Table of Contents
Overview
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- What you need to know
- Covered in this report
- Demographic classification
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- Figure 1: Definition of low/mid/high MHI groups, by city tier
Executive Summary
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- China today
- Spending overview
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- Figure 2: Consumer expenditure by sector, 2017
- Figure 3: CAGR in consumer expenditure, by sector, 2017-22
- The consumer
- Eating well becomes a spending priority again in tier one to three
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- Figure 4: Claimed change in consumer spending, by sector, January 2018
- Family and health still the centre of people’s lives
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- Figure 5: Most important things in life, January 2018
- More confidence in food safety and pollution, but not in work stress and privacy
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- Figure 6: Most concerned things, 2013 vs 2018
- Being an aspirational brand is no longer about price and exclusivity
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- Figure 7: Attributes associated with an aspirational brand, January 2018
- Short-term gimmicks cannot fulfil the long term job
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- Figure 8: Attitudes towards different marketing activities, January 2018
- Middle class values but not middle class labels
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- Figure 9: General attitudes towards lifestyles and values, January 2018
- What we think
China Today – The Economy
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- 2017’s good growth gives a stable outlook for 2018
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- Figure 10: China’s GDP and growth, 2013-17
- CPI shows signs of climbing, but largely driven by Chinese New Year
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- Figure 11: Consumer Price Index, China January 2015-Febuary 2018
- Home price increases eased in 2017
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- Figure 12: Average price of residential properties and growth rate, China, 2013-17
- Employment stimulated by entrepreneurship and innovation
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- Figure 13: Unemployment rate, China 2013-17
China Today – The People
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- Nearly 1.4 billion population
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- Figure 14: China population, by urban and rural, 2013-22
- 2017: declined birth rate, second-birth exceeded first-birth for the first time
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- Figure 15: New births in China, by first birth and non-first birth, 2013-17
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- Figure 16: Young parents’ willingness to have a second child, 2016-18
- An aging population brings challenges and possibilities
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- Figure 17: China population structure, by age 2013-22
- Over 600 million post-70s, post-80s and post-90s in total
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- Figure 18: China population of post-1950s to post-2000s in 2017
- Income growth drives spending confidence
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- Figure 19: Annual per capita disposable income and growth, China 2013-17
Expenditure Overview
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- Total consumer expenditure grew by 11.6% in 2017
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- Figure 20: Total consumer expenditure in China, 2012-17
- Figure 21: Claimed change in consumer spending, averaged across sectors, 2017-18
- The big stories have not changed much in 2017
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- Figure 22: Consumer expenditure by sector, 2017
- Eating well becomes more important in tier one to three cities
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- Figure 23: Claimed change in consumer spending, by sector, January 2018
- The five-year outlook
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- Figure 24: Total consumer expenditure in China, 2012-22
- Winners in the next five years: going out and about
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- Figure 25: CAGR in consumer expenditure, by sector, 2017-22
In-home Food
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- What we think
- A better treat to the stomach and palate
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- Figure 26: Consumer expenditure in in-home food, 2012-17
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 27: Best- and worst-case forecast for consumer expenditure in in-home food, at current prices, 2012-22
- Key consumer findings
- A significant increase of people spending more in the past year
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- Figure 28: Claimed spending changes in in-home food, 2016-18
- Who are spending more?
- Analyst’s pick of 2017 insights
Food Service (Eating Out and Takeaway)
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- What we think
- Busier and fun-seeking lifestyle drive expenditure on foodservice
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- Figure 29: Consumer expenditure in foodservice, 2012-17
- Who’s winning?
- Specialty restaurants with a focused menu
- Light meals and salads
- Who’s struggling?
- Coffee houses
- The five-year outlook
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- Figure 30: Best- and worst-case forecast for consumer expenditure in foodservice, at current prices, 2012-22
- Key consumer findings
- People are spending more on eating out, especially young consumers
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- Figure 31: Claimed spending changes in eating out, 2016-18
- Who are spending more?
- Analyst’s pick of 2017 insights
- Restaurant as ‘the third place’
- Consumers are getting explorative with cuisine types
- Organic claim resonates with consumers best
Non-alcoholic Drinks
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- What we think
- Desire for natural hydration and light indulgence drives upgrading
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- Figure 32: Consumer expenditure in non-alcoholic drinks, 2012-17
- Who’s wining?
- Who’s struggling?
- The five-year outlook
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- Figure 33: Best- and worst-case forecast for consumer expenditure in non-alcoholic drinks, at current prices, 2012-22
- Key consumer findings
- More consumers tend to maintain current spending level
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- Figure 34: Claimed spending changes in non-alcoholic drinks, 2016-18
- Who are spending more?
