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With rising levels of income, more and more urban Chinese consumers have embraced the consumption patterns that a middle-class lifestyle affords. This includes spending money on things and experiences that not long ago would have been considered luxuries. It also means spending more on goods that are perceived to be of higher quality.
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According to our survey results, urban consumers spend the lion’s share of their money on three categories of goods and services: food and restaurants, clothing, and electronics.
Spending on leisure activities is growing among consumer groups at all income levels – from aspirational wage earners (typically in lower income brackets) to exclusive service buyers (among the wealthiest of those consumers interviewed). Leisure purchases will continue to grow in importance, with travel and tourism-related activities expected to become a particularly important spending category.
Understanding the changing spending patterns of urban Chinese consumers will continue to be crucial to the success of CPG companies and retailers in China. Accenture’s research indicates the following findings are of particular importance.
Although travel and tourism-related expenses placed fourth in consumers’ overall spending, the projected growth rate for this category far outpaces that of others. In 2012, Chinese consumers spent RMB 2.3 trillion (US$360 billion) on traveling within China, 17.6 percent more than the previous year. Spending on international travel grew by nearly 37 percent in the same time period.
Urban consumers are willing to spend on products that reflect one’s identity; 62 percent of urban consumers do not want to buy products that most other people buy. This attitude is most prevalent among younger consumers. Older consumers, by contrast, are more likely to spend on purchases that represent their social class. Among all urban consumers surveyed, 45 percent hold this view.
The transition to a middle-class lifestyle is prevailing in cities of all tiers. The categories of future spending among this new breed of “me” consumers are remarkably consistent. So is their willingness to pay more for better products. Accenture's research found that approximately 90 percent of respondents in each city tier express a willingness to pay at least a 5 percent premium for high-end products. Nearly 60 percent are willing to pay at least 10 percent more.
July 22, 2014
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