International brands have low influence over China’s emerging consumer market
Out-of-country brands in China have probably failed to favor the country, which is considered as the largest consumer market, as per the report made by Bain & Co. and Nielsen Holdings Plc.
Local companies manufacturing consumer goods such as retail products, personal care, or food and beverages are gradually taking away the market share from the foreign players. The growth graph of the foreign players reported 33.5% in 2006, which has now reduced to 30.2% as per Nielsen. Bain analyzed that foreign companies are majorly emphasizing on four categories out of 26.
It has been a known fact that Chinese consumers are more conscious about the brand origin than other countries. This was claimed by the Nielsen based on the survey of attitude conducted in 70 countries.
The consumers not only expect low prices but also demand high-quality products and the trend of consumer’s up-gradation is progressing rapidly, states Managing Director of Nielsen, Vishal Bali. China-based brands focus more on making healthy and natural products.
The drivers of the China’s economic expansion are the robust wage growth, ease of e-commerce, and stable economy. The consumption rate is increased to 77.2% in terms of economic expansion in Q1 from 64.6% in the previous year.
The population of China is digital savvy due to which the total consumption of the products in figures will add $1.8 Trillion in new demand rate by 2021.
Domestic companies are expected to stay longer on the track as consumers majorly choose foreign products in some limited categories such as personal care where quality is the only element to be valued. Chinese businesses are developing more inroads as they understand their customers better, who can make quicker decisions than international entities, and in better way, adapt to rapidly growing online sales, according to the report from Bain.
Constant advancement in the technology, which is well channelized and utilized in China, consumer adopting the modifications positively, and inclination on utilizing products made by domestic and local companies due to reliable and affordable characteristics are some of the major driving factors that have uphold the China consumer market.