McKinsey latest survey of Chinese consumers reveals significant change lurks beneath the surface.
Consumers are becoming more selective about where they spend their money, shifting from products to services and from mass to premium segments.
Reflecting 10,000 in-person interviews with people aged 18 to 56 across 44 cities, our 2016 China consumer report found that the days of broad-based market growth are coming to an end.
They are seeking a more balanced life where health, family, and experiences take priority. The popularity of international travel is astounding among Chinese consumers, as is their adoption of trends such as mobile payments. And despite many similarities, consumer behavior can vary significantly among the country’s 22 city clusters.
What they are buying
We found that consumers are generally becoming more selective about their spending. They are allocating more of their income to lifestyle services and experiences—over half plan to spend more on leisure and entertainment (the 50 percent surge in box-office receipts in the past year is just one indicator of that trend). At the same time, spending on food and beverages for home consumption is stagnating or even declining.
Chinese consumers are also increasingly trading up from mass products to premium products: we found that 50 percent now seek the best and most expensive offering, a significant increase over previous years.