Chinese consumers set to beat global averages on spending: PwC report

Chinese consumers will have a stronger tendency to spend more on health and beauty products, home entertainment and consumer electronics in the next six months than the global average, despite challenges brought by the pandemic, a new study says.

A total of 41 percent of Chinese consumers expect to increase spending on health and beauty products compared to the 29 percent global level, according to the latest PwC 2022 Global Consumer Insights Survey China Report conducted in June this year.

The differences were similar in the home entertainment category where 37 percent of Chinese consumers were expected to spend more versus the global expectation average of 30 percent, the survey showed.

"The economic conditions will improve on pent-up consumption demand in the months ahead and growth momentum is expected to rebound in the second half of 2022, aided by a slew of policy stimuli such as consumption vouchers," said Jennifer Ye, PwC China Consumer Markets Leader.

As many as 45 percent of consumers are more inclined to buy domestic brands, rising from 35 percent from a year earlier, said the survey report which covered over 500 shoppers in 52 cities in China.

The percentage of consumers who are indifferent as to whether a brand is foreign or domestic dropped to 33 percent from 41 percent measured in December last year.

Domestic labels like Li-Ning and Anta Sports have already earned widespread support from guochao (China-chic) lovers.

About half of Chinese shoppers cite quicker and more convenient purchase experiences, shorter delivery times, and support for the local economy as major reasons for their preferences for home-grown brands.

Chinese consumers are nearly twice as likely as global respondents to pay a higher than average price for a product that is traceable or has a transparent origin, according to the PwC study which covered over 9,000 consumers in 25 countries and regions.

They are also more inclined to switch to buying products online and using alternative shopping sites to check availability when having issues at physical stores.

Chinese consumers have also increased their shopping frequency, combined with lower purchase amounts, which would result in more conservative spending for non-discretionary items, instead of making large amount one-off purchases.

Brand owners and retailers have already leveraged the new trends and stepped up delivery and courier services to facilitate real-time shopping.

For example, major digital retailers like Meituan and JD Daojia have teamed up with vendors of the latest iPhone model to offer home delivery.

JD Daojia said that since digital e-vouchers and various promotional activities have been offered since late August, sales of menswear increased by 4.8 times in the week compared to a year earlier. Sales of home appliances soared by 5.7 times and perfumes and make-up packages grew by over three times.

According to a joint white paper by China Chain Store & Franchise Association and Dada Group, the open on-demand retail platform market is expected to enjoy 50 percent annual increases and reach 1.2 trillion yuan (US$185 billion) by 2025 to cater to booming home delivery demands.