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28 Mar 2008
Shanghai
A recent Nielsen online study looking at the effect of ongoing price increases in China’s key cities Shanghai, Beijing and Guangzhou, has found that stock market punters aren’t daunted by fluctuations in stock prices and the impact of commodity price increases is more likely to keep people at home rather than change their grocery purchasing behavior to cut back on expenses,
Of the 70 percent of respondents currently investing in the stock market, over two thirds (70%) indicate that their spending is not influenced by movements in stock prices. Only four percent say they reduce their spending immediately if the market doesn’t move in their favor.
“Recent oil and food price hikes, however, have made a greater impression on Chinese consumer behavior,” said Mr Oliver Rust, Executive Director Nielsen China. “Of those interviewed, 61 percent indicated that recent price increases had affected how they spend and 52 percent had felt the effect of climbing oil prices,” Mr Rust continued.
Chinese consumers won’t be put off their food, though. When trying to reduce expenses, consumers are more likely to cut back on recreational activities (75%) and dining out (68%) than reduce the amount they spend on grocery items (31% across food and non-food items). Purchases on clothing and technology are also being put on hold, with 43 percent and 53 percent of respondents respectively saying they will reduce their spending in these areas if they are trying to manage their budgets.
Those shoppers not wanting to spend more on groceries could see their waistlines shrink as grocery prices climb. Of the 18 percent who look at reducing their grocery food bill when prices increase, over half (58%) will forgo snack foods; over a quarter (27%) will reduce their spending on biscuits, 41 percent on chocolate and 35 percent on carbonated soft drinks.
Shoppers not willing to cut back on food but still wanting to keep their grocery bill within budget (13%) will look at making their personal care products last longer. Personal wash and conditioner will be the first to be economized, with a third of respondents indicating they will cut down on personal wash and conditioner and a fifth will use less shampoo.
And higher prices won’t stop China’s experimental consumers trialing new products.
“What we are seeing is that the fast moving consumer goods market will be relatively untouched by price increases”, said Mr Rust. “In line with the majority of respondents saying that the contents of their shopping basket will remain unchanged despite price rises, over half also indicate that they will continue to trial new products. In fact, a quarter of respondents indicate they will trial more products, most likely due to price sensitive consumers starting to trial cheaper brands”.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing information, media information, online intelligence, mobile measurement, trade shows and business publications. The privately held company is active in more than 100 countries, with headquarters in Haarlem, the Netherlands, and New York, USA. For more information, please visit, www.nielsen.com
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