Chinese consumer confidence has been knocked but they are bouncing back. The key phrase heard throughout 2012 was 'Positive Energy'. What is this, and what does it mean for spending? patterns?
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3. 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
4. consumer confidence
This is confirmed by national statistics on consumer
confidence which indicate a downward trend since 2007
5. on the ground
I 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 found
a slower pace and more tired,
stressed faces
6. cautious
In 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
7. fight back
Chinese 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”
8. pick me up
Advertising 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.....
9. status
Status remains a huge driver of consumer spending
fuelling the luxury market
Linked 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
10. knocked off
In 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: consumers
willing to buy fake jewellery fell from
31% in 2008 to a mere 12% in 2011
11. experiential
As 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 parties
on the Bund seem as good a
way as any to spend money
12. design & function
Apple'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!
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