Cautious spending for brand conscious Chinese

Western companies are increasingly counting on China to deliver growth not available elsewhere, but the country’s consumers remain reluctant when it comes to spending, according to a survey of consumer attitudes published by the Economist

Intelligence Unit, reported the Financial Times. “Chinese consumers, both urban and rural, although optimistic about the future, remain big savers and cautious spenders, despite their government’s concerted effort to stimulate domestic demand,” the EIU said on Friday.

The EIU concluded that while 91 per cent of respondents said they were optimistic about the future – a much higher number than in other countries – even well-off urbanites save a very high percentage of their household income.

Two-thirds of Shanghai residents save a quarter or more of their household income (compared with under 15 per cent for the hardly profligate Swiss), and a third save 35 per cent or more. In less developed smaller cities, the figures are even higher.

Chinese consumers are not just cautious, they are also increasingly demanding, McKinsey found in a consumer attitudes survey released this week. Although Chinese consumers remained very brand conscious, “they are also tremendously value orientated,” McKinsey said. “We are seeing more maturity in consumer behaviour,” said Yuval Atsmon, retail expert at McKinsey in Shanghai.

“Consumers are not just swayed by the big brand names, they are willing to pay for products that are better, but are
also weighing the different dimensions in a more mature way.”

Source: FT
Image: Shanghai