Changing habits of Chinese consumers may be pot of gold
The transformation of Chinese consumption habits is accelerating, with consumers poised to boost spending on leisure, entertainment and healthcare goods and services as they shift from basic material satisfaction to aspirational and personalized consumption, a new report said.
The report, released by CITIC Securities during the fifth China International Consumer Products Expo in Haikou, Hainan province, which concludes on Friday, said the digital economy and biotechnology are fueling new consumption trends in China and posing challenges to traditional consumption patterns.
China's super large market is unleashing enormous potential. Fueled by the country's ongoing consumption upgrade trend and the Healthy China 2030 initiative, a national guideline aimed at promoting overall health, the healthcare sector is undergoing unprecedented changes, and major foreign companies said they would continue to increase investments in China.
OSIM International Pte Ltd, a Singapore-based health products provider, accounts for the top market share in the massager market in Asia, and it has been participating in the consumer expo for five straight years. Sales have maintained growth in the past few years in China, its largest market globally.
The company said the operation of brick-and-mortar stores serves as its cornerstone. After the first edition of the consumer expo, it launched a store in Haikou, and this year, it plans to upgrade the store to the highest level that sells various kinds of high-end products.
Besides top-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen in Guangdong province, OSIM has seen rosy sales in Chinese cities such as Hangzhou, Zhejiang province; Chengdu, Sichuan province; and Suzhou, Jiangsu province, and its main consumer group is aged between 35 and 45.
"We have always had confidence and optimism in China, a highly diverse market. In China, an increasingly growing elderly population is paying more attention to healthcare," said Lily Yang, associate brand director of OSIM China.
"Besides, cervical spine discomfort is becoming a concern for many young people who have been busy with work, and they have indicated higher demand for massagers. A growing demand for sports assistive devices among sports enthusiasts has also become a key driving factor for the development of the massager market," Yang said.
Meanwhile, Charoen Pokphand Group or CP Group, a Thail international conglomerate with interests ranging from agriculture, food, finance to automobiles, pharmacies and manufacturing, has been a five-time participant of the expo. It has been a supporter and beneficiary of the event, and will continue to be deeply involved in the development of Hainan, it said.
The company has developed functional food for sleep aid and bone protection with its partner, and over the past three years, the average annual sales growth rate of such products has been 45 percent in China.
"Many Generation Z consumers (those born between 1995 and 2009) tend to stay up late while taking liver protection healthcare products. This phenomenon is a kind of precise demand for healthcare products consumption," said Zhang Shuhui, senior president of CP Group.
By 2030, the total market size of the health services sector in China is expected to reach 16 trillion yuan ($2.2 trillion), according to the projection by the National Health Commission.
"The application of synthetic biology in agriculture, food and beauty is worth paying attention to," said Jiang Ya, chief consumer industry analyst at CITIC Securities.
