Table of Contents
Overview
-
- What you need to know
- Covered in this Report
- Demographic classification
-
- Figure 1: Definition of low/mid/high MHI groups, by city tier
Executive Summary
-
- China today
- The economy
- The people
- The expenditure
-
- Figure 2: Changes in spending, average across sectors, 2017 vs 2016
-
- Figure 3: Consumer expenditure and growth rate, by sectors, 2016
- Figure 4: Changes in spending, January 2017
-
- Figure 5: Best- and worst-case forecast total consumer expenditure, 2011-21
- The Consumer
- Life pursuits: a healthy lifestyle focusing on diet and holiday experience
-
- Figure 6: Life priorities – percentage of consumers claiming “will definitely do”, 2017 vs 2014
-
- Figure 7: Ways of spending for improving living quality, word cloud, January 2017
- Good value takes into account price, quality, function and endurance
-
- Figure 8: Definition for “good value for money”, word cloud, January 2017
- Consumers need better proof of product quality
-
- Figure 9: Definition of a high-quality product, 2017 vs 2014
- Brand and technology play bigger roles in the trading up process
-
- Figure 10: Features that are worth paying more for, 2017 vs 2013
- What we think
China Today – The Economy
-
- A consumption-driven economy
-
- Figure 11: Annual GDP and growth rate, 2012-16
- Figure 12: GDP contributions, by industrial sector, 2012-16
- Online retailing continues to boom
-
- Figure 13: Retail sales of consumer goods, by online and offline channels, 2015 and 2016
- Overseas shopping reaches a remarkable size
-
- Figure 14: Total B2C cross-border online retail value and growth rate, 2012-16
China Today – The People
-
- Relaxation of one-child policy drives immediately address workforce issues
-
- Figure 15: Total China population and growth rate, 2012-16
- Shrinking workforce pushes businesses to look for other ways to improve productivity
-
- Figure 16: China population structure, by age, 2012-20
- Many over-55s continue to work after retirement
- Slower income growth makes financial management more important
-
- Figure 17: Annual disposable income and growth rate, 2012-16
Expenditure Overview
-
- Total Chinese consumer expenditures grew by 10.5% in 2016
-
- Figure 18: Consumer expenditure, by sector, 2016
- Increasing spending as investment for future
- Increasing spending for health and experience
-
- Figure 19: Consumer expenditure and growth rate, by sector, 2016
- Increasing spending but more prudently
-
- Figure 20: Changes in spending, average across sectors, 2017 vs 2016
- Holidays take over clothing as the spending priority in tier one to three cities
-
- Figure 21: Changes in spending, January 2017
- Outlook for 2021
-
- Figure 22: Best- and worst-case forecast total consumer expenditure, 2011-21
- Winning sectors in the next five years
- Transportation, Holidays and Leisure experience
- OTC and pharmaceuticals, in-home food and foodservice
-
- Figure 23: CAGR in consumer expenditure, by sector, 2016-21
In-Home Food
-
- What you need to know
- What we think
- Stable growth in the deepening economic slowdown
-
- Figure 24: Consumer expenditure in in-home food, 2011-16
- Better-for-you options with proof of high quality driving further growth
-
- Figure 25: Best- and worst-case forecast for in-home food expenditure, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
-
- Figure 26: Spending habit change in in-home food, 2016 vs 2017
- Having an “imported” label does not guarantee sales
Foodservice (Eating Out and Takeaways)
-
- What you need to know
- What we think
- Continuous development of food delivery system and demand for experiential consumption drive expenditure on foodservice
-
- Figure 27: Consumer foodservice expenditure in China, 2011-16
- Favourable policies and foodservice operators’ going healthy drive future growth
-
- Figure 28: Best- and worst-case forecast for foodservice expenditure, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
- People are spending more on foodservice, especially young females
-
- Figure 29: Spending habit change in foodservice, 2016 vs 2017
- Restaurants with a clear focus stand out as most popular
- Good in-store ambience is critical in deciding a dining venue
- A healthy diet: balanced nutrition and fresh ingredients are most valued, while awareness of superfoods remains low
Non-Alcoholic Drinks
-
- What you need to know
- What we think
- Premiumisation as more real and specific
-
- Figure 30: Consumer non-alcoholic drinks expenditure in China, 2011-16
- Light and functional beverages will continue to be winners
-
- Figure 31: Best- and worst-case forecast for non-alcoholic drinks, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
- Spending habit stays the same as last year
-
- Figure 32: Spending habit change in non-alcoholic drinks, 2016 vs 2017
- Consumers are more cautious with the sweetener
- Extra health benefits are highly valued
Alcoholic Drinks – In Home and Out of Home
-
- Key points
- What we think
- Recovering since 2015
- Imported products drive in-home alcoholic drinks spending
-
- Figure 33: Consumer expenditure on alcoholic drinks in home, 2011-16
- Wine and beer help drive on-trade expenditure
-
- Figure 34: Consumer expenditure on alcoholic drinks out of home, 2011-16
- Future growth drivers: desire for high-quality products and a trendy lifestyle
- In-home
-
- Figure 35: Best- and worst-case forecast of expenditure of alcoholic drinks in home, at current prices, 2011-21
- Out of home
-
