Page 328 - 2022 White Paper on the Business Environment in China
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2 White Paper on the Business Environment in China
2.11 Consumer Goods
Key Take-Aways their spending on beauty and cosmetics, followed
by clothing and shoes. Nearly 36% of respondents
• Confidence in spending is returning. said their spending on luxury goods was more than
what they had anticipated in 2020. Spending on
• Chinese millennials are driving expansion such purchases was the highest in third-tier cities,
of goods purchased. at 41%. Niche luxury brands, excluding watches,
were among the key purchases, said the survey.
• E-commerce has exploded. Confidence and pride about Chinese brands are
also increasing among Chinese consumers, marked
• Elderly consumers are turning to shopping by the rise of Guochao or China-Chic. Nearly half
online. of the respondents believe that Chinese brands
are reporting better performances and have
• China Tourism, awaiting Hong Kong IPO, bigger price advantages over international brands.
touts Hainan duty-free haven for tourist dollars in The pandemic has also affected the consumption
rivalry with Okinawa and Jeju. mindsets, purchase patterns and lifestyles, with
65% of the respondents opting to buy higher quality
• China Tourism looks to Hainan’s offshore items, while 59% prefer to buy more luxury items
duty-free zone to capture domestic tourist dollars, as they want to treat themselves better, said the
which is expected to reach US$46.5 billion a year report. At the same time, COVID-19 has further
by 2025. helped accelerate the use of digital channels among
consumers, with 55% of the respondents indicating
• Milk tea is a rapidly growing industry. that they prefer to use online channels more often
for purchasing luxury goods after COVID-19 started.
Covid-19 Repercussions When it comes to offline shopping, consumers
deferred their overseas shopping plans and
One of the most important aspects to consider turned their focus to inbound shopping, making
regarding consumer goods in China is the return to Shanghai, Beijing, Guangzhou, Shenzhen and Sanya
pre-COVID-19 levels of confidence and spending. the top five cities for luxury product purchases.
Consumer confidence has returned to pre-COVID-19 Duty-free stores in Hainan province are rising
levels in the luxury industry on the Chinese rapidly, becoming a key shopping destination for
mainland, with digital channels and Generation Z consumers. Sanya has surpassed all other second
consumers being the main driving forces, a 2021 and third-tier cities to become the fifth-largest
industry report said. According to the 2021 China luxury shopping city in the market. Generation Z
Luxury Forecast, released by Ruder Finn, a leading consumers, or those aged between 21 and 25, have
integrated communications consultancy, nearly become an important force in luxury consumption,
41% of respondents said they would increase and are spending more on luxury goods that
their spending on luxury goods over the next 12 "improve life quality". Generation Z consumers are
months. The survey tracked responses from 1,500 significantly more dependent on online influencer
consumers on the Chinese mainland with average recommendations than older respondents, as only
annual household income of 1.44 million RMB 6% of them get luxury information from television
($224,434) during January. Most of the respondents (Zhuoqiong, “Forecast Finds Consumer Confidence
indicated that they are willing to increase or maintain Back to Luxury”).
328
2.11 Consumer Goods
Key Take-Aways their spending on beauty and cosmetics, followed
by clothing and shoes. Nearly 36% of respondents
• Confidence in spending is returning. said their spending on luxury goods was more than
what they had anticipated in 2020. Spending on
• Chinese millennials are driving expansion such purchases was the highest in third-tier cities,
of goods purchased. at 41%. Niche luxury brands, excluding watches,
were among the key purchases, said the survey.
• E-commerce has exploded. Confidence and pride about Chinese brands are
also increasing among Chinese consumers, marked
• Elderly consumers are turning to shopping by the rise of Guochao or China-Chic. Nearly half
online. of the respondents believe that Chinese brands
are reporting better performances and have
• China Tourism, awaiting Hong Kong IPO, bigger price advantages over international brands.
touts Hainan duty-free haven for tourist dollars in The pandemic has also affected the consumption
rivalry with Okinawa and Jeju. mindsets, purchase patterns and lifestyles, with
65% of the respondents opting to buy higher quality
• China Tourism looks to Hainan’s offshore items, while 59% prefer to buy more luxury items
duty-free zone to capture domestic tourist dollars, as they want to treat themselves better, said the
which is expected to reach US$46.5 billion a year report. At the same time, COVID-19 has further
by 2025. helped accelerate the use of digital channels among
consumers, with 55% of the respondents indicating
• Milk tea is a rapidly growing industry. that they prefer to use online channels more often
for purchasing luxury goods after COVID-19 started.
Covid-19 Repercussions When it comes to offline shopping, consumers
deferred their overseas shopping plans and
One of the most important aspects to consider turned their focus to inbound shopping, making
regarding consumer goods in China is the return to Shanghai, Beijing, Guangzhou, Shenzhen and Sanya
pre-COVID-19 levels of confidence and spending. the top five cities for luxury product purchases.
Consumer confidence has returned to pre-COVID-19 Duty-free stores in Hainan province are rising
levels in the luxury industry on the Chinese rapidly, becoming a key shopping destination for
mainland, with digital channels and Generation Z consumers. Sanya has surpassed all other second
consumers being the main driving forces, a 2021 and third-tier cities to become the fifth-largest
industry report said. According to the 2021 China luxury shopping city in the market. Generation Z
Luxury Forecast, released by Ruder Finn, a leading consumers, or those aged between 21 and 25, have
integrated communications consultancy, nearly become an important force in luxury consumption,
41% of respondents said they would increase and are spending more on luxury goods that
their spending on luxury goods over the next 12 "improve life quality". Generation Z consumers are
months. The survey tracked responses from 1,500 significantly more dependent on online influencer
consumers on the Chinese mainland with average recommendations than older respondents, as only
annual household income of 1.44 million RMB 6% of them get luxury information from television
($224,434) during January. Most of the respondents (Zhuoqiong, “Forecast Finds Consumer Confidence
indicated that they are willing to increase or maintain Back to Luxury”).
328
