CHINA. Chinese consumer confidence is rising sharply, according to a new survey from the China Economic Monitoring & Analysis Centre (CEMAC) – a division of the country’s National Bureau of Statistics – and The Nielsen Company.
The latest Chinese Consumer Confidence Report, which covers Q4 2009, researched the views of over 3,500 shoppers across China’s cities, towns and rural villages. A key element in the report, the Consumer Confidence Index, rose by 16 points compared to Q1 2009, to 104. The survey found that confidence among consumers has reached heights not seen since 2007.
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When the same survey was conducted in early 2009, consumer morale was at an all time low, and “˜job security’ and “˜the economy’ were cited as consumers’ biggest concerns. Now with less economic uncertainty as consumers head into 2010, “˜work/life balance’ and “˜health’ are the key concerns, the survey found.
Consumers in the west of China recorded the greatest lift in optimism (+8 points compared to a year ago), helping to close the gap in confidence between the regions. Tier 5 consumers (those in smaller towns, villages, and rural areas) also showed the greatest boost in confidence, thanks in part to a strong food harvest at the end of 2009, along with government incentives.
Consumers in the largest Tier 1 cities also grew more confident as their views about local job prospects and the state of their personal finances improved.
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Crucially from a travel retail viewpoint, consumers are now showing an increasing willingness to spend, the survey found.
The Nielsen Company Greater China President Mitch Barns said: “The latest survey suggests that consumers have continued to regain their optimism about the economic future. This is just another sign that the economy is heading in the right direction. It also presents great opportunities for those businesses looking to drive more demand for their brands, especially during the upcoming Chinese New Year season.”
He added: “We saw a strong rebound in consumers’ willingness to spend, especially among Tier 1 and Tier 5 consumers. Tier 1 consumers’ are more likely to be investing in stocks and bonds and planning holidays, compared to people in lower tier cities.”
There is an increasing interest in buying new technology, added Barns. “With 338 million internet users, China is certainly experiencing a profound change in media consumption, and that is also having an impact on the formation of product and brand preferences and purchasing habits.
“It is estimated that 88 million Chinese consumers have purchased online, and almost two-thirds of these consumers bought products online within the last month. For many businesses, there is a great opportunity to increase their use of new media in order to drive faster growth in consumer demand for their brands.”
Barns concluded: “At this time 12 months ago, many economies around the world were in decline and there was a lot of anxiety; consumer confidence hit an all-time low in our global index. As governments acted quickly to bail out banks and install massive stimulus programmes, we started to see the first signs of recovery in our consumer measures late in Q1 and into Q2 2009, driven primarily by the emerging markets.
“By the third quarter, most of the world’s key markets had consumers who were feeling more positive about the future. While that optimism has continued to build as we begin 2010, many are still waiting to experience real economic improvement in their daily lives.
“In China, we are already seeing it to some extent, with job markets heating up and consumer sales again growing faster than GDP. Will it continue, will it be sustainable, and will inflation return to the headlines? These will be some of the key things to watch in the coming months,” said Barns.
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