Chinese consumers keep spending in check amid shaky economy, hunting bargains on drinks, personal-care goods: report
- Spending on consumer goods fell 0.9 per cent year on year during the third quarter, according to Bain & Company and Kantar Worldpanel
- Consumers are ‘discerning’ about where they are willing to spend, leading to an increase in specialised discount stores, report says
Chinese consumers, spooked by concerns about job prospects amid a bleak economic outlook, continue to actively hunt bargains when they purchase consumer goods like personal care products, according to a joint study by global consultancy Bain & Company and market research firm Kantar Worldpanel.
Total spending on fast-moving consumer goods (FMCG) in mainland China dropped 0.9 per cent year on year during the third quarter of 2023, the report showed, without revealing absolute numbers. The decline followed a 1.8 per cent year-on-year rise in the previous quarter.
“The key word that describes this consumer environment is that consumers are more discerning, and they make educated choices,” said Bruno Lannes, a partner at Bain in Shanghai. “For some products, they would be happy to pay a premium because they see true value for them there. And for other products, they would not purchase because they don’t see the true value.”
Personal care products witnessed a 4.5 per cent reduction in average selling price over the first three quarters of this year, while discounts offered by brands drove up sales volume by 2.5 per cent, the joint study found.
In the beverage segment, consumers exhibited a clear preference for value-driven choices, prompting a shift towards more economical products. Average selling price slid 1.5 per cent in the first three quarters, while a 1.6 per cent increase in volume was recorded.