In 2024 the 11/11 singles day lost its luster – Shaun Rein

 

Shaun Rein

Business analyst Shaun Rein tells AP that the 11/11 singles day shopping bonanza has lost its previously sensational attraction. Even the shopping highlight has not been immune to the lackluster mood among China’s consumers.

AP:

Some experts say that Beijing’s recent stimulus measures have had little impact to boost consumer confidence.

“People are not interested in spending and are cutting back on big-ticket items,” said Shaun Rein, founder and managing director of China Market Research Group in Shanghai. “Since October 2022, the weak economy means that everything has been on discount year-round, 11.11 is not going to bring in more discounts that the month before.”

Rein said he expects low growth for the Singles’ Day shopping festival as consumers tighten their spending in anticipation of difficult economic times ahead.

Categories such as sportswear and fitness, however, have been doing well as customers “trade down a Gucci bag for Lululemon sportswear,” he said.

More at AP.

Shaun Rein is a speaker at the China Speakers Bureau. Would you like him at your meeting or conference? Contact us or fill out our speakers’ request form.

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Consumer spending down under economic pressure – Ashley Dudarenok

 

Ashley Dudarenok

China’s consumers spend less on luxury products, especially foreign brands, says marketing expert Ashley Dudarenok at the state-owned China Daily. Only domestic luxury brands are partly escaping that downward trend, she says.

China Daily:

Western luxury brands are particularly affected by these shifts. A recent survey of 2,000 Chinese consumers by Investment firm TD Cowen found that only 17% plan to increase their luxury spending, while 64% plan to spend more on travel. Many consumers are gravitating toward domestic brands or opting for more sustainable, personalized, and culturally relevant products.

“Chinese consumers are buying fewer luxury goods as economic challenges take a toll on spending,” Ashley Dudarenok, founder of the China digital marketing agency Alarice, tells Jing Daily. “There’s also been a noticeable shift in mindset, where flaunting luxury brands is now seen as shallow and disconnected from reality.”

Instead of focusing on brand logos, consumers are increasingly valuing outstanding product quality and unique style.

“While some ultra-high-end brands still benefit from their heritage and cultural significance, the overall trend is moving away from overt displays of brand loyalty,” Dudarenok says….

Rising youth unemployment and low consumer confidence are shaping the luxury market. Youth unemployment reached 18.8% in August and the Consumer Confidence Index dropped to 86 in July.

“As consumers grow more cautious about spending due to uncertainty around job security and income, luxury brands may struggle to maintain previous growth levels. Fewer first-time luxury buyers are entering the market, posing a long-term challenge to the sector’s growth prospects,” Dudarenok says.

While foreign brands face challenges in the market, Chinese luxury brands are gaining momentum.

“Domestic brands like Duanmu and Shang Xia are gaining traction by leveraging their understanding of Chinese culture and consumer preferences,” Dudarenok says. “Unlike foreign brands that often dominate the market, these local brands focus on products deeply rooted in Chinese traditions, such as those incorporating Traditional Chinese Medicine in cosmetics. This cultural alignment resonates with consumers, particularly as national pride grows among Chinese shoppers.”

More at the China Daily.

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China’s consumer confidence will rise again, but only in three to five years – Ben Cavender

 

Ben Cavender

Consumer confidence is at a low, says business analyst Ben Cavender. But the current crisis has offered Chinese brands to improve their international positioning, and they will rise as winners internationally when China’s job market is back in three to five years, he adds, in the Sydney Morning Herald.

The Sydney Morning Herald:