China's Positive Energy: On the ground insights into Chinese consumers
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Transcript of China's Positive Energy: On the ground insights into Chinese consumers
Positive Energy:10 insights into
Chinese consumerattitudes
Asia 5Bringing you a flavour of businesstrends in Asia...in just 5 minutes
A Futures Coaching initiativewww.futurescoaching.com
stock market
The Shanghai composite is down 25% from its 2011 high. If the Chinese stock market is taken as the most responsive measure of social mood, we would expect Chinese middle classes to be very negative right now
consumer confidence
This is confirmed by national statistics on consumer confidence which indicate a downward trend since 2007
on the groundI was in Shanghai for the Expo in 2010 and things were really buzzing – as I blogged about in 'Changing China'Anecdotally, people were:
- smiling- walking with purpose- dynamic- asking 'what's new?'
But in December 2012, I founda slower pace and more tired, stressed faces
cautiousIn a City of 23.5 million, people keep themselves to themselves:
- there seems little spontaneous social interaction- people stay in their shells and venture out only after
the other person takes the initiative- prudence prevails – people keep close hold on their
possessions - and their children
fight backChinese social researcher Priscilla Sze confirmed the bleaker mood to me – people are more concerned about the future and are reigning back on spending
Despite this, people are being encouraged to retain their optimism. The key phrase to be heard throughout 2012 was:
“POSITIVE ENERGY”
pick me upAdvertising plays a key
role in this: the whole dynamic is so much
more upbeat than in the West
The happy faces and zingy colours would be
seen as false in the sceptical, downbeat West. In China, they
inspire people to reach for the stars.....
statusStatus remains a huge driver of consumer spending fuelling the luxury marketLinked to the reputation and honour of one's 'face' and the need to stand out in a population of 1.3bn, McKinsey predict the Chinese luxury market to top $27bn by 2015 – or some 20% of the global luxury market
knocked offIn signs of a maturing marketplace, the Chinese increasingly reject poor quality
In many cases, this means favouring 'western' brands over 'local'
But it also increasingly means rejecting fake and false: consumerswilling to buy fake jewellery fell from31% in 2008 to a mere 12% in 2011
experientialAs in the West, luxury is becoming more experiential
BSG reported in 2012 that sales for luxury goods were increasing at 22% annually but this was bested by luxury experiences up 28%
Private New Years' Eve partieson the Bund seem as good away as any to spend money
design & functionApple's rise and rise suggest that the Chinese consumer is willing to look beyond status and introduce design and functional criteria
Apple has positioned itself to represent more than just luxury – but the cult of western individuality through its design differentiation....and it's working!
iphone sales were up by 500% Q2 2011-Q2 2012; on the metro everyone seemed to be using one!
Acknowledgements
Data were drawn from Wharton's Jan 2013 article:
“Apple's foray into China”
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