As consumer confidence continues to hover at all-time lows, it’s clear that China’s consumption growth is experiencing a new normal of single-digit increases. And as we reach the mid-point of 2024, consumer marketers in China are expressing concern about how the remainder of the year will play out.
Marketers are closely monitoring key consumption indicators, and are seeking answers to a host of challenging questions that will help them recalibrate their strategies: Where are the pockets of growth? Which groups of consumers are more confident? What categories of products and services are growing, and which are flat or declining? What should we do to better attract and serve consumers in these growth categories?
To provide an additional fact base to help marketers answer these questions, McKinsey’s Consumer & Retail Practice in China conducted a comprehensive nationwide survey of nearly 12,000 Chinese consumers. Completed at the end of 2023, our survey segmented Chinese consumers into 108 distinct demographic groups based on city tier, age, household income, and other factors. We asked them about their confidence levels, purchasing intent, and a host of other questions that shed light on Chinese attitudes and behavior.
In this article, we highlight four key trends shaping consumer behavior and consumption in China:
— Trend 1: While consumer confidence remains low, we see promising signs of a
consumption recovery.
— Trend 2: Young consumers in lower-tier cities are still confident.
— Trend 3: Consumers are shifting purchases toward services and experiences.
— Trend 4: Mindset matters.
These trends illustrate a complex and evolving consumer landscape in China, where businesses must adopt a granular and targeted approach to cater to varying consumer needs and preferences. By understanding these key trends, companies can better navigate the challenges and seize the opportunities within the Chinese market.
