Consumer characteristics in China
The majority of Chinese people are in the age group with high consumption needs (15 to 64 years old), accounting for 68.2% of China's population (Statista.com, 2022). The Chinese population is concentrated in great plains of Eastern China, and in large cities such as Shanghai, Beijing, Chongqing, Tianjin and Guangzhou.
With a large population and relatively high GDP per capita, China is a market with huge purchasing power. The demand for consumer products of Chinese people is also very diverse, from essential goods (such as food, clothings, footwear...) to entertainment and luxury products (such as jewelry, vehicles of all kinds...).
Main consumer products
According to data from Santandertrade, Chinese consumers spend up to 38.5% of total spending on housing, electricity and water. Next, Chinese people also spend 27.3% of their spending on food and beverages. Thus, up to 2/3 of the total spending of Chinese people is for essential products, serving personal demands for food and accommodation.
Table - Common consumer goods and services in China in 2021
|
Consumer goods/services |
Proposition in total expenditure of consumers |
|
Housing, water and electricity, natural gas, and other fuels |
38.5% |
|
Food and non-alcoholic beverages |
27.3% |
|
Transportation |
7.5% |
|
Clothes and footwear |
3.5% |
|
Durable goods |
3.2% |
|
Alcoholic beverages, tobacco |
0.5% |
|
Others |
19.5% |
Source: Santandertrade, 2023
Consumption trends in China
The majority of Chinese consumers have low incomes, so the utility and price of goods still play an important role in consumers' purchasing decisions. However, shopping behavior of a portion of Chinese consumers (especially the middle class and young people) gradually changed over time, they began to pay more attention to brand and their purchasing decisions are also influenced by product marketing methods. In addition to price, Chinese consumers pay attention to product quality and are willing to pay a high price for the goods if the price is commensurate with the quality.
With the improvement of consumers’ living standards and quality, the demands for high-quality, luxury goods have increased in the Chinese market, and this country is also known as the largest market for luxury brands. China's domestic sales of personal luxury goods increased by 48% in 2020 and by 36% in 2021, with a value of nearly RMB 471 billion – nearly doubling in just 2 years despite negative impacts of the COVID-19 pandemic (according to Bain & Company).
Chinese consumers are quite curious about new and strange products, so they are relatively open and easily accept imported products from abroad.
E-commerce is in the process of developing in China and is very differentiated. Urban consumers especially favor e-commerce, while this type of commerce is less popular in rural areas (especially in remote areas that are difficult to access or have no the internet). More than 900 million Chinese use social networks, and about half of them use them regularly. A large number of Chinese consumers have the habit of watching videos and following influencers to get opinions about products. They are less worried about personal data being exposed.
Although most Chinese consumers still do not pay much attention to the environmental aspects of goods, a segment of young people, especially those in urban areas, are increasingly willing to pay more to consume environmentally-responsible products.
Source: Center for WTO and International Trade
