I’ve been in China for over 25 years… and during that time I’ve seldom seen changes as rapid and severe as I have over the past two years.
The behavior of Chinese consumers has shifted RADICALLY. Every single aspect of their lives has changed, and their spending habits have quickly adapted in response (and not necessarily in the ways you might think.)
One change I’ve seen over the past year is the switch from extremely practical purchases (face masks, hand sanitizer, basic household necessities, etc.) to “revenge spending.”
Consumers are engaging in retaliatory consumption… they are buying things not because they NEED them, but because they want them and believe they’ll make them happier. A prime example would be new speakers for their home, new appliances, or fashion and beauty products
Now this doesn’t mean they’re blowing cash on designer labels and flashy purchases. On the contrary. I’ve noticed a “balancing” of consumer behavior that is moving both the spenders and the savers towards a more moderate position. It’s no longer desirable to flash the latest designer bag and logos don’t hold the sway they once did.
Instead, Chinese citizens are rebalancing their priorities between life and work, excess and moderation. They want to buy local products that are Chinese in origin and speak to who they are as people. There’s also a huge shift away from spending just to give the appearance of wealth, and moving towards purchases that are focused on experiences rather than things.
Will these changes be long-lasting? Only time will tell.
I want to know… how have your spending habits and preferences changed over the past couple of years?