In China market today, “consumption upgrading” is a buzzword, which means Chinese consumers are no longer focusing only on cheap prices, they are now more willing to pay a premium for products/services whose prices they view as justified: it might be better quality, quicker delivery, better brands, smarter functions, or a combination of various factors.
Behind this change is the fact that more Chinese are wealthier and optimistic about the future. Over the past 10 years, the Consumer Confidence Index hovered just above 100 on an index where 100 is average. But, over the past two years, because of strong economic growth and low unemployment, the Consumer Confidence Index rose sharply, reaching around 125.
Consequently, Chinese consumers are less price-sensitive in categories where they have a lot of purchasing experience, such as insurance, technology, cars, hotels, healthcare, retail, and apparel. In these categories, the proportion of price-sensitive consumers dropped mo...
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