in improving future finances, by city tier, March-September 2020
- Consumer concerns did not lead to consumption downgrading
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- Figure 18: Actions to control spending – actions to take first, February 2020
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- Figure 19: Actions to control spending – actions to take first, June 2020
- Why the difference as suggested by qualitative research?
- The pursuit for brands stays the same, but consumers are more sophisticated
- A positive correlation between the pursuit of brand names and income
- What does this mean for brands?
- Consumers are more cautious, but no sign of consumption downgrading
- Case study: “multi-step inspection” by Dewu
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- Figure 20: The Dewu APP, 2020
- Case study: JD.com offers hassle-free trial with digital products
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- Figure 21: Hassle-free trial service by JD.com, 2020
Acceptance of spending on credit: it brings “cumulative” pleasure
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- What difference does quantitative data suggest?
- Promotions encourage consumers to spend on credit
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- Figure 22: Credit and loan used, by city tier, May 2020
- Affinity cards co-branded with ecommerce and shopping malls are most popular
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- Figure 23: Affinity credit cards, by city tier, May 2020
- Why the difference as suggested by qualitative research?
- Daily discounts provide “cumulative” pleasure
- Young people “buy it now and start enjoying it today”, while the middle-aged save for a rainy day
- What does this mean for brands?
- Spending on credit brings “cumulative” pleasure
- Case study: “Diverse Youths” credit cards for young people by Bank of Communications
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- Figure 24: The “Diverse youths, let’s be friends” campaign of Bank of Communications credit card, 2020
Attitudes towards luxury spending: the needs for differentiation and expanding usage occasions
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- What differences does the quantitative data reveal?
- Desire for premium products has been sharply impacted
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- Figure 25: Attitudes towards luxury spending, by city tier, May 2020
- Luxury products need to have something both “in common” and “personal”
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- Figure 26: Factors affecting luxury fashion purchase, by city tier, February 2020
- Why the difference as suggested by qualitative research?
- “Sentiments” and emotional factors of luxury purchase
- “Leaving unused” luxury products need more usage occasions
- What does this mean for brands?
- The needs for differentiation and expanding usage occasions
- Case study: Rimowa Unique suitcase customisation
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- Figure 27: Rimowa suitcase customisation service, 2020
- Case study: wandering in Disneyland wearing Gucci “Mickey Mouse capsule” collection
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- Figure 28: KOLs wandering in Disneyland wearing “Mickey Mouse capsule” collection, 2020
Brand perceptions and selections: Promoting brand image through cultural characteristics
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- What differences does the quantitative data reveal?
- Acknowledgement of quality and taste of domestic athleisure brands
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- Figure 29: Brand selection of athleisure products, by city tier, December 2019
- Premium domestic brands win out regarding cultural characteristics and functionality
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- Figure 30: Impression comparison between premium domestic brands and foreign brands, December 2019
- Why the difference as suggested by qualitative research?
- The quality of daily leisure products is most valued
- Employ local cultural elements to improve product quality
- What does this mean for brands?
- Employ local cultural elements to improve product quality
- Case study: OPPO smart TV puts “Colour China” into the film
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- Figure 31: OPPO “Colour China” commercial, 2020
- Case study: the time-honoured brand Marie’s interprets Chinese New Year blessings in colours
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- Figure 32: “100 Years of Marie, First time out” pop up event, 2020
Focuses in leisure spending: a combination of online content and offline shopping
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- What difference does quantitative data suggest?
- Participate in arts and crafts activities and experience diverse culture
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- Figure 33: Main participation reasons, by city tier, October 2019
- Get inspired by traditional culture and showcase aesthetics
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- Figure 34: Attitudes towards arts and crafts activities, by city tier, September 2019
- Why the difference as suggested by qualitative research?
- Consumers like to participate in traditional cultural activities
- Virtual experiences integrating content and shopping hold great potential
- What does this mean for brands?
- A combination of online content and offline shopping
- Case study: Tmall Xinwenchuang integrates cultural symbols with “Chinese Gifts”
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- Figure 35: “Chinese Gifts” by Tmall Xinwenchuang, 2020
- Case study: Minsheng Bank introduces an intangible cultural heritage-themed credit card
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- Figure 36: “Protect it and pass it on” by Minsheng Bank credit card, 2020
Appendix –Abbreviations
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- Abbreviations
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