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Chinese Consumer Confidence Enters “New Normal”

Online Shopping Trends in Rural Markets Drive Consumption Culture

Consumption Economy Emerges in the East: Quality of Life Purchases

Beijing  – Aug. 5, 2015 – Chinese Consumer Confidence indexed at 107 according to a new study by Nielsen. Personal finance and willingness to spend, both components of the consumer confidence index, rose by one percentage point to 65% and five percent to 49% respectively, demonstrating an increased consumer perception in their own purchasing power. Notably, however, expectations on employment decreased for a third quarter in a row by three points to 66%.

“With a change of only one percent in consumer confidence, we’re seeing a ’New Normal’ in Chinese consumer sentiment,” said Oliver Rust, Managing Director, Nielsen China. “Early evidence of two long term trends emerges in the Q2 2015 Consumer Confidence Index for mainland China. The advent of better logistics and e- commerce are driving higher consumption and willingness to spend in rural markets.  This is a key insight for technology providers, manufacturers and retailers.  Second, the East is leading the transformation of China’s new consumption driven economy.  Consumers in Eastern China are more confident and are increasingly purchasing better quality of life goods and services.”

As in the past seven quarters, China’s Eastern region displayed the highest confidence index with 117 points (+2 points). The Southern region was next (110, +3 points) and then the Northern region (104, -1). The Western region experienced a relative lower consumer confidence index (96, -1), but kept a relative stable level after a sharp drop from Q4 2014.          

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.

Rural Consumption Knocks on City Doors

While the Consumer Confidence Index for Tier 1 cities decreased by 1 point, the CCI for Tier 2, 3, and 4 cities remained steady.  The continued decrease of consumer confidence in Tier 1 cities (-5 last quarter) paints a picture of the shifting Chinese consumer landscape, making space for more lower city tier and in particular rural consumption to grow, where consumer confidence has increased by two index points.

The growth in consumer confidence in rural China is driven by a remarkable increase in willingness to spend, rising by 10 percentage points to 47% from 35%-37% in past quarters. Expectation on employment, consistent with an overall decreased perception on the availability of employment opportunities in China, decreased by three percentage points.

Nevertheless, this 10 points increase in rural willingness to spend is now an important factor in driving future consumption growth in China. When consumers were asked why they believed it was the time to purchase what they needed, 25% of rural consumers cited ‘convenience of shopping’ as a reason, placing convenience well above any other factor in driving rural consumption. Particularly, rural consumers illustrated the importance of online shopping trends in driving convenient shopping.

Around 83% of rural consumers deemed online shopping would bring about convenience, and 70% believed online shopping could help them purchase products that were hard to find. For rural consumers who used to very limited access to products only available in retail stores/hypermarkets in higher-tier cities, e-commerce acts as an indispensable medium to connect with the wider personal goods market.

Backed by agreements between manufacturing companies and local governments to cooperate for better product variety and accessibility, as well as a more robust express delivery system, e-retailers have penetrated 19% of the rural population with online shopping services. Though this figure is almost half the national average (at 42%), rural online shopping spending growth is markedly higher at 64%, as opposed to the national average of 53%.   Maternal and Baby Care products, Personal Cosmetics, and Tourism, Virtual Service products are in particularly ranked higher penetration in rural online shoppers vs. that for higher city tier shoppers.   We believe it was mainly driven by the higher product assortment availability online for rural consumers today.  This brings huge opportunities for both manufactures and retailers.

East China Leads Into a New Consumption Economy

Recovering from the decline of last quarter, the Consumer Confidence Index in East China has risen up to 117 points, continuing its streak as the most confident area in China for another quarter in a row. Meanwhile, South China’s index has also recovered by three points, but still lags far behind the East by seven points overall in consumer confidence. The consistently increasing confidence and willingness to spend in East China is indicative of a more consumption-based economy and China’s migration away from relying on exports/imports for GDP growth.   The logistic advancement and fast digital revolution progress made East regions leading the transformation for both macro economy and consumer life style and behavior changes.

Data tracing online FMCG shopping behaviour agrees – the percentage of people purchasing from online to replace major offline spending is highest in East China at 35%, and likewise, the percentage of people purchasing regularly (more than 2 times per month) online in the past three months are rocketed to 25% in the East. Not only is East China driving forward consumption, its becoming increasingly digitalized in its path to doing so.

When it comes to what exactly Eastern consumers purchase, Nielsen reports an emphasis on day-to-day, life quality improvements and personal indulgent goods. Eastern consumers were by far more willing to increase expenditure for dining out (59%), apparel & clothes (53%), personal digital devices (51%), Food & Beverage (50%), and Home appliance (27%). Noticeably, in the South region where consumer confidence in surveyed to be the second highest, consumers willing to pay more for their children’s education were much higher at 37% than that of Eastern consumers (30%), a trend followed by other regions of China as well.

While the East is spearheading China’s shift into a consumption-based economy, its consumer spending is more rooted in satisfying personal desires/needs – a wave of consumption that, in correspondence with the onslaught of convenient, pervasive e-retailer influence, could propel China into an abundance of potential consumer growth.


The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005. This Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted Nov. 10-28, 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. These three countries were added to Nielsen’s measurement of consumer confidence in the first quarter of 2014 using a mobile survey methodology, which differs from the online methodology used to report consumer confidence and spending intentions for the other 60 countries outlined in this report. As such, the three sub-Saharan African markets are not included in the global or Middle East/Africa averages discussed throughout this report.


Nielsen N.V. (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers Watch and Buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services across all devices where content—video, audio and text—is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen provides its clients with both world-class measurement as well as analytics that help improve performance.  Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90% of the world’s population. For more information, visit


Andrew McCaskill +862123269384