A new survey of 2000 consumers across 300 Chinese cities has revealed that more than half – 54% would “probably” or “definitely” stop buying US-branded products in the event of a trade war. Just 13% said they would not take action. However, a third of respondents - 33% - said they were either unsure or did not currently buy US-branded goods.
The survey was carried out by FT Confidential Research, a unit of the Financial Times, between June 27 and July 10. Part of US President Donald Trump’s proposed tariffs on Chinese exports to the United States, totaling around US$34 billion, kicked in on July 6.
According to the research, the Chinese consumers most likely to boycott US products were outside of Tier 1 cities and mostly on lower-middle incomes, which is likely to be a concern for many brands. China’s small cities and rural areas represent huge potential growth opportunities, aided by the growing popularity of e-commerce in smaller cities and rural areas.
Although the Chinese government and state media have been treading lightly when it comes to talk of a widespread consumer boycott of US goods, previous geo-political disagreements with South Korea and Japan have resulted in smaller-scale boycotts by Chinese consumers. In 2017, a boycott prompted by South Korea’s decision to install a US anti-missile system saw sales of Korean-made cars fall in China, alongside a $6.8 billion hit to the South Korean tourism industry as high-spending Chinese tourists steered clear. Japan and the Philippines have also been affected by Chinese consumer boycotts over political disputes in the past.
There is little to suggest that a widespread consumer boycott of US goods would be in the interests of China’s domestic economy however, as growth weakens. A report in the New York Times earlier this month noted that while China is a critical market for a number of iconic American brands, including Starbucks, Nike, General Motors and Apple the country is also a manufacturing hub for a number of American brands, including the production of iPhones and Chevrolet cars. Chinese workers would likely be affected by any action in that space, the story noted.
Sourced from FT Confidential Research, New York Times; additional content by WARC staff