Table of Contents
Executive Summary
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- China today
- Spending overview
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- Figure 1: Consumer expenditure and growth rate, by sector, China, 2018
- The consumer
- All sectors seeing trading up albeit for different reasons
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- Figure 2: Changes in spending, January 2019
- Self-care matters
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- Figure 3: Lifestyle challenges, January 2019
- Hierarchy of brand influence
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- Figure 4: Impact of brand in purchasing, January 2019
- What we think
China Today – The economy
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- 6.6% growth is still over USD1 trillion
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- Figure 5: GPD and growth rate, China, 2014-18
- 6.0%-6.5% target growth for 2019, quality over quantity
- CPI more under control towards later part of the year
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- Figure 6: Consumer Price Index, China, 2016-18
- Employees reduce in number and keep moving to urban areas
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- Figure 7: Employment personnel, by urban and rural, China, 2014-18
China Today – The people
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- 1.4 billion people, growing at 0.4% a year
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- Figure 8: Total population and growth rate, China, 2014-18
- 15 million new births in 2018, down by 2 million vs 2017
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- Figure 9: New births and birth rate, China, 2014-18
- Ageing population
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- Figure 10: Population structure, by age, China, 2014-18
- Urbanisation now at 60%
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- Figure 11: Population, by urban and rural, China, 2014-18
- Income growth continues to be the backbone of confidence
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- Figure 12: Per capita disposable income, China, 2014-18
- Figure 13: Confidence in improving financial status in the next 12 months, China, 2017-19
China Today – Expenditure overview
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- An obvious slowdown in growth
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- Figure 14: Total consumer expenditure, China, 2014-18
- Spending priorities remain the same in 2018, but motivations vary
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- Figure 15: Consumer expenditure by sector, 2018
- The five-year outlook
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- Figure 16: Total consumer expenditure, China, 2013-23
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- Figure 17: CAGR in consumer expenditure, by sector, 2018-23
Sector Review – In-home food
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- What we think
- Pursuing better-for-you and convenient diets
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- Figure 18: Consumer expenditure on in-home food, 2013-18
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 19: Best- and worst-case forecast of consumer expenditure on in-home food, at current prices, 2013-23
- Key consumer findings
- Spending intention on in-home food maintained
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- Figure 20: Claimed spending changes in in-home food, 2017-19
- Who is spending more?
- Analyst’s pick of 2018 insights
Sector Review – Foodservice (eating out and takeaways)
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- What we think
- Development of food delivery service slows market growth
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- Figure 21: Consumer expenditure on foodservice, 2013-18
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 22: Best- and worst-case forecast of consumer expenditure on foodservice, at current prices, 2013-23
- Key consumer findings
- Importance ranking drops
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- Figure 23: Claimed spending changes in eating out, 2017-19
- Who is spending more?
- Analyst’s pick of 2018 insights
Sector Review – Non-alcoholic drinks
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- What we think
- Innovation drives stable growth
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- Figure 24: Consumer expenditure on non-alcoholic drinks, 2013-18
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 25: Best- and worst-case forecast of consumer expenditure on non-alcoholic drinks, at current prices, 2013-23
- Key consumer findings
- More exciting innovation needed to drive more consumption
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- Figure 26: Claimed spending changes in non-alcoholic drinks, 2017-19
- Who is spending more?
- Analyst’s pick of 2018 insights
Sector Review – Alcoholic drinks – in-home and out-of-home
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- What we think
- In-home consumption grows faster than out-of-home
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- Figure 27: Consumer expenditure on alcoholic drinks (out of home), 2013-18
- Figure 28: Consumer expenditure on alcoholic drinks (in home), 2013-18
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 29: Best- and worst-case forecast of consumer expenditure on alcoholic drinks (out of home), at current prices, 2013-23
- Figure 30: Best- and worst-case forecast of consumer expenditure on alcoholic drinks (in home), at current prices, 2013-23
- Key consumer findings
- Signs that consumers are starting to find the right balance
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- Figure 31: Claimed spending changes in alcoholic drinks, 2017-19
- Who is spending more?
- Analyst’s pick of 2018 insights
Sector Review – Beauty and personal care
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- What we think
- Strong NPD, robust growth
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- Figure 32: Consumer expenditure on beauty and personal care, 2013-18
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 33: Best- and worst-case forecast of consumer expenditure on beauty and personal care, at current prices, 2013-23
- Key consumer findings
- Willingness to increase spending gets stronger
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- Figure 34: Claimed spending changes in beauty products and toiletries, 2017-19
- Who is spending more?
- Analyst’s pick of 2018 insights
Sector Review – OTC and pharmaceuticals
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- What we think
- Stable growth seen in 2017 maintained in 2018
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- Figure 35: Consumer expenditure on OTC and pharmaceuticals, 2013-18
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 36: Best- and worst-case forecast of consumer expenditure on OTC and pharmaceuticals, at current prices, 2013-23
- Key consumer findings
- Stable spending compared to 2018
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- Figure 37: Claimed spending changes in healthcare and pharmaceutical products, 2017-19
- Who is spending more?
- Analyst’s pick of 2018 insights
Sector Review – Clothing and accessories
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- What we think
- A slight decrease in the growth rate
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- Figure 38: Consumer expenditure on clothing and accessories, 2013-18
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 39: Best- and worst-case forecast of consumer expenditure on clothing and accessories, at current prices, 2013-23
- Key consumer findings
- Growing investment in one’s appearance and pampering oneself
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- Figure 40: Claimed spending changes in clothing and accessories, 2017-19
- Who is spending more?
