Archive for ‘Consumer’

« Older Entries  |   Newer Entries »
24/07/2013

Consumer optimism hits a high

China Daily: “Income growth and willingness to spend more are main driving forces

Consumer confidence in China has topped that in other major economies to equal a record high, and economists are saying this signals that consumption will support the world’s second-largest economy, where growth is slowing.

A survey by global information company Nielsen shows China’s consumer confidence index, based on its market research, rose to 110 in the second quarter from 108 in the first, indicating increased willingness to spend on consumer goods and services.

It also reached 110 in the second quarter of last year.

Zhang Monan, an economist at the State Information Center under the National Development and Reform Commission, said domestic demand, especially consumption, will become crucial to supporting economic growth in the second half of the year.

Tao Libao, vice-president of media research at Nielsen Greater China, said, “With the industrial transformation, consumption will become the growth engine.”

The central government has pledged to promote structural reforms, shifting from investment-driven to consumption-oriented development, while ensuring stable economic growth and secure employment.

The Nielsen Global Consumer Confidence Index, released on Tuesday, rose to 94 in the second quarter, compared with 93 in the first.

A reading below 100 means that consumers are pessimistic about the outlook, while a reading above 100 signals optimistic expectations.

Nielsen said consumer confidence declined in 14 of 29 European countries as government budget cuts, tax rises and high unemployment continued.

Consumer confidence improved in the United States, along with increasing employment opportunities, higher home prices and a rising stock market, the company said.

In the second quarter, China had the fifth-highest reading of indices among 58 countries based on surveys covering more than 29,000 global respondents.

Fast growth of disposable income and people’s willingness to spend more on improving quality of life, especially in large cities, was the main driving force behind this, the company said.

The average disposable income of urban Chinese residents was 13,649 yuan ($2,201) in the first half of the year, up 9.1 percent from a year earlier, while the disposable income of rural residents rose to 4,171 yuan, up 13 percent year-on-year, according to the National Bureau of Statistics.

Retail sales of consumer goods rose by 12.7 percent in the first six months to 11.08 trillion yuan, compared with a 12.4 percent growth rate in the first quarter, the bureau said.

Beijing, Shanghai and Guangzhou, with 7 percent of China’s population, contributed about 25 percent of the country’s spending on consumer products and services, Nielsen said.

As urbanization speeds up and consumers pursue a better quality of life, they will have a deeper understanding of consumption, said Yan Xuan, president of Nielsen Greater China.”

via Consumer optimism hits a high |Economy |chinadaily.com.cn.

Posted in China alert, Consumer, Economics | Leave a Comment »

Tags: , , , , ,
23/07/2013

China’s Smartphone Generation

BusinessWeek: “Every day at noon, workers spill out through the red gates of the Xue Fulan garment factory on the outskirts of Beijing to enjoy one precious hour of lunchtime freedom. They are mostly in their late teens or early 20s, living in no-frills dormitories within the factory complex. Most saunter out on a hot summer day with a water bottle in one hand and a smartphone in the other.

Commuters use their phones riding a Metro train in Shenzhen City, China

While personal computers are rare inside the factory, many of these young migrant workers—who are just climbing onto the lowest rung of the urban economic ladder—are now on the Internet daily. With 12-hour workdays, their free hours are scarce, but they still find time to use social media and dating apps, play video games, and read lifestyle and news sites, where they can catch a glimpse of the upscale urban life they aspire to.

Last week the government-affiliated China Internet Network Information Center reported that 591 million people in China now have Internet access; that’s 45 percent of the population. Just six years ago, only 16 percent of China’s population was online. Among the drivers of the steep rise in Internet penetration: the rapid adoption of Internet-enabled mobile devices, especially among groups that previously lacked regular connectivity, including China’s migrant workers. More than three-quarters of China’s netizens (464 million people) now use a mobile Internet device—instead of, or in addition to, a laptop or PC.

Kantar Media, a U.K.-based global consumer research and consulting firm, polled nearly 100,000 Chinese Internet users about their online habits and preferences in 2012 and just released its analysis of the study: 59 percent of respondents said that online chat and dating were their favorite uses of the mobile Internet, while 43 percent described themselves as “frequent” users of social media. Notably, the number of Chinese netizens who claimed they had visited a social media site in the past day was higher among mobile Internet users (32 percent) than among all netizens (26 percent). Weixin (“WeChat”), Tencent’s (700:HK) popular social-media app, is almost exclusively used on smartphones and tablets.

