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Sue Feng,, 010.5812.9195

Six super city clusters and 12 developed city centers are CRITICAL for the future of the Chinese economy

BEIJING, CHINA – Nov. 13, 2014 – Chinese consumer confidence held steady at 111 for the fourth consecutive quarter, which is one point higher than the third quarter last year. Meanwhile, global consumer confidence edged up one point to a score of 98. Nielsen is a leading provider of information and insights into what consumers watch and buy.

Worldwide, the index has been on a slow and steady rise for two-and-a-half years, since the first quarter of 2012. The past year witnessed a significant improvement in consumer confidence in the United States, from 98 in the third quarter 2013 to the current 108, while the index in Europe is gradually recovering from 74 in third quarter last year to the current 78.

In the third quarter of 2014, Chinese consumers’ perceptions about spending intentions and personal finances remain unchanged at 46% and 70%, respectively, from the previous quarter.  Meanwhile, Chinese consumers’ perception about job prospects increased 2 percentage points to 76%.

“While Chinese premier Li Keqiang emphasized that consumption has become an important growth engine for the Chinese economy, the positive outlook of consumers is essential to fully releasing their enormous spending potential,” said Patrick Dodd, Managing Director of Nielsen China. “As their wealth increases, Chinese consumers’ spending habits are switching from basic daily necessities to upgraded products and services. The key lies in how to better use products and services that cater to a more mature and demanding Chinese consumer.”

The Nielsen consumer confidence index measures perceptions of local job prospects, personal finances and immediate spending intentions. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.

Four Super City Clusters and 14 Developed City Centers to Level Up Chinese Consumption

Based on a review of GDP, population, retail sales, and latest modern trade development in over 2,000 cities and towns across China, Nielsen identified four super city clusters that are strategically important to drive China’s future economic growth. These super city clusters include Shanghai-Hangzhou-Nanjing, Beijing-Tianjin, Guangzhou-Shenzhen and Jinan-Qingdao.

”Analyzing city clusters instead of separate cities will give retailers and manufacturers a new understanding of the market,” said Dodd. “People travel frequently within these city clusters to work and shop. Retailers and manufacturers can synthesize the overall market size, preferential policies and logistic convenience of a city cluster and adjust the strategies to allocate resources more efficiently.”

Besides the super city clusters, Nielsen also identified another 12 first-tier developed city centres, and the other six second-tier developed city centres. Unlike the super city clusters that are mostly located in Eastern Coastal China, these developed city centres can be found in different regions across China, especially in the more central West and North of China.

Among more than 2000 cities and towns covered in Nielsen’s national city development index, retail sales in Central, West and North China grew rapidly over the past two years. “It means more and more people from less-developed markets now have access to a modern lifestyle,” said Dodd. “With the next wave of trading-up coming here in the near future, the comparatively complete retail network established today will take the consumption from these regions to an even higher level.”

According to Nielsen information, the consumer confidence index in the West region surged from 95 to 107 since the third-quarter of 2012. A similar rise occurred in the North as well; from 97 to 113.

Key Drivers behind Consumers’ Increasing Willingness to Spend Vary in Different Markets

Since the first quarter of 2014, the convergence of consumer confidence among city tiers or regions continues, according to Nielsen.

In the third quarter, Nielsen’s data shows that the range between maxim and minimum consumer confidence indexes across city tiers narrowed to only two points. Sorted by region, indexes from four regions are all in fall in a range between 107 and 113.

Behind this convergence, however, key drivers behind a rising willingness to spend can be very different among consumers from different regions and tier cities.

Nielsen’s survey shows that while consumers from Tier 3 cities are still highly influenced by price, with “seasonal discount”, “stable price” and “promotion” cited as the top three reasons for consumers’ willingness to spend (from 54% in the second quarter to the current 55%). Tier 2 consumers cited “financial status”, “convenience” and “promotion” as the top the reasons for spending — a 5 percentage-point boost from 49% to 54%.  

“In such a dynamic market as China, spending decisions really depend on the development status of consumers in different regions and areas,” said Dodd.

Similarly, though all regions are on a strong growth track in consumer confidence, the western and northern regions are very different in consumption patterns. Nielsen’s knowledge showed that consumers from the west are still at the taking-off stage when it comes to improving life quality. Overall year-on-year FMCG growth still enjoys a double digit growth (11%) in the west, compared to only 5% FMCG growth across China. Northern China shows modest growth in overall FMCG categories with a year-on-year growth rate of 6%. Consumers from the North are likely to spend more on products to improve life quality, with clothing (71%), dining out (70%) and telephone fees (66%) topping the categories where they will increase spending in the coming 12 months.

“For both manufacturers and retailers, the key to gaining a share of Chinese consumers’ wallets is a deep understanding of their subtle and fast-changing needs.  It’s then important to execute adjusted marketing and sales strategies regionally and locally to ensure the exciting new demand is met with the right supply at the right place and price,” said Dodd.

From Attitudes to Action: Health Products Enjoy Warm Welcome in Urban China

It is not the first time that health ranks as the No. 1 concern of urban Chinese consumers. The result of the latest third quarter survey showed that the percentage of consumers concerned with health (26%), was the highest for the second time after Q3 2013, exceeding income (21%) amongst all four city tiers. Relevant issues, such as health care (16%) and the environment (11%), also rank high on the list.

Almost half of the respondents claimed that they were pursuing a healthy lifestyle, including exercise and paying attention to health related information. Nielsen’s findings show that more and more Chinese consumers have translated their attitudes towards health into real action. According to the Nielsen survey, Chinese consumers attach great importance to health attributes in their snacking purchases. Their demand for snacks with the attributes such as, “no artificial color” (58%), “all natural” (54%), “no artificial flavour” (54%), GMO-free (53%) and organic (45%) are all above the global average.

Similarly, Nielsen’s retail tracking data shows that categories with health concepts outperformed other categories significantly with an annual growth rate of 15% in sales value in September 2014. This rate is three times the overall annual growth of food categories in total.


The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted Aug. 13 – Sept. 5, 2014 and polled more than 30,000 online consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America. The sample has quotas based on age and sex for each country based on its Internet users and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6%. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% Internet penetration or an online population of 10 million for survey inclusion. The China Consumer Confidence Index is compiled from a separate mixed methodology survey among 3,500 respondents in China. The sub-Saharan African countries in this study are compiled from a separate mobile methodology survey among 1,600 respondents in Ghana, Kenya and Nigeria. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.

About Nielsen
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA, and Diemen, the Netherlands. For more information, visit