- Analyst’s pick of 2018 insights
Sector Review – Technology and communication
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- What we think
- Breakthrough innovation needed for growth
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- Figure 41: Consumer expenditure on technology and communication, 2013-18
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 42: Best- and worst-case forecast of consumer expenditure on technology and communication, at current prices, 2013-23
- Key consumer findings
- Similar level of spending to previous year
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- Figure 43: Claimed spending changes in technology and communication, 2017-19
- Who is spending more?
- Analyst’s pick of 2018 insights
Sector Review – Household care
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- What we think
- Growth maintained at a moderate level as market matures
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- Figure 44: Consumer expenditure on household care, 2013-18
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 45: Best- and worst-case forecast of consumer expenditure on household care, at current prices, 2013-23
- Key consumer findings
- No significant change compared to the previous year
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- Figure 46: Claimed spending changes in household care products, 2017-19
- Who is spending more?
- Analyst’s pick of 2018 insights
Sector Review – Home
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- What we think
- Home market plunges as a result of property market depression
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- Figure 47: Consumer expenditure on home, 2013-18
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 48: Best- and worst-case forecast of consumer expenditure on home at current prices, 2013-23
- Key consumer findings
- Growing enthusiasm year on year
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- Figure 49: Claimed spending changes in home, 2017-19
- Who is spending more?
- Analyst’s pick of 2018 insights
Sector Review – Transportation
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- What we think
- Double-digit growth continues despite market slow down
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- Figure 50: Consumer expenditure on transport, 2013-18
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 51: Best- and worst-case forecast of consumer expenditure on transport, at current prices, 2013-23
- Key consumer findings
- 39% of respondents have spent more
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- Figure 52: Claimed spending changes in transport, 2018-19
- Who is spending more?
- Analyst’s pick of 2018 insights
Sector Review – Leisure and entertainment
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- What we think
- More leisure spending to boost emotional wellbeing
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- Figure 53: Consumer expenditure on leisure and entertainment, 2013-18
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 54: Best- and worst-case forecast of consumer expenditure on leisure and entertainment, at current prices, 2013-23
- Key consumer findings
- A high priority when people want to treat themselves
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- Figure 55: Claimed spending changes in leisure and entertainment, 2017-19
- Who is spending more?
- Analyst’s pick of 2018 insights
Sector Review – Holidays
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- What we think
- Growth rate leader across all sectors in 2018
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- Figure 56: Consumer expenditure on holidays, 2013-18
- Who is winning?
- Who is struggling?
- The five-year outlook
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- Figure 57: Best- and worst-case forecast of consumer expenditure on holidays, at current prices, 2013-23
- Key consumer findings
- Spending willingness growing even stronger
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- Figure 58: Claimed spending changes in holidays, 2017-19
- Who is spending more?
- Analyst’s pick of 2018 insights
Sector Review – Personal finance & housing
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- What we think
- Growth slowing for multiple reasons
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- Figure 59: Consumer expenditure on personal finance & housing, 2013-18
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 60: Best- and worst-case forecast of consumer expenditure on personal finance & housing, at current prices, 2013-23
- Analyst’s pick of 2018 insights
Sector Review – Miscellaneous
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- What we think
- Sustained growth fuelled by education, medical care and home services
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- Figure 61: Consumer expenditure on miscellaneous, 2013-18
- Who’s winning?
- Who’s struggling?
- The five-year outlook
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- Figure 62: Best- and worst-case forecast of consumer expenditure on miscellaneous, at current prices, 2013-23
- Analyst’s pick of 2018 insights
The Consumer – What You Need to Know
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- People continued to spend more in most categories over the past 12 months
- Indulgence fuels trading up in entertainment
- Growing health awareness cuts spending in certain categories
- Personal investments should not be sacrificed for family
- Brands mainly used to evaluate product quality
- Value-driven not price-driven
Changes in Spending
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- Consumers trading up not down
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- Figure 63: Changes in spending, January 2019
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- Figure 64: Changes in spending – Spending more, 2018 vs 2019
Reasons for Spending More
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- More about trading up than having to pay more
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- Figure 65: Reasons for spending more – Average across sectors, January 2019
- Top sectors for trading up
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- Figure 66: Reasons for spending more, January 2019
- Consumers feel cost pressures in food and transportation the most
Reasons for Spending Less
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- Conservative money management habits impact more than promotions
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- Figure 67: Reasons for spending less – Average across sectors, January 2019
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- Figure 68: Comparison between top reasons for spending more and spending less, by sector, January 2019
- Drinks see rigid demand from some loyal users
- Household care products sector see most people looking for price promotions
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- Figure 69: Reasons for spending less, January 2019
Lifestyle Challenges
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- Almost everyone feels there is not enough time
- Time for hobbies, exercise and sleep most squeezed
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- Figure 70: Lifestyle challenges, January 2019
Brand Impact
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- Brand is still, most of all, a shortcut to judge product quality
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- Figure 71: Impact of brand in purchasing, January 2019
- Value and personality outweigh status
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- Figure 72: Impact of brand in purchasing, by monthly personal income levels, January 2019
Attitudes towards Spending
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- Common mindset: value-driven and exploratory
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- Figure 73: General spending attitudes, January 2019
- Four types of consumers
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- Figure 74: Consumer segmentation based on general spending attitudes, January 2019
- What’s their attitude?
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- Figure 75: General spending attitudes, by consumer segmentation, January 2019
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- Figure 76: Impact of brand in purchasing, by consumer segmentation, January 2019
- What’s their behaviour?
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- Figure 77: Changes in spending – % spending more, by consumer segmentation, January 2019
- Who are they?
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- Figure 78: Consumer demographics, by consumer segmentation, January 2019
Appendix – Consumer Expenditure Forecast
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- Figure 79: Consumer expenditure by sector, 2018-23
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Appendix – Methodology and Abbreviations
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- Methodology
- Fan chart forecast
- Abbreviations
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