Megacity commutes are also correlated with more time online. In 2012, Chinese commuters who travelled more than one hour to work were three times as likely to go online daily as those whose commutes were under a half hour. As China’s large cities sprawl, traffic jams proliferate as well. Shen Ying, a general manager at CTR Media, Kantar Media’s joint-venture partner in China, believes that the “fragmentation of ‘social’ time created by longer commutes” goes hand in hand with the “desire for social networking.” Fortunately for China’s lonely subway passengers, Internet access on Beijing’s subway is more stable than on New York City’s.”

via China’s Smartphone Generation – Businessweek.

Posted in China alert, Consumer, Economics, Internet, Migrant workers, social media | 1 Comment »

Tags: , , , , , , , , , ,
30/05/2013

In China, Big Data Is Becoming Big Business

Business Week: “With 1.3 billion people, a quickly expanding urban economy, and rising rates of Internet and smartphone penetration, China generates an immense amount of data annually. If streams of that data can be appropriately sifted, analyzed, and stored, companies seeking to understand China’s often-fickle consumers could have access to valuable real-time insights—and perhaps early warning to the next big consumer trends.

Shopping drives Beijing's Sanlitun area

At a presentation last week at Peking University’s Guanghua School of Management, China’s premier business school, associate professor of marketing Meng Su predicted: “China will soon become world’s most important data market.” He advised job seekers in China and elsewhere to consider training for a new career path as “data scientists,” which he described as “one of the most valuable jobs in the next 10 years.” Interpreting big data seems poised to become big business.

China’s government has signaled its intention to help domestic enterprises develop the infrastructure necessary to store and analyze “big data”—that is, data sets too large to be handled by traditional database-management tools and software. The current Five Year Plan, which aims to stimulate “higher-quality growth,” names seven strategic “emerging industries,” including next-generation information technology.

Meanwhile, leading Chinese firms, especially Internet companies, have already begun to incorporate big data into their strategies. Jack Ma, founder and then-chief executive officer of China’s e-tail giant Alibaba, declared last fall that the company should focus on three pillars of future business: e-commerce, finance (providing loans to small and medium enterprises in China), and data mining. In January, Alibaba underwent a restructuring that, among other changes, created a data-platform division with about 800 employees, as reported in the Chinese financial magazine, Caixin. The Alibaba Group has just begun to scratch the surface of analyzing the reams of user data generated through its business-to-business e-commerce site and its massive consumer-to-consumer platform, Taobao.com.

Professor Su warned, however, that the hype around big data in China may be a case of too much, too soon: “If everyone is talking about something, there is probably already a bubble,” at least of expectations, he said. “Most Chinese companies don’t own enough data, let alone know how to utilize, analyze, or monetize their data.” In other words, a select number of companies in China that do own large quantities of user-generated data—such as Alibaba and Baidu (BIDU)—hold the cards and may profitably sell that valuable information to other vendors.”

via In China, Big Data Is Becoming Big Business – Businessweek.

Posted in China alert, Consumer, Economics, Technology | Leave a Comment »

Tags: , , , , , , , , , ,
06/05/2013

* Chinese buyers lured by local goods

China Daily: “Foreign brands no longer top choice for Chinese customers, says survey

Buyers lured by local goods

Chinese customers are no longer swayed by the lure of foreign brands and would instead prefer to buy more brands that are made in China, a survey said.

According to the 2013 China customers’ loyalty study conducted by marketing research firm Epsilon, six out of the 10 Chinese respondents endorsed foreign brands. However, there is a growing preference to buy products that are made in China. Local-brand supporters have grown to 43 percent from 31 percent in 2011, the report said.

Such trends are already visible in the Chinese fashion industry. In March, China’s first lady Peng Liyuan sparked off a craze for Chinese brands after dressing up in Chinese-made apparel for diplomatic visits.

Her elegant dressing code was dubbed by netizens as “Liyuan style”. Analysts argued that Peng’s support for domestic labels had stirred interest in local products and also helped attach a new, sophisticated image to Chinese-made clothes.

“Since local brands started to improve quality, establish appeal and step up their sophistication, they have garnered a bigger share from Chinese shoppers,” said Viven Deng, client services director of Epsilon China.

