Western brands popular among Chinese middle class

Along with the wellbeing of the Chinese people their brand awareness is increasing as well. This provides opportunities for conquering new markets to brand name products from the West. In particular manufacturers of niche products and niche brands are very popular among the Chinese middle class. In particular young Chinese people are keen on trying out new brands. In this context product quality plays a crucial role. This is the finding of a recent study by the Deloitte consulting firm called “Outfitting the new white collars” which deals with the consumption behaviour of the Chinese middle class.

In China young graduates have an income at their disposal which allows them to afford themselves a certain degree of luxury. This is due to the fact that salaries grow rapidly after a few years in a company and disposable income consists to a large extent of “inofficial” components which surpass nominal income significantly. Furthermore, there is quite a small saving rate in China which means that people spend a lot of money on consumption.

Young Chinese show much interest for niche brand name products which have so far not been very much known in China. Consumers with constantly growing disposable income like to discover new brands and combine image and exotic feeling which leads to the rise of a new brand name culture. More than 60% of young Chinese in the age bracket from 20 to 44 are ready to try out new brand names.

Brand names from the west are very popular in China and their quality plays a decisive role given that brands from the west have the image of being of a particularly high quality. Expectations of Chinese purchaser are very high. With regard to upper price segment products 70% of Chinese consumers attach importance to the fact that a brand name product be manufactured in the home country of the brand name.

Also important in this context is the growth rate of the Chinese target group for brand name products: economic growth in China led to the formation of a broad middle class in the cities and boom regions of this country. Young and skilled Chinese in particular in the service sector benefit from this development. In big cities the number of highly skilled Chinese professionals is continuously rising. It is expected that in Shanghai their number is going to increase from 3 million today to about 7.8 million in the year 2015.

In the course of the above study Chinese people were also asked about their annual average spending on clothing. About 30% of respondents said that they spend between 250 and 550 Euros, another 30% between 550 and 1150 Euro. This amount of money is enough to be spent also on brand name clothes, and in particular niche brand manufacturers from the west may profit from this and conquer a huge new market. A precondition for this are products which are of very high quality and which are sold e.g. through the popular multi brand stores.

The complete study in English is available for free-of-charge download. GERMAN