China’s consumer sentiment to weaken slightly this year
June 27, 2016 Category Retail, Weekly
China’s consumer sentiment will weaken slightly this year, but wealthy households and young people will be a strong source of spending. Three-quarters of consumers said they would maintain or increase their spending compared to last year’s levels, down from 81% in 2015, according to the Boston Consulting Group in its survey of 3,500 people. “Even as sentiment moderates a bit, it is important to note that we are looking at a slowdown in consumption growth,” said partner Jeff Walters. “Consumption in 2016 will be tantamount to consumers’ moving from the fast lane to the middle lane on the economic highway. They are not pulling into the breakdown lane.” More than 40% of urban households have monthly incomes exceeding CNY8,000, which puts them in China’s middle class. Household income growth declined to 8.7% in the first quarter, down from 9.4% a year earlier, amid the slowdown in the industrial sector, which employs the bulk of middle class workers. The number of families with a disposable monthly income of more than CNY12,000 is expected to double to about 100 million and account for 30% of the urban population by 2020. Their spending is expected to grow 17% this year. Most affluent consumers are employed in the high-end services sector, the South China Morning Post reports.
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