Chinese brands have started to win hearts not only from buyers pursuing extensive product features, but also from picky local consumers who previously stuck to foreign labels, she added.

Qi Lulu, a Beijing college student, who used to be a customer of leading international clothing brands such as Burberry and Polo Ralph Lauren, said she now focuses more on local brands.

“I buy dresses online, and I have found some domestic brands that have exquisite taste,” the 22-year-old woman said. Recently, Qi fell in love with a Beijing brand called Liebo, which featured traditional Chinese flavors and colorful patterns.

Self-branded products from other industries, such as cars and consumer electronics, are also growing in popularity. More Chinese people said they would support Chinese-made cars, especially after the Diaoyu Island dispute between China and Japan. Currently, Japan is still the major car vendor in the Chinese car market.

With a more than 1.1 billion mobile population in hand, China has grown into the world’s biggest smartphone market. The country manufactured the most number of smart devices, 224 million units, across the world last year.

Four out of the top five smartphone vendors in the Chinese market are domestic brands, with the South Korea-based Samsung Electronics Co the only international player in the list.

Huawei Technologies Co and ZTE Corp even successfully ranked as the world’s third and fifth smartphone manufacturer in the fourth quarter last year, according to research firm IDC Corp.”

via Buyers lured by local goods[1]|chinadaily.com.cn.

Posted in Affluence, China alert, Chinese labels, Consumer, Economics | Leave a Comment »

Tags: , , , , , , , , ,
03/05/2013

* Credit-Card Companies Battle in China

BusinessWeek: “The Ms. Magic credit card from China Citic Bank (601998) is dotted with Swarovski crystals and offers free beauty treatments and health insurance. Huaxia Bank’s (600015) Pretty Lady card, co-issued with Deutsche Bank (DB), entices women with triple points for cosmetic purchases and fitness club memberships. Citigroup (C), which last year became the first U.S. bank allowed to issue its own solo logo cards in China, offers to waive its first-year annual fee of 300 yuan ($49) for Rewards cardholders applying before March or spending more than 20,000 yuan by the end of December.

Credit-Card Companies Battle in China

They’re all part of a battle for affluent consumers in the world’s fastest-growing market for plastic, even as delinquencies have tripled in the past five years and profits remain elusive. “Credit cards are the ultimate growth area and also the battlefield for banks in China,” says Rainy Yuan, an analyst in Shanghai for Taipei-based Masterlink Securities. “Some may never earn a profit out of it, but they have to join the fight, as that’s the most efficient way of grabbing deposits and cross-selling other financial services.”

With interest rates fixed by the government at 18 percent annually, China’s banks can’t compete by lowering rates, so they differentiate themselves by offering merchant discounts and gifts, including Coach (COH) wallets, Hugo Boss (BOSS) quilts, and free Starbucks (SBUX) upgrades to a larger coffee. Chen Junjun, a marketing manager at China Guangfa Bank, spends 10 hours a day, seven days a week trying to lure customers to his roofless booth outside a subway station in Shanghai’s Pudong district. Among the gifts he offers: a wireless mouse, storage boxes, and coffee mugs. “No annual fees, buy-one-get-one-free for Starbucks coffee, and you get a free Coach wallet, too,” Chen says to a female passerby. “If you have a job, you are qualified. If you have a credit card, you are qualified.””

via Credit-Card Companies Battle in China – Businessweek.

Posted in Affluence, China alert, Consumer, Economics | Leave a Comment »

Tags: , , , , , , , ,
19/04/2013

* China’s 2020 consumer is in a town you’ve never heard of

Reuters: “Wearing a floral brocade cardigan and toting a Huawei smartphone, Guo Qian, 22, gushes over her latest purchases on Taobao, China’s largest e-commerce platform. As an administrative worker, Guo makes only 3,000 yuan a month and spends most of it.

Customers selects hats at a street stall at the business area of Jiaozuo, China's central Henan province, December 20, 2012. REUTERS-Aly Song

Not only does she spend nearly all of her own money, Guo also fritters away most of her father’s 1,000 yuan monthly pension on trinkets and clothes on Taobao. “Sometimes I feel guilty using his money, so I buy him some clothes.”

Guo, a Zhengzhou native, already owns an apartment – her parents helped finance the purchase last year – and is on the upward climb to join China’s burgeoning middle class.