- Analyst’s pick of 2017 insights
Alcoholic Drinks – In Home and Out of Home
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- What we think
- Trading up from quantity to quality
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- Figure 35: Consumer expenditure in alcoholic drinks (out of home), 2012-17
- Figure 36: Consumer expenditure in alcoholic drinks (in home), 2012-17
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 37: Best- and worst-case forecast for consumer expenditure in alcoholic drinks (out of home), at current prices, 2012-22
- Figure 38: Best- and worst-case forecast for consumer expenditure in alcoholic drinks (in home), at current prices, 2012-22
- Key consumer findings
- Signs that consumers starting to find the right balance
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- Figure 39: Claimed spending changes in alcoholic drinks, 2016-18
- Who are spending more?
- Analyst’s pick of 2017 insights
Beauty and Personal Care
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- What we think
- Continuous steady growth driven by elaborative care
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- Figure 40: Consumer expenditure in beauty and personal care, 2012-17
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 41: Best- and worst-case forecast for consumer expenditure in beauty and personal care, at current prices, 2012-22
- Key consumer findings
- Demands energise more spending
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- Figure 42: Claimed spending changes in beauty products and toiletries, 2016-18
- Who are spending more?
- Analyst’s pick of 2017 insights
OTC and Pharmaceuticals
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- What we think
- Convenience and standardization maintain steady growth
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- Figure 43: Consumer expenditure in OTC and pharmaceuticals, 2012-17
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 44: Best- and worst-case forecast for consumer expenditure in OTC and pharmaceuticals, at current prices, 2012-22
- Key consumer findings
- Fear of illness drives consumers to spend money beforehand for prevention
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- Figure 45: Claimed spending changes in healthcare and pharmaceutical products, 2016-18
- Who are spending more?
- Analyst’s pick of 2017 insights
Clothing and Accessories
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- What we think
- The fashion industry shifts from imitation to innovation
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- Figure 46: Consumer expenditure in clothing and accessories, 2012-17
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 47: Best- and worst-case forecast for consumer expenditure in clothing and accessories, at current prices, 2012-22
- Key consumer findings
- Increasing enthusiasm for fashion consumption
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- Figure 48: Claimed spending changes in clothing and accessories, 2016-18
- Who are spending more?
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- Figure 49: Claimed spending changes in clothing and accessories, by gender, 2017-18
- Analyst’s pick of 2017 insights
Technology and Communication
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- What we think
- Spending on smartphones and mobile internet contribute to steady growth
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- Figure 50: Consumer expenditure in technology and communication, 2012-17
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 51: Best- and worst-case forecast for consumer expenditure in technology and communication, at current prices, 2012-22
- Key consumer findings
- Intention on spending maintains
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- Figure 52: Claimed spending changes in technology and communications, 2016-18
- Who are spending more?
- Analyst’s pick of 2017 insights
Household Care
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- What we think
- Household care saw a slight pick-up in growth
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- Figure 53: Consumer expenditure in household care, 2012-17
- Who’s winning?
- Facial tissue replaced toilet paper as the biggest segment of household paper
- Household care brands take on a lifestyle-oriented image
- Who’s struggling?
- Fabric softeners failed to become a laundry room essential
- The five-year outlook
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- Figure 54: Best- and worst-case forecast for consumer expenditure in household care, at current prices, 2012-22
- Key consumer findings
- Household care being an unwavering category
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- Figure 55: Claimed spending changes in household care, 2016-18
- Who are spending more?
- Analyst’s pick of 2017 insights
- Practical and function-driven Chinese household care shoppers
- Positive attitudes towards housework
- Anti-bacterial sought after across different household care categories
Home
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- What we think
- Sluggish housing market dragged down growth in 2017
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- Figure 56: Consumer expenditure in home, 2012-17
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 57: Best- and worst-case forecast for consumer expenditure in home, at current prices, 2012-22
- Key consumer findings
- Not a high priority sector but will keep current growth momentum
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- Figure 58: Claimed spending changes in-home, 2016-18
- Who are spending more?
- Analyst’s pick of 2017 insights
Transportation
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- What we think
- Transport is still one of the fastest growing sectors
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- Figure 59: Consumer expenditure in transport, 2012-17
- On the edge of revolution
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- Figure 60: Best- and worst-case forecast for transport expenditure, at current prices, 2012-22
- Who’s winning?
- Who’s struggling?
- Key consumer findings
- 41% of surveyed consumers plan to spend more
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- Figure 61: Claimed spending changes in transport, 2018
- Driven by young people living in tier two and three cities
- Analyst’s pick of 2017 insights
Leisure and Entertainment
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- What we think
- Growth driven by rising pressure at work and serious pursuit of fun
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- Figure 62: Consumer expenditure in leisure and entertainment, 2012-17
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 63: Best- and worst-case forecast for consumer expenditure in leisure and entertainment, at current prices, 2012-22
- Key consumer findings
- Leisure spending intentions get stronger
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- Figure 64: Claimed spending changes in leisure and entertainment, 2016-18
- Who are spending more?
