Consumer habits converging in China

06 September 2010

BEIJING: Consumer behaviour in rural and urban China is starting to converge - a trend that covers spending habits, media usage and overall preferences.

Synovate, the research firm, surveyed 32,922 adults, and found rising wealth means greater numbers of people are "striving toward a metropolitan lifestyle".

More specifically, it argued attitudes and expenditure patterns in lower-tier and rural areas now seem closer to those in Beijing, Guangzhou and Shanghai.

For example, the average annual outlay on apparel in Tier 5 towns and villages stands at 3,600 yuan, measured against 3,900 yuan in both Tier 1 and Tier 3, and 3,300 yuan in Tier 2.

Similarly, health and fitness attracts 2,700 yuan a year from Tier 5 shoppers, only 300 yuan under the total delivered by China's biggest cities.

Out-of-home dining is particularly popular among top-tier residents, who typically invest 4,300 yuan in this activity every 12 months, declining to 2,600 yuan in the next rung of markets.

This fell below Tier 3 on 3,700 yuan, with Tier 4 on 3,300 yuan and Tier 5 on 2,900 yuan, according to Synovate.

Nutritional supplements secured the second-highest spend in Tier 1 on 4,100 yuan, pulled in 3,800 yuan in Tier 3, 3,500 yuan in Tier Five, while Tier 2 and Tier 4 hovered around the 3,000 yuan mark.

Entertainment registered stronger consistency, posting returns of 3,900 yuan from premier and third level regions, alongside 3,200 yuan apiece in the fourth and fifth layers and 2,700 yuan in Tier 2.

Elsewhere, 77% of respondents in cities like Shanghai and Shenzhen, and 80% of their peers in the smallest areas assessed, "usually think about the needs of their family members when buying things".

Age also plays a unifying role, with people born in the 1950s and 1960s a "very price sensitive" group focusing on reliability, according to Jessica Liu, media research director, Synovate China.

"However, the generations born in the 1980s and 1990s have been immersed in the market economy, and have enjoyed material resources," she added.

"They prefer famous brands, are willing to pay extra for high-quality goods, and are proud to show their unique styles."

Regarding broader lifestyle choices, 82% of the panel stated family is more important than their career, a figure that reached 81% in Tier 5.

Many participants liked relaxing at home, and 74% of the sample in the top two tiers favouring activities such as watching TV and listening to the radio, increasing to 76% in Tier 5.

Turning to the web, consumers born in the 1990s and living in Tier 1 now dedicate 40% more time to surfing the net than 12 months ago.

This acceleration climbed to 43% among their Tier 5 counterparts and 51% in the countryside.

"Internet, mobile for talking and mobile for non-talking activities dominate the market, especially for younger generations, who spend more time on them than on mainstream media," said Steve Garton, executive director of media at Synovate.

Data sourced from Synovate; additional content by Warc staff