Where we see income opportunities as the Fed winds down stimulus
We share how we employ a flexible approach to tap into income opportunities.
What do China’s consumers want today?
Comfort, choice and convenience
Tech-savvy and young, a new generation of consumers in China are increasingly becoming the world’s consumer. And it’s no surprise that a ‘convenience economy’ has emerged to cater to the shift in consumption from needing the basics to wanting quality. Increasingly, Chinese consumers are spending their renminbi (RMB) into services that can provide quality choices, comfort and convenience to improve their overall consumption experience.
This shift in China’s consumer behaviour has also accelerated trends such as digitalisation and ‘premiumisation’, spurring companies to enhance innovation to meet consumers’ fast-changing needs1.
Sector contribution to China’s gross domestic product (GDP) growth2
What’s shaping a Chinese consumer’s shopping habits?
Consumers are supercharging e-commerce in China as everyday activities from banking, shopping for groceries and luxury goods, gaming, dating to travel bookings are now done on the many one-stop portals that have sprung up to support increasing demand.
These one-stop portals have also injected entertainment and gaming to expand a consumer’s overall shopping experience. This shift to online entertainment services, learning and gaming is also driving demand for ‘live’ streaming, educational and gaming platforms.
And with comfort and convenience, comes the pursue of quality in consumer choices. When it comes to quality choices, social media is a crucial tool that can help shape a Chinese consumer’s buying behaviour as opinions, product ratings and depictions of daily use of products and events are actively shared on mobile channels.
Chinese consumers are also seeking better quality and healthier options amid the global public health crisis, according to a recent McKinsey & Co. survey3. The majority of survey respondents said they will continue to spend more time and money purchasing safe and eco-friendly products and eat more healthily.
With many consumers remaining within China’s borders as new waves of infection are recurring across the globe, cross-border shopping portals offering quality and niche brands are gaining in popularity.
Additionally, personalisation is also gaining traction across Asia including China, boosting consumption offline as consumers look for personalised experiences in stores or limited editions of certain products4.
Supportive government policies such as the newly introduced offshore duty-free perks – with expanded spending quotas and categories5 covering electronics, raw honey, tea and liquor for Hainan island - have given the domestic retail and cross-provincial tourism a boost. Sales of duty-free products at Hainan rose 236% year-on-year to RMB45.5 billion, as of 31 May 2021, while the number of visits to duty-free shops there rose 144% to 8.77 million6.
Accessing long-term growth opportunities across Asia