China CCI registered steady growth of 112 points, compared with 106 points in 2016. In 2017, both job prospects (jumping from 62 to 70 year-on-year) and personal finance (climbing from 61 to 69 year-on-year) rose by 8 points. The willingness to spend increased by 5 points to 57. All these three components reached the highest level since 2015.
Following three consecutive quarterly rises, China Consumer Confidence Index continued strong run in the fourth quarter, reaching historic high of 114 points. The figure grew six points from 108 in the same period a year earlier. According to Nielsen reports, China CCI showed solid expansion in 2017, ranging between 110 and 114 points – a relatively high level. It indicates Chinese consumers’ strong confidence, optimistic and positive attitude in the past year.
"Led by the new development concept, China's economy has been shifting from a growth model driven by large volume to a model fueled by quality and efficiency. It entered a new stage of ‘steady growth with improved quality’,” said Vishal Bali, Managing Director of Nielsen China.
“At the same time, thanks to the supply-side structural reforms, innovation-driven development strategy has been deeply implemented. The country is accelerating the pace into a stage feathering mid-to-high level (of growth), and continuously injecting new vitality to the healthy and sustainable development of economy.”
Overall, China CCI reached 112 points in the whole year of 2017, compared with 106 in 2016. Economic expansion exceeded the government's full-year target in 2017, as growth accelerated for the first time in seven years. GDP surpassed 82 trillion yuan in the past year, according to National Bureau of Statistics. It indicated that economic growth stabilizes, which could be attributed to the government's supply-side structural reforms. It marked that the country's economy has entered a new stage.
Bali said: "As economy stabilizes, China CCI will remain steady growth in foreseeable future."
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.
Three components grow steadily, led by the willningess to spend
Job prospects, personal finance, and the willingness to spend maintained stable growth in the fourth quarter 2017, reaching the highest since 2015, show data compile by Nielsen. The willingness to spend jumped from 58 in the third quarter to 61 this quarter. Job prospects increased by 2 points quarter-on-quarter to 74. Personal finance stood at 70 points in the fourth quarter, similar to that of last quarter.
“For the past four years, China's domestic consumption has become a leading force driving economic growth thanks to government efforts to restructure the economy,” Bali said. “Holiday effect of shopping festival Double Eleven and Chinese New Year in February further shores up consumer buying desire and catalyzes the consuming market.”
By city, CCI in the fourth-tier cities jumped from 108 points in the third quarter to 111 points in the fourth quarter. In the whole year, the index of all tiers of cities increased. That was driven by non-first-tier cities, with the fastest growth in rural areas from 104 to 113. The second-tier cities (rising from 109 to 114 points) and third-tier cities (increasing from 108 to 113) followed the trend. First-tier cities (from 113 to 116) and fourth-tier cities (from 108 to 111) rose slightly.
By region, CCI in the east and south, respectively, registered strong expansion. In the east, the index grew by three points quarter-on-quarter to 125 in the fourth quarter, with the willingness to spend climbing rapidly (from 65 to 70). In the south, the index increased from 115 to 117, thanks to all three components’ growth. CCI in the west part of China was 108 in the fourth quarter, with job prospects soaring by 4 points to 70. CCI in the north was steady.
Bali said: “The country’s new pattern of regional economic development was boosted, as effects of strategies like the Belt and Road Initiative, Yangtze River Economic Belt and Beijing-Tianjin-Hebei Coordinated Development unfolded. Regional reforms including the development of western region, the revitalization of old industrial bases in the northeast, the rise of the central region, also contributed to the new economic pattern.”
China’s urbanization expedite, “fast pace” become mainstream
As technological upgrading advances and high-quality economic expansion progresses, urban development, retail environment and consumer demand in China are all delivering rapid growth.
Nielsen's report shows 96% of Chinese consumers are more willing to pay via mobile phones. In the meantime, new concept of retailing is quickly accepted in China. Forty-five percent of the manufacturers hold the view that new retail will have a profound impact on the retail business. Forty-eight percent of them think the new retail will affect the retail industry to a certain extent.
Market volume and sales of new products shows outstanding performance. Nielsen data show that, in recent ten years, innovation fueled 60% of China's FMCG industry.
"The 19th National Congress of the Communist Party of China set the overall goal to give priority to urban agglomeration while balance regional development, and focus on revitalizing rural areas,” Bali said. “China’s urbanization development has entered a new normal stage.”
Consumers perfer traveling and dining slowly
Nielsen data show a steady growth in FMCG industry. In the fourth quarter last year, the sector’s growth rate stood at 15%, the highest level since the past two years. As Chinese consumers speed up the pace of living and consuming, they are more willing to spend more on dining (37%) and on vacation (33%).
In a fast-pace life, consumers’ willingness to travel continues to rise. A growing number of consumers prefer slowing down while traveling. According to Nielsen, 66 percent of the surveyed travel for sightseeing, 55 percent prefer to do relaxing activities, 47 percent travel for companionship, 47 percent travel for acquiring knowledge, 46 percent for food, and 35 percent for shopping. Overall, consumers travel to slow down the pace of their life.
Enjoying Cuisine is also one of the choices that consumers made to "slow down." Not only do consumers express willingness to wait for food, but also enjoy their daily meals in a slowed manner. At the same time, they are keen on searching for information about search non-instant food information than instant food. Nielsen data show average price of spoonable yogurt was three times the average price of all types yogurt.
"Changes in lifestyle exert some impact on consumer behavior and habits. Consumers have come up with new requirements on tourism and food, thus contributing to the upgrading of these two sectors. When traveling, they pay more attention to the experience and comfort. In terms of food consumption, they are more willing to pay for healthy food," Bali said.
“Enterprises should get to know the changes in consumer demand quickly, grasp fresh opportunities, and create new growth space,” he added.