Chinese selective spending habits part II: Creating the desired lifestyle

By Natasha Spencer

- Last updated on GMT

Chinese selective spending habits
We continued our conversation with Laurel Gu, Research Director, and Jessica Jin, Associate Beauty Director, both of Mintel, on the Chinese economy and how selective spending habits are causing a thought-provoking stir for brands. 

Health and wellbeing push

Product and service evolution is expected to remain positively strong over the next five years, as health and wellbeing remain a main concern for buyers. Healthy lifestyles are a top priority for Chinese consumers, with 80% stating they will definitely “have a healthier diet”​ in 2017 and 75% reporting that they will “exercise more”​.

As health and experience remain key decision-making factors for Chinese shoppers, there is the notion that "potential gaps"​ exist in the market that indicate "consumers living in towns or rural areas are not yet picking up as a part of upgrading their living quality”​, Gu stated.

Metropolitans, for example — a middle-class demographic group profiled as enjoying travel and holidays  — “tend to associate a healthy lifestyle with not just exercising and watching what they eat, but also a variety of meaningful leisure and social experiences”,​ Gu commented as experiential beauty enters into the forefront of the shopping experience​.

The Chinese Consumer 2017 report​, produced by Mintel explores the insights, innovations and outlooks that are set to transform the industry in the coming years.

Life upgrade

“Consumers are looking to upgrade their life from all aspects, including food, travel, home, leisure life and more. However, given their limited budget, they have to be selective in terms of where to prioritise their spending,”​ Gu highlighted.

Educating the market has been a core element of brands’ strategies for some time now, particularly high-quality smaller names, and this is now starting to have an impact: “People are becoming more knowledgeable; instead of simply going for big brand names, they are able to make their own evaluation when it comes down to quality and the types of product features worth paying more for,”​ Gu added.

This has, therefore, resulted in some segments such as the leisure industry witnessing a faster increase in spending, while others, like household care, are flatter.

Safety and sensitivity

How brands communicate their stories to potential target audiences is now transforming, as messages lean towards "the advanced technology used, ingredients, format and more”.​ Expedited product launch cycles are also taking place in an effort to overcome these selective spending habits.  

Sensitivity to ingredients is notable, with consumers showing more interest in free-from concepts.

“As a result, it is easy to understand why consumers are increasingly attentive to safety claims and are expecting to see authorisation by professional institutions,”​ Jin put forward.

When it comes to buying beauty and personal care items, “the majority of consumers are doing their research online prior to making a purchase”​. Once consumers have seen a product in-store and become curious about it, they use search via their smartphones to look for product information such as buyers’ reviews, product features, and price.

“Therefore, it is harder for brands to rely on consumers’ impulsive purchase habits,”​ Jun reiterated.

“Over the next few years, the Chinese economy will still be driven by increasing domestic consumption, essentially out of consumers' desire for an improved or higher living quality,”​ Gu concluded.

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