- Figure 36: Best- and worst-case forecast value sales of the alcoholic drinks out of home, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
- Cutting spending on alcoholic drinks
-
- Figure 37: Spending habit change in alcoholic drinks, 2016 vs 2017
- Western spirits need to find a way to grow
- Online plays a big role in selling and marketing alcoholic drinks
Beauty and Personal Care
-
- What you need to know
- What we think
- Small segments boom while daily products rely on premiumisation
-
- Figure 38: Consumer expenditure in beauty and personal care, 2011-16
- Segmented functional benefits lead future trend
-
- Figure 39: Best- and worst-case forecast for beauty and personal care expenditure, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
- Mixed reasons behind higher expenditure
-
- Figure 40: Spending habit change in beauty products and toiletries, 2016 vs 2017
- Marketing the importance of self-rewarding and pampering
- Sophisticated consumers raise the standard of quality
OTC and Pharmaceuticals
-
- What you need to know
- What we think
- Ageing society and pursuit of healthier life drive expenditure
-
- Figure 41: Consumer expenditure in OTC and pharmaceuticals, 2011-16
- Changing purchase habit: from hospital to pharmacies or clinics
-
- Figure 42: Best- and worst-case forecast for OTC and pharmaceuticals expenditure, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
- Not only seniors spend more on health
-
- Figure 43: Spending habit change in healthcare and pharmaceutical products, 2016 vs 2017
-
- Figure 44: Spending habit change in healthcare and pharmaceutical products, by age, December 2016
- Illness prevention is foundation of better living quality
- More resources to cultivate rational consumers
Clothing and Accessories
-
- What you need to know
- What we think
- Personalisation, diversification and demand for higher quality drive clothing and accessory expenditure
-
- Figure 45: Consumer expenditure in clothing and accessories, 2011-16
- Trading up and individualisation to drive future growth
-
- Figure 46: Best- and worst-case forecast for clothing and accessories expenditure, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
- Clothing and accessory spending remains robust
-
- Figure 47: Spending habit change in clothing and accessories, 2016 vs 2017
- Need, function and value outweigh cheap price
- Consumers want contemporary, individualistic yet classic clothing
Technology and Communication
-
- What you need to know
- What we think
- Growth dragged down by a saturated mobile phone market
-
- Figure 48: Consumer expenditure in technology and communications, 2011-16
- Moderate growth over the next five years
-
- Figure 49: Best- and worst-case forecast for technology and communication expenditure, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
- The potential of female consumers should not be overlooked
- Lack of breakthrough innovations to drive spending amongst Mintropolitans
-
- Figure 50: Spending habit change in technology and communications, 2016 vs 2017
- Technology products ranked as the top spending to improve quality of life
- Non-Mintropolitans show higher potential to upgrade smartphones
- Product quality is key to fostering favourability towards technology brands
- Family-related features, a market opportunity for wearable devices
Household Care
-
- What you need to know
- What we think
- Household care expenditure increases slowly
-
- Figure 51: Consumer expenditure in household care, 2011-16
- Future opportunities: adapting to the evolving lifestyles
-
- Figure 52: Best- and worst-case forecast for household care expenditure, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
- 25-29-year-old women and tier two and three cities are growth drivers
-
- Figure 53: Spending habit change in household care, 2016 vs 2017
- Gentle cleaning, more frequently is the trend
- Greater demand for products that cater to emotional wellbeing
Home
-
- What you need to know
- What we think
- Urbanisation and pursuit of quality living drive home expenditure
-
- Figure 54: Consumer expenditure in home, 2011-16
- Future needs: a natural, clean and smart home
-
- Figure 55: Best- and worst-case forecast for home expenditure, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
- Home spending remains stable
-
- Figure 56: Spending habit change in home, 2016 vs 2017
- Buying home appliances is amongst the key indicators of better living quality
- High earners and families with kids tend to own more niche smart home devices
Transport
-
- What you need to know
- What we think
- Consumer expenditure on transport close to RMB 2 trillion
-
- Figure 57: Transport expenditure in China, 2011-16
- Newcomers seeking chances to reshape the industry
-
- Figure 58: Best- and worst-case forecast for transport expenditure, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
- The bigger, the better
- Making more confident decisions
- Car buyers refuse to sacrifice experience for budget
- Experienced maintainers are leaving 4S stores
Leisure and Entertainment
-
- What you need to know
- What we think
- Thriving steadily due to the pursuit of experimental activities
-
- Figure 59: Consumer expenditure in leisure and entertainment, 2011-16
- Fitness drives future growth
-
- Figure 60: Best- and worst-case forecast for leisure and entertainment expenditure, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
- The leisure and entertainment sector will continue seeing healthy growth
-
- Figure 61: Spending habit change in leisure and entertainment, 2016 vs 2017
