The surprising shopping habits of China’s growing middle class

January 1, 2013

China's slowing economy is likely to stabilize in 2013, with consumer spending being the main category to drive growth, predicts the Economist.

That's probably welcome news to the Chinese government, which has been trying to boost domestic consumer spending for years amid weak demand for Chinese exports elsewhere in the world. Earlier this year, the Associated Press reported:

The Communist Party's latest five-year development plan calls for more than quadrupling annual e-commerce volume from 2010 levels to 18 trillion yuan ($2.9 trillion) by 2015.

Chinese people view marriage advertisements during a matchmaking party to mark Singles Day. EPA/WU HONG
Chinese people view marriage advertisements during a matchmaking party to mark Singles Day. EPA/WU HONG

If a new joint report on Chinese consumers is to be believed, consumers are eager to open their wallets.

Through surveys and social media analysis, business consultancies MEC and CIC highlighted 10 "trends" for consumers in China, most of which are typical of buyers in growing economies.

Consumers are spending more both on the very old and the very young, on leisure activities such as movies and on higher-quality products, the report concludes. Basically, they're becoming more like U.S. shoppers (okay, perhaps pre-recession U.S. shoppers), but with a distinctly Chinese twist. Here are some of the more revealing points:

1. Consumers are increasingly willing to pay for safety:

China has a dodgy record on food safety and product quality, but consumers are increasingly pushing back:

More and more people are buying insurance; they buy organic food albeit at a higher price; and posts on microblogs about road safety and food safety soared.

 

There's been a surge in tweets mentioning "food safety" and "transport safety," such as this one: "@ Hezheng 55234175 (Wuhan, Hubei): The only way of boosting local demand is to make sure local products are safe. Cut out the toxic milk and the swill oil retrieved from the gutters. Allow the public to consume safely, dare to consume and consume with greater confidence!"

Chinese buyers have also been increasingly purchasing car and property insurance, and a site urging people to throw toxic food "out the window" recently generated so much traffic it crashed.

2. "Foodie-ism" and other highbrow activities:

Chinese people gather at a gourmet festival to experience Taiwanese food in Beijing on July 12, 2011. ( STR/AFP/Getty Images)
Chinese people gather at a gourmet festival to experience Taiwanese food in Beijing on July 12, 2011. ( STR/AFP/Getty Images)

Outings like plays, concerts and movies are no longer just for the elites, as more and more Chinese flock to so-called "highbrow" cultural activities.

Since the end of 2011, Shanghai Grand Theatre has made the third Sunday of every month a discounted ticket day. The performances included in this scheme are diverse and cover many genres. The two rounds of discounted tickets for sale at the beginning of 2012 had seen long queues of people wanting to buy.

 

And where there's highbrow culture, there are also foodies, which the report notes are also on the rise in China:

Nowadays, the first reaction to a plate of delicious food is not to quickly put chopsticks to food, but to pull out the camera and take a scrumptious picture of the food and post it to Weibo.

3. Singles are spending more on being single:

In a holiday reminiscent of Valentine's Day, China has a "Singles' Day," complete with marketing offers, parades and the associated fanfare.  Begun by Chinese college students in the 1990s, Singles' Day has evolved into one of the busiest online shopping days of the year.

"This is very, very big for us," Steve Wang, vice president of the e-commerce platform Tmall.com told the AP.

There are also smartphone apps to help single people find and bond with each other. A service called WeChat, a location-based text-messaging system, was launched in January 2011, and by November the number of users topped 50 million. 

4. Shopping for nostalgia:

American hipsters aren't the only ones buying clothes that are cheap-looking yet expensive.

Old-fashioned products like "Warrior shoes," which were popular in the '80s before they began to be seen as "working class," are reportedly taking off again among young Chinese people, as are eateries graced with giant portraits of Mao.

In the past few years, discussions centered on the two keywords of “retro" and "nostalgia" on Sina and Tencent microblogs have seen continuous growth, and they sky-rocketed in 2012. Tweets on “retro” in particular grew from 2,784,040 to 22,588,671, a tenfold increase.

And as in the United States, upmarket consumption in China is tied to feelings of boundless upward mobility: In a different survey of thousands of consumers, the China Market Research Group found that pretty much everyone in China's middle class thought they would someday be rich.

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Olga Khazan | January 1, 2013