- China consumer market is forecast to become the second largest in the world by 2015 with enough purchasing power to buy 14 per cent of the world’s products
- AmCham Shanghai/Booz & Company survey finds multinational and Chinese companies converging on key market segments – competition intensifying
London, June 13 2012 – The Chinese consumer marketplace is quickly maturing and becoming more segmented, with an increasing number of consumers in top tier cities demanding higher quality products—and willing to pay a premium for them. While at the same time, in smaller but rapidly expanding cities and rural areas where price still rules, the choice of available products has dramatically increased.
In stark contrast to last year’s results, both Chinese and multinational companies (MNCs) view the opportunities, challenges and trends in the China consumer marketplace similarly, which is leading to heightened competition for the same market segments. "There is no doubt that the Chinese marketplace is maturing," comments Joni Bessler, Director at Booz & Company, “The race is on to see who really captures this buyer segment."
These top trends, revealed in 2012 China Consumer Market Strategies, a report released today by The American Chamber of Commerce in Shanghai and global management consultancy Booz & Company, are driving an increasingly complex consumer market that is becoming more competitive for both Chinese and multinational companies.
“This year’s report highlights an increasingly mature and competitive consumer market in China, one which U.S. companies are fully committed to,” said Brenda Foster, president, AmCham Shanghai.
The second annual report, based on a survey of more than 150 Chinese and multinational companies, focused on nine disruptive consumer trends identified by AmCham Shanghai and Booz & Company. Companies were asked to rank the trends, how prepared they felt they were to respond to them and then to rate their top challenges to respond to the trends.
Key findings of the survey:
- Value as a differentiator: In large cities such as Shanghai, Beijing and Guangzhou more and more consumers are seeking greater value, quality and integrity in the products they purchase. A significant evolution from what has previously been a price-driven market.
- Increased choice is driving factor in smaller markets: Price remains the driver in cities such as Ningbo, Wuxi and Dongguan, but the choice of products has increased. Price points and purchasing channels are also in flux as companies battle to win over more fickle consumers, hoping to align their products and services with customer tastes.
- A convergence in approach: “This year’s survey found that in their strategic approach to the market, as well as in their responses to the challenges they face in product development, marketing and sales—domestic and international companies have converged,” said Brenda Foster, “This, in turn, has made an already competitive Chinese consumer market much more competitive.”
Click here to download the full report.