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China’s consumer market and consumers need time to recover.
Under the joint effect of long-term trends such as development transformation, intergenerational change, technology penetration and the impact of the current epidemic, Chinese consumers are becoming more cautious and more willing to increase spending in the consumption field that brings long-term value – this conclusion comes from the “2022 Chinese consumer insights” series recently released by Accenture, a consulting company (hereinafter referred to as the “report”). This series mainly focuses on the overall situation of the consumer market and the sinking market, and conducts research and analysis in a quantitative and qualitative way.
In the past 40 years, China’s consumer market has developed vigorously. Since 2014, consumption has been the first driving force driving China’s economic growth for six consecutive years. In 2019, the per capita GDP exceeded US $10000, achieving a historic breakthrough; In the same year, the total retail sales of consumer goods exceeded 40 trillion yuan, and China became the second largest consumer market in the world. In 2020, due to the impact of the epidemic, consumption increased negatively, but it still accounted for 54.3% of China’s GDP in the end, and the driving force to economic growth picked up quarter by quarter. In 2021, the contribution rate of final consumption expenditure to economic growth will be 65.4%, driving economic growth by 5.3 percentage points. Consumption has become the main driving force for the stable recovery of the national economy.
The new change is that as the growth of residents’ disposable income slows down, the consumption expenditure of residents shrinks, and the proportion of consumption expenditure to income – that is, the consumption tendency of residents – weakens, so the growth of total consumption slows down year by year. Affected by the superimposed factors of the epidemic, people’s risk awareness has increased and preventive savings have increased. In 2020, the consumption tendency of residents dropped to a historical low of 62%, and the per capita savings increased by 7500 yuan year on year. In 2021, the consumption tendency rebounded to 64%, but it was still lower than the pre epidemic level.
The report points out that with the improvement of people’s living standards and the expansion of the definition of value, consumers are increasingly pursuing quality, brand identity and experience in the purchase process while paying attention to functions and cost-effectiveness. The epidemic has prompted people to examine the significance of consumption, and people have begun to view consumption with an investment mentality – the value of goods or services is not only the current experience and enjoyment, but also the future return.
Five trends of consumption concept and mode
The survey results of the report show that in recent years, the consumption concept and mode of Chinese consumers have shown five major trends: “I” economy, New Rationalism, being the master of time, symbiosis with technology, and sustainable prosperity.
The “I” economy in the report refers to the increasingly obvious “self” consciousness of consumers, who pay more attention to their internal needs. With the popularization of intelligent devices and the in-depth and diversified development of e-commerce platforms, the original collective family decision-making began to be dismantled, and the decision-making power of family consumption returned to the individual. Each family member had a stronger influence on the goods he used, or directly obtained the decision-making power.
On the other hand, consumption becomes human
For large brands with deep brand accumulation and strong R & D and supply chain strength, in the extremely diversified and rapidly changing Chinese market, facing Chinese consumers who are proficient and willing to study commodity characteristics, in addition to making good products and meeting people’s real needs, they also need to pass on high-quality content through the information channels concerned by the target consumers, so as to have the opportunity to leave a deeper brand mark in each “research” and “comparison”, So as to accumulate brand awareness and ultimately achieve sales growth.
The trend keywords worth mentioning include “technology” and “sustainability”. The report points out that more consumers are eager for people-oriented technology applications and are willing to fulfill their green commitments. 70% of the respondents said they were willing to share personal data in order to obtain better services, while 50% of the respondents thought that the frequency of advertising was too high; Almost all Chinese respondents recognized the value of environmental protection and sustainable development, and 43% of the respondents said they were willing to pay a premium for environmental protection products.
The consumption demand of the sinking market needs to be further explored
Due to China’s large population, there are regional differences in disposable income and availability of goods and services, and there are significant differences in consumption tendencies among cities at different levels. According to the report, respondents in the third tier and below markets are significantly less willing to invest in savings / financial management, medical care / insurance, children’s education and sports and fitness than those in the first tier and second tier cities, while they are more willing to increase their spending in shopping, catering, personal education and leisure and entertainment than those in the first tier and second tier cities.
“We observed that the five major trends in the report also exist in different line level consumer markets. However, under the influence of some internal and external conditions, such as consumers’ own factors, including disposable income, disposable time, family structure and social relations, and external factors, such as the availability of goods and services, these trends show differences between cities.” Accenture explained to yimagazine.
For example, the trend of “new rationality” is very obvious in the sinking market, and its manifestation is unique. Compared with the first and second tier cities, consumers in the sinking market are more reluctant to be “moonlight clan”, more practical and more interested in comparison. On average, 59.8% of the personal / family income of consumers in the sinking market is allocated to daily consumption; 11.8% was used for asset investment and 28.4% was used for financial investment. 70% of the respondents said that the household daily expenditure accounted for more than 50%, of which food and beverage, clothing, shoes and hats were the main consumer goods, accounting for 62.8% and 74.4% respectively.
Interestingly, consumers in the sinking market are very willing to pay for their appearance. Nearly 80% of the respondents in the sinking market said that the appearance design of the products would stimulate their shopping interest. Price is no longer the first attraction factor, but beauty is the first.
The special features of consumers in the sinking market are also reflected in their attitude towards technical products. According to the report, compared with the survey data of Chinese consumers in 2017, the penetration and interest of smart home appliances have increased significantly. two thousand and twenty-one
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