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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