Mainland China’s Middle Class Warming to Suburban Shopping Venues

Mainland China’s Middle Class Warming to Suburban Shopping Venues

As incomes and transportation improve, mainland China’s middle-class is spending more of their shopping dollars in suburban commercial centers away from major urban centers, according to a new survey from the Honk Kong Trade Development Council.

The study is based on a survey that was conducted between December 2012 and January 2013 in eight mainland cities, namely Beijing, Shanghai, Guangzhou, Chengdu, Wuhan, Shenyang, Nanjing and Changzhou, where 1,600 consumers were interviewed by questionnaire and 10 consumer focus groups were held.
Although 67 percent of middle-class consumers still shop mainly at traditional commercial districts, 37 percent  agreed that “as transportation becomes more convenient, I am spending more time and money shopping in new commercial districts outside the city centre. A larger percentage of the younger respondents spend in new commercial districts outside the city centre. The main reason they gave for preferring to visit the new commercial districts is that these places have a better shopping environment and offer a wider range of leisure and entertainment facilities.
“Since middle-class consumers enjoy spending their leisure hours with family and friends, there should be ample market opportunities for recreation and specialty food restaurants that are suitable for such gatherings,” reads a synopsis of the study.
The major findings of the report include:
  • With the increase in private car ownership and the further development of inter-city transport, the middle class has formed the habit of travelling regularly. During the past year, 39 percent of the respondents had self-drive travel and 35 percent have travelled to other cities for holiday by high-speed rail. The frequency is on the rise.
  • The middle class is still as enthusiastic about international brand name products as ever. Eighty-one percent of respondents have bought international brands in the past year, while 37 percent have bought luxury products costing more than their monthly personal income. Among the different types of international brand name products purchased in the past year, garments rank first based on mention rates (74 percent), followed by footwear (57 percent), electronic products (41 percent), and handbags/wallets/luggage (40 percent).
  • There is an obvious increase in the frequency of buying organic products. In this connection, the proportion of respondents aged 36-45 buying organic products is comparatively higher, and so is the case with married people, while 76 percent of the respondents agree that “I am willing to pay more for green products”.
  • Among the middle class, there is noticeable growth in gatherings with relatives/friends and family activities. In the survey, 74 percent of the respondents agree that “I now spend more of my free time with family/friends”. In addition to entertaining at home and dining out, there are many more weekend excursions to the countryside. In terms of the frequency of consumption of services, “gatherings with friends” and “trying out new restaurants” are trending up.
  • Consumers are seeking more after branded products, and more people think that “branded products have better quality assurance”. People’s disdain for fakes is also growing. Among the respondents, 52 percent agree that “I prefer using well-known branded products even though they are more expensive”; while 54 percent agree that “I prefer using less well-known branded products to using counterfeited goods”.
  • Among branded products, middle-class consumers have a penchant for imported brands and joint-venture brands. Fifty-two percent of the respondents agree that “I prefer imported products to domestic products even though the price is higher” while 60 percent agree that “I prefer joint-venture products to domestic products even though both are produced on the mainland”.
  • The mainland middle class is paying more and more attention to quality (both for products and services) and consumers are increasingly sophisticated. Apart from turning to more expensive international brands, they are also showing more concern for “authenticity”, “quality of after-sale service” and factors such as the environment of shopping or service venue.