As Beijing tries to engineer a crucial macroeconomic shift– toward more consumption and less investment, the crucial “rebalancing” China’s new leadership is committed to, and the rest of the world is counting on — it is young consumers like Guo Qian who may hold the key to the transition.

Raised in an era of unprecedented prosperity, Guo, like many other members of what is known as the `post-80s’ generation (anyone born after 1980) has a very different answer than her parents when it comes to a central economic question: whether to spend the money she has, or save it?

“I don’t save at all,” she told Reuters. ” Why should I?”

Her “spend it if you’ve got it” attitude, some economists argue, may help unlock the surge in consumption that China urgently needs to rebalance its economy over the next decade, ending an era of lopsided, investment driven growth.

“This 18-35 group, for a variety of reasons, are much more optimistic and more open to risk, because they haven’t yet experienced bad times at all,” says Benjamin Cavender associate principal analyst with China Market Research. “They tend to have high disposable income relative to their earning power, and they tend not to be saving heavily.”

This generational change in mindset, harnessed to the sheer number of people growing more prosperous in once poor provinces throughout the country – such as Guo’s native Henan – is recasting China’s economic landscape: both the composition of growth, and its geography, are about to change significantly.”

via Insight: China’s 2020 consumer is in a town you’ve never heard of | Reuters.

Related articles

Posted in Affluence, China alert, Consumer, eCommerce, Economics, Salaries | Leave a Comment »

Tags: , , , ,
06/02/2013

* China OKs sweeping tax reforms to tackle inequality

First the talking – now the walking.

Reuters: “China unveiled sweeping tax reforms on Tuesday to make wealthy state-owned firms, property speculators and the rich pay more to narrow a yawning gap between an urban elite and hundreds of millions of rural poor.

A family arrives at Beijing West Railway Station February 5, 2013. REUTERS/Jason Lee

The plans approved by the State Council – China’s cabinet – also included commitments to push forward market-oriented interest rate reforms to give savers a better return and more security.

Chief among the reforms is a requirement to raise the percentage of profits contributed by state-owned firms to the government by about 5 percentage points by 2015.

Together with measures to raise wages and improve households’ return on assets, the reforms signal an attempt to shift economic growth towards increased consumption and away from the current reliance on investment spending.

“The State Council is not just talking about the gap between rich and poor, they’re talking about the whole economy and how income is distributed among various actors – the households, the corporations and the government,” said Andrew Batson, research director of GK Dragonomics, an economic consultancy in Beijing.

“It’s about changing the entire flow of income around the national economy.””

via China OKs sweeping tax reforms to tackle inequality | Reuters.

See also: https://chindia-alert.org/2012/12/10/china-wealth-gap-continues-to-widen-survey-finds/

Posted in China alert, Consumer, Economics, Good news, income-wealth gap, Inequalities | Leave a Comment »

Tags: , , , , , , ,
02/02/2013

* Earl Grey descendants sell English tea to China

Taking coal to Newcastle and tea to China!

Reuters: “An estate owned by descendants of the 19th century British aristocrat for whom Earl Grey tea was named is turning history on its head by selling English tea to China.

Wesley Goldsworthy picks tea leaves at the Tregothnan Estate near Truro in Cornwall January 14, 2013. REUTERS-Stefan Wermuth

The Tregothnan estate in the southwestern English county of Cornwall started selling tea from its tiny plantation in 2005 and last year produced about 10 metric tons (11.023 tons) of tea and infusions.

Although a drop in the ocean of global tea production, which the UK Tea Council estimated to be about 4.3 million metric tons, Tregothnan has found a niche for its products by trading on England’s historical reputation as a nation of tea-lovers.

“It’s unique. There’s no one else who’s growing tea in England and putting English tea on the market,” owner Evelyn Boscawen told Reuters.

The long history of immersing tea leaves in hot water for a refreshing drink is not lost on the son of the current Viscount Falmouth and a descendant of British Prime Minister Charles Grey, for whom the bergamot-flavored Earl Grey tea is named and whose Reform Act of 1832 sowed the seeds of modern parliamentary democracy and universal suffrage in Britain.

Chinese tea has been coming to Britain since the East India Company first imported it in the 17th century for consumption by wealthy aristocrats.

By the Victorian era, taking tea had become a regular ritual at almost every level of society from elaborate afternoon tea for the rich in country houses to tea and gruel for the working poor as depicted by author Charles Dickens.