- Going to gym is likely to become part of daily routine
- Higher standard for online games: an excellent viewing and listening experience and an exciting storyline
- A particular penchant for family-focused recreations
- Parents are more interested in VR technology
Holiday
-
- What you need to know
- What we think
- Steadily growing but requiring higher level of differentiation
-
- Figure 62: Consumer expenditure in holiday, 2011-16
- Short-haul travels drive future growth
-
- Figure 63: Best- and worst-case forecast for holiday expenditure, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
- 30-39s and females aged 25-29 are enthusiastic holiday spenders
-
- Figure 64: Spending habit change in holiday, 2016 vs 2017
- Cruise travel is getting popular because it is fun, safe and value for money
- Enjoying natural scenery is more appealing than shopping
- Relationship enhancement is an attractive marketing claim
- Focusing on providing “local” tastes
Personal Finance and Housing
-
- What you need to know
- What we think
- The fastest-growing sector in 2016
-
- Figure 65: Personal finance and housing expenditure in China, 2011-16
- Evolving to fulfil consumers' growing financial services demand
-
- Figure 66: Best- and worst-case forecast for personal finance and housing expenditure, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
- Convenience is key, discount is a trigger in payment preferences
- Females taking more wealth management responsibilities
- Consumer experience means more than good customer service attitude
Miscellaneous
-
- What you need to know
- What we think
- Growth in many sectors had slowed due to market maturity
-
- Figure 67: Consumer expenditure in miscellaneous, 2011-16
- Future demand for higher quality will buoy category spending
-
- Figure 68: Best- and worst-case forecast for miscellaneous, at current prices, 2011-21
- Winners for 2017
- Losers for 2017
- Key consumer findings
- Adapting to China’s “New Normal”
- China’s consumers becoming more pet-friendly
The Consumer – What You Need to Know
-
- Holiday experience becomes a key life pursuit
- Spending priorities associated with what brings higher living quality
- Value is determined by price, quality, function and endurance
- Facts speak louder than brand when judging the “quality”
- Higher willingness to pay premium for well-known brands and technology
Life Pursuits
-
- Healthy lifestyle remains as the top priority
-
- Figure 69: Goals for next year (2017), January 2017
- The time to market new holiday destinations
-
- Figure 70: Goals for next year – percentage of consumers claiming “will definitely do”, 2017 vs 2014
- Striving for a balance between finance and personal life
-
- Figure 71: Percentage of consumers claiming “will definitely get my household finances in order”, by age, 2017 vs 2014
- More people want to give back to society
-
- Figure 72: Goals for next year – percentage of consumers claiming “will definitely do”, by age, January 2017
- Young generation pays most attention to appearance
- Females are more ambitious
-
- Figure 73: Goals for next year – percentage of consumers claiming “will definitely do”, by gender, January 2017
What Drives Life Quality?
-
- Products vs experiences
-
- Figure 74: Ways of spending for improving living quality, top 10 items mentioned, January 2017
- Travelling: most commonly acknowledged way of improving living quality
-
- Figure 75: Ways of spending for improving living quality, word cloud, January 2017
- Demographic highlights
- Progressing through beauty, technology, fashion and holidays as people age
-
- Figure 76: Selected ways of spending for improving living quality, by age, January 2017
Definition for “Good Value for Money”
-
- No more about just a low price
-
- Figure 77: Definition for “good value for money”, word cloud, January 2017
- Various ways of assessing the price
-
- Figure 78: Definition for “good value for money” (Open-ended), January 2017
- Demographic highlights
- Males value durability
- Young people value good product appearance
What Does a “High-Quality Product” Mean?
-
- Objective facts speak louder than the brand
-
- Figure 79: Definition of high-quality product, 2017 vs 2014
- Overseas origin further declines in significance
- Men and women make decisions differently
- Older consumers read facts; younger ones buy in endorsements
-
- Figure 80: Definition of high-quality product, by age, Jan 2017
What are Worth Paying More for?
-
- Biggest increase in willingness to pay for cutting-edge technology
-
- Figure 81: Features that are worth paying more for, 2017 vs 2013
- “Well-known brand” has an evolving role
-
- Figure 82: Definition for high-quality product, by consumers who think it’s worth paying more for well-known brands vs those who do not, January 2017
Meet the Mintropolitans
-
- Upgrading through experiences
-
- Figure 83: Selected ways of spending for improving living quality, by consumer segmentation, Jan 2017
- More detail-oriented in product quality assessment
-
- Figure 84: Selected features that are associated with the definition for high-quality product, by consumer segmentation, Jan 2017
- Trading up for brand, technology and individuality
-
- Figure 85: Selected features that are worth paying more for, by consumer segmentation, Jan 2017
Appendix – Consumer Expenditure
-
-
- Figure 86: Consumer expenditure, by sector, 2011-21
-
Appendix – Methodology and Abbreviations
-
- Methodology
- Fan chart forecast
- Abbreviations
Back to top