McKinsey, the international management consultancy, says three findings stand out from its latest annual survey of China’s consumers:
- Even in the face of rising inflation, Chinese consumers are more confident this year than in 2010 about their financial prospects. Note, though, that the survey field work was done between February and April when inflation was not seen as being as persistent as it has turned out to be and confidence in the global economy not affecting China’s growth greatly was still strong.
- Among urban consumers, the number of first-time buyers—a group that has been a major driver of category growth in China—is declining. Note, though, that in less mature niche categories and with several big-ticket items, first-time buyers remain important.
- Brand awareness is rising, but there is little sign that brand loyalty is following suit. More and more consumers choose among a growing number of favorite brands, typically three to five in any category. Note, thus, that faith in brands does not necessarily translate to brand loyalty.
The good news for retailers is that consumers embrace thousands of new products, services and brands with ease. The less good news is that this ready acceptance can leave retailers breathless trying to keep up.