China is likely to become the world's second largest consumer market by 2015, said a report released by the Boston Consulting Group (BCG).
The report is based on a survey of 4,258 consumers in 13 Chinese cities conducted from February to March 2007. According to the report, Chinese consumers are experiencing unprecedented wealth growth, 3 to 5 times faster than that which developed countries experienced in the past 50 years. Most Chinese consumers plan to spend more in near future to fulfill their family dreams.
"The past decade of rapid economic growth has brought prosperity but also uncertainty, resulting in a highly complex consumer market with diverse consumer attitudes," said Hubert Hsu, senior partner and managing director of BCG, at a press conference in Beijing.
"Capturing the next wave of consumer growth in China will involve developing deep consumer insights and creating marketing differentiation," said Hsu.
The report said there are significant generational differences in terms of spending attitudes among Chinese consumers. The strong interest in trading up, which means spending more money for more expensive products, was driven up by consumers' increasing desire for better goods and services and rising concern over the safety and quality of cheaper products.
Chinese consumers put more faith in brand names compared with US consumers. They believe good brands represent quality, safety, effectiveness and durability, said Hsu.
Despite strong trading up desires, Chinese consumers continue to "treasure hunt" - make deliberate trade-offs to maximize "value" in their budgets. They have similar strategies for treasure hunting as their counterparts in other countries but also utilize several unusual tactics such as group purchase for volume discount, said the report.
The report suggested that global suppliers in China should establish strong, brand identified relationships with China's treasure-hunting consumers, provide the kinds of products that appeal to practical concerns and emotional needs and be willing to customize their offerings to meet the needs of a geographically diverse population.
Retailers must make sure that the categories they carry are the ones that treasure-hunting consumers will seek and focus on a product's technical and emotional benefits, according to the report.
(Xinhua News Agency October 21, 2007)