- Analyst’s pick of 2017 insights
Holidays
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- What we think
- Strong growth maintains
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- Figure 65: Consumer expenditure in holidays, 2012-17
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 66: Best- and worst-case forecast for consumer expenditure in holidays, at current prices, 2012-22
- Key consumer findings
- Maintain a high level of willingness of spending
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- Figure 67: Claimed spending changes in holidays, 2016-18
- Who is spending more?
- Analyst’s pick of 2017 insights
Personal Finance and Housing
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- What we think
- A slight decrease in growth rate
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- Figure 68: Consumer expenditure in personal finance and housing, 2012-17
- A long term expanding market
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- Figure 69: Best- and worst-case forecast for personal finance and housing expenditure, at current prices, 2012-22
- Who’s winning?
- Who’s struggling?
- Key consumer findings
- Analyst’s pick of 2017 insights
Miscellaneous
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- What we think
- High growth driven by education and medical services
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- Figure 70: Consumer expenditure in miscellaneous, 2012-17
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 71: Best- and worst-case forecast for consumer expenditure in miscellaneous, at current prices, 2012-22
- Analyst’s pick of 2017 insights
The Consumer – What You Need to Know
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- Family and health remain life priorities
- Luxury and exclusivity are no longer definitions of as aspirational brand
- Smart services and customised solutions are best at winning consumer hearts
- The Western-originated Middle class label does not work in China
Priorities in Life
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- Family and health are still by far the most important
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- Figure 72: Most important things in life, January 2018
- The growing importance of personal feelings: making money but also doing a job one enjoys
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- Figure 73: % of mentions what’s most important, money and career-related, 2013 vs 2018
- Figure 74: Selected mentions of most important things in life, by generation, January 2018
Concerns in Life
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- Health threats remain the biggest worries…
- …but there is more confidence in dealing with food safety and pollution
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- Figure 75: Most concerning things, 2013 vs 2018
- Concern over privacy doubled in five years’ time
- One in ten feel disheartened by the loss of Chinese culture
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- Figure 76: Most concerned things, January 2018
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- Figure 77: Pechoin’s cushion BB cream in collaboration with the Palace Museum, China, 2017
What Makes a Brand Aspirational
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- Being luxurious and difficult to buy are the least important
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- Figure 78: Attributes associated with an aspirational brand, January 2018
- Value for money is important, but not enough
- Staying true to the brand is the best strategy
- Big differences by age generations
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- Figure 79: Selected attributes associated with an aspirational brand, by age generation, January 2018
Attitudes towards Marketing Activities
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- Short-term buzz generators cannot do the long term job
- Smart services and customised solutions are most wanted
- Though not new, lifestyle-positioning is still winning favour
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- Figure 80: Attitudes towards different marketing activities, January 2018
- Post-80s and post-90s defy some assumptions
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- Figure 81: Attitudes towards selected marketing activities, % mention on have favourable attitudes towards the brand, by age generation, January 2018
- Men and women attracted by different types of spokespersons
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- Figure 82: Attitudes towards selected marketing activities, % mention on have favourable attitudes towards the brand, by age and gender, January 2018
Lifestyles and Values
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- Two thirds of consumers say they are happy with life now
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- Figure 83: General attitudes towards lifestyles and values, January 2018
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- Figure 84: Selected most concerned things, by consumer segment, January 2018
- Middle class label does not help brands connect with their audience
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- Figure 85: General attitudes towards lifestyles and values, % of any agree, by consumer segment, January 2018
- Post-80s want to show off their lifestyle the most
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- Figure 86: General attitudes towards lifestyles and values, % of any agree, by age generation, January 2018
Meet the Mintropolitans
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- Who are they now?
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- Figure 87: Definitions of Mintropolitans by Mintel, 2015-18
- Figure 88: Incidence of Mintropolitans by city, January 2018
- Where do they spend more?
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- Figure 89: Gap in sectors that have spent more in the last 12 months between MinTs and Non-MinTs (as benchmark), January 2018
- Priorities and concerns
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- Figure 90: Gap in life priorities and most concerned things between MinTs and Non-MinTs (as benchmark), January 2018
- What’s aspirational and how to connect them?
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- Figure 91: Gap in attributes that make a brand aspirational between MinTs and Non-MinTs (as benchmark), January 2018
- About half of MinTs want to let others know about their lifestyle
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- Figure 92: Agreement on ‘I like letting others know what brands I am using’, by consumer classification, January 2018
- Less showy MinTs are more resentful towards impetuous marketing activities
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- Figure 93: Attitudes towards selected marketing activities, by consumer segment, January 2018
Appendix – Consumer Expenditure Forecast
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- Figure 94: Consumer expenditure by sector, 2017-22
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Appendix – Methodology and Abbreviations
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- Methodology
- Fan chart forecast
- Abbreviations
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