But the Boscawens at Tregothnan are bucking the historic trend of tea flowing from East to West by beginning to export some of their wares to China and elsewhere.

“We do see China as an opportunity at the moment,” Boscawen said. “The Chinese are great lovers of buying exotic things from all over the world. Even if it might have come from China (originally).”

Tea, native to Asia, is not traditionally grown in Britain but can be cultivated outdoors at Tregothnan, which is situated in England’s southwest and benefits from an unusual microclimate similar to that of Darjeeling in India.

Less similar to India is the tiny scale of production at Tregothnan, which might be large enough to be considered a small Darjeeling tea garden, the English estate’s commercial and garden director Jonathan Jones said.

“We went into this right from the outset as being able to put the English into English tea,” Jones said. “We weren’t ever looking at being the new India or China, that’s ridiculous.””

via Earl Grey descendants sell English tea to China | Reuters.

See also: For all the Tea in China by Sarah Rose: the smuggling of and transplanting tea from China into India took several years to effect though eventually, British tastes turned to Indian tea in preference to Chinese tea.

 

Related articles

Posted in China alert, Consumer, Economics, India alert | Leave a Comment »

Tags: , , , , , , ,
02/02/2013

* Coming of age: China’s used car market outpaces new sales growth

This also means that tyre companies will be selling tyres to replace the original sets.  Invest in rubber company shares!

Reuters: “Used car sales in China grew faster than new car sales for a second straight year in 2012, and should account for half of all sales within seven years as the world’s biggest autos market matures.

People select automobiles at a second-hand market in Shenyang, Liaoning province December 10, 2011. REUTERS/Sheng Li

While new cars still outsold used vehicles by more than 3 to 1 last year, they are sputtering after a period of breakneck growth, and the potential for the pre-owned market to be the industry’s growth engine is prompting foreign automakers to open more used-car outlets.

A key target for them are buyers like Jiang Meng, a 32-year-old office worker in the southeastern city of Guangzhou, who this month went shopping for a sport utility vehicle, and hadn’t considered a second-hand car until she came across a used car dealer run by Nissan Motor Co’s (7201.T) local joint venture.

“I wanted an SUV, but I wasn’t sure of getting a used one until I stepped into the store. There are so many models and they offer a warranty,” said Jiang, who traded in her 2-year-old Nissan Tiida sedan for a 4-year old silver Qashqai. The deal cost her 25,000 yuan ($4,000). A new Qashqai is priced at around 189,000 yuan.

“The car was very clean inside and outside and it drives very well. Many of my friends thought it’s new,” she said.”

via Coming of age: China’s used car market outpaces new sales growth | Reuters.

Related articles

Posted in China alert, Consumer, Economics, Transport | 2 Comments »

Tags: , , , , , , , , , ,
21/01/2013

* India Agency Clears IKEA’s Investment Proposal

Another step forward in liberalisation.

WSJ: “India’s foreign investment promotion agency has cleared Swedish furniture giant IKEA Group’s proposal to invest nearly $2.0 billion for setting up wholly owned retail stores in the country, Economic Affairs Secretary Arvind Mayaram said Monday.

Mr. Mayaram is also the head of the Foreign investment Promotion Board, the agency which clears foreign direct investments in India.

A spokeswoman for IKEA didn’t immediately comment.

The board had cleared the retail giant’s proposal in November subject to certain conditions. However, IKEA wasn’t happy with the conditions, which prevented it from selling products that it doesn’t brand, including secondhand furniture, textile goods, toys, books and consumer electronics as well as food and beverage items in cafeterias within its stores.

It thereafter wrote to the Indian government, seeking the removal of these conditions.

“Now, the proposal has been cleared in its entirety,” said another official, who didn’t want to be named.

IKEA now needs the approval of the federal cabinet to set up its outlets in India.”

via India Agency Clears IKEA’s Investment Proposal – WSJ.com.

Posted in Consumer, Economics, FDI, Import, India alert, Politics, Retail, Trade | Leave a Comment »

Tags: , , , ,
« Older Entries  |   Newer Entries »
CCChang

Law of Unintended Consequences

continuously updated blog about China & India

ChiaHou's Book Reviews

continuously updated blog about China & India

What's wrong with the world; and its economy

continuously updated blog about China & India