According to Nielsen, China’s Consumer Confidence Index (CCI) reached 110 points in the first quarter of 2017, up two points from last quarter and the highest score since 2015. The current figure suggests that along with the stable growth of individual income, Chinese consumer confidence continues to rise.
Nielsen’s CCI in Q1 exemplifies the steady growth of China’s economy. According to National Bureau of Statistics data, GDP growth is 6.9% in Q1 of 2017, 0.1 percentage point higher than that of Q4 2016.
“China’s consumption upgrade trend has fueled people’s spending intentions. When people’s basic needs—food, clothing and transportation have been satisfied, the consumption upgrading will aim at high-end development and service upgrading and this trend will further stimulate spending intentions,”
“As the overall economy is shifting towards a consumption led model, we’re seeing that people are increasingly confident about their employment opportunities and personal financial situation. We are seeing this translate into a demand for premium products and services. Consumers are looking to make upgraded purchases, and brands should be looking to capitalize on this,” said Vishal Bali, Managing Director of Nielsen China.
Nielsen’s CCI measures perceptions of local job prospects, personal finance and immediate spending intentions. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.
The study shows that the increasing CCI is due to people’s optimistic perceptions of local job prospects, personal finances and immediate spending intentions. Nielsen’s report shows that personal finance grew to 66 from 62, perceptions of local job prospects to 55 from 53. Moreover, immediate spending intentions grew reached 55 from the previous level of 53, reaching its highest level since 2014.
Driven by growth from both online and offline, the overall FMCG industry growth in the first quarter reached a new high. Nielsen’s study found that total online sales value of 34 FMCG categories increased from 28% in the fourth quarter of last year to 31%, offline sales value great from 2% to 4%. At the same time, all offline channels experienced accelerated growth.
More and more people choose to shop FMCG products online. Statistics show that 92% of the respondents say their online shopping frequency will increase or maintain, and 93% of consumers will increase or maintain the amount of money spent online.
Nielsen also found that, no matter online or offline, brand is the most important factor in people’s shopping plan. 63% of online consumers and 78% offline consumers purchase branded products.
“The opportunity in both online and offline channels is still growing. We continue to see impressive double digit growth rates online as consumers are increasingly turning to e-Commerce for its convenience and wide selection. At the same time, offline retail still makes up over 80% of total sales value within the FMCG market, so it remains absolutely crucial for brands to optimize and execute an effective strategy within brick & mortar channels,” said Bali.
The consumer confidence index in western China experienced the largest increase in the four regions from 101 to 106 in the first quarter. CCI of both southern and western China increased 2 percentage points, reaching 113 and 102 respectively, while the eastern region was stable at 120, but it is still the top of the four regions.
Nielsen’s report found that all three indicators of CCI in west China increased in Q1, with the willingness to spend rising from 41 to 49, personal finance from 55 to 60, perceptions of local employment has risen one point to 69.