Rich Chinese set to spend

08 March 2011

BEIJING: Luxury goods manufacturers and foreign auto brands are set to enjoy rising demand among affluent Chinese consumers over the next six months, a survey has found.

Insights provider Prosper China questioned 19,402 people, breaking out data for respondents earning at least 100,000 yuan ($15,236; £9,352; €10,872) per annum, and found 59.5% of this audience were optimistic about the country's economic prospects during the first half of 2011.

This represents a decline on the 66.3% registered a year ago.

Elsewhere, 61.5% of the richest customers interviewed have recently become "more practical and realistic in my purchases", growing from 58.5% recorded 12 months earlier.

This compared with scores of 60.9% and 59.2% respectively for those boasting salaries falling between 60,000 yuan and 99,000 yuan, and totals of 60.7% and 59.2% covering the whole panel.

Over 40% of well-off contributors planned to buy a computer or invest in a holiday in the near future, although both these ratings contracted slightly from the last research round.

Digital cameras, jewellery, watches, homes appliances and furniture are the acquisitions that most appeal to high-earning shoppers, while TV sets, property, home improvements and DVD players lodged decreases.

Across the entire sample, jewellery, watches, furniture and stereo equipment posted modest upticks, but less than 20% of participants displayed an interest.

Every other category assessed witnessed year-on-year drops, indicating the impact of inflation in areas such as food and real estate on spending habits.

When discussing automotive preferences, 34.1% of those claiming a minimum 100,000 yuan a year hoped to buy a car in the next six months.

More specifically, 15% expressed a desire to be driving a new Audi, measured against 10% for BMW, 9.4% regarding Buick, 9.3% Volkswagen and 7% concerning Honda.

Audi retained top spot in all demographics, yielding a combined 10.5%, followed by Buick's 8.4%, Volkswagen's 8.1%, Chevrolet's 6.9% and Honda's 6.8%.

These figures thus suggest Volkswagen - which led the current ownership charts - may soon come under pressure from its fellow German marque.

FAW was the local brand holding the strongest allure for the most affluent, albeit securing just 3.9%, and rival BYD assumed the same position for the full survey population, logging 5.8%.

Turning to fashion, Prosper China revealed 67.3% of consumers viewed "familiar labels" as important, hitting 72.9% among the 60,000-99,000 yuan cluster, and 79.7% when considering their counterparts on 100,000 yuan a year.

Similarly, 46.6% of the latter group said sales had no influence on which clothes they bought, up from 43% a year ago, an amount reaching around 36% on average.

Meanwhile, 39.9% of the wealthiest segment gave fashion primacy over value and comfort, and 29.6% were interested in the latest trends and styles, substantially above the norm.

Approximately 70% of all respondents like to buy Chinese-made apparel, and foreign brands gained their best returns from the highest earners.

Of the richest customers, 29% held European products in particular esteem, 22.7% handed US alternatives an equivalent status, Korean goods were awarded 21.5%, and items with Japanese provenance generated 18%.

Data sourced from Prosper China; additional content by Warc staff