China’s economic woes rein in consumer spending

Two-thirds of Chinese consumers are concerned about their current financial situation and half are reining in non-essential spending, according to a new PwC report.

The 2023 Global Consumer Insights Survey China also finds that, for essential products and services, consumers are not trading down but are getting smarter in their purchasing habits and finding the cheapest ways to buy, whether that’s via WeChat groups, livestreaming deals or parallel imports.

Context

At 5.5% in the first half of 2023, China’s economy is still growing faster than most other countries; and the 67% of Chinese consumers who expressed financial worries is well below the global figure of 86%. But high youth unemployment (21.3% in June) and the ongoing real estate crisis have contributed to a lack of consumer confidence.

Why China’s economy matters

At a time when the government is attempting to encourage consumer spending, the report notes a shift towards more pragmatic and rational decision-making by consumers: impulse buys are far less likely and, alongside increased price consciousness, there’s now a greater focus on quality and value. 

Takeaways 

• 44% of Chinese consumers have cancelled online subscriptions (global: 39%).
• But 62% plan to increase spending on travel-related activities (global: 40%).
• Chinese consumers’ purchasing decisions are highly motivated by factors such as customisation, sustainability and transparency.
• They are also less likely than their global counterparts to resist paying increased prices for such attributes.

Sourced from PwC