HONG KONG — Three-quarters of Chinese consumers plan to maintain or increase their spending this year, according to new research from The Boston Consulting Group.
The consultancy, which interviewed some 3,500 consumers for its survey, noted that the 75 percent figure dropped only slightly from the 81 percent of respondents who gave that same answer last year. BCG said consumer sentiment in the country remains strong despite slowing economic growth and market volatility.
“Even as sentiment moderates a bit, it is important to note that we are looking at a slowdown in consumption growth,” said Jeff Walters, a BCG partner. “Consumption in 2016 will be tantamount to consumers’ moving from the fast lane to the middle lane on the economic highway. They are not pulling into the breakdown lane.”
BCG said that Chinese consumers, particularly those employed in the slowing industrial sectors, have become more cautious. Household income growth declined to 8.7 percent in the first quarter of 2016 from 9.4 percent a year earlier, BCG noted.
The rise of middle-class consumers and a new generation of younger, freer-spending, sophisticated consumers is driving the consumption wave in China, BCG said. Those aged 18 to 30 years old will likely make up more than one-third of China’s urban population by 2020, BCG said. This consumer group’s consumption is growing at an annual rate of 14 percent — twice the pace of the “last generation older than 35, according to the research.
“These consumers, for the most part, grew up during a time of expanding wealth as China made the transition to a market-based economy. One result is that they are notably more aggressive in their spending intentions,” BCG said.
Infant and baby products, consumer electronics and financial services remain the three categories in which Chinese consumers are most likely to trade up, BCG said. The consultancy noted that personal-care products like skin care and beauty items and travel are moving up the list while cars and durable goods are moving down.