Spending Power in China

In general, Chinese consumers care about health, food safety, air quality and all things directly related to their personal well being and the well being of their family.  Although they are often loyal to stores and brands they frequent, they are also easily swayed by online reviews, word of mouth referrals, deep discounts and promotions. In fact, Chinese consumers actually enjoy trying out new products and are interested in what is the next big thing.  Therefore, 86% of consumers are willing to actually pay more for a better customer experience, a huge opportunity for brands.

In China, it’s valuable to recognize the importance of the Chinese family unit, where often four generations live together in close quarters.  Globally speaking, we realize that the shopper is not always the consumer and the consumer is not always the shopper, but due to the only child policy in China where children often remain living in their parents and grandparents home into their mid 20’s, this fact is even more important. Although, often only children are seen as financially indulged, Chinese parents typically make the primary purchase decisions for their children until they move out of the house. It is important to note that millennials do have some buying power over small ticket items, including snacks and beverages. There is also an increasing trend for parents to “train” their children in the value of money by giving them a weekly allowance.

Some of the largest health issues in China include smoking and alcohol, which are primarily male issues and therefor the health focused consumer tends to be dictated by the female population. This has allowed Chinese mom’s to quickly become the most important consumer on the planet, with an estimated 320 million moms, they are roughly the size of the entire US population.  

Due to the family unit living together, one or two sets of retired parents are usually at home providing child care and raising their children. This allows for Chinese moms so go back to work and in turn typically contribute to 50% of the household family income in China. They have personal spending power, plus that over their children, husband and retired parents.

They purchase products for their family from soft drinks and snacks for their kids to traditional alcohol and personal care products for their parents and in-laws giving them decision making power across categories.  These mom's are now considered “home category managers,” and in China the most powerful consumer, driven by value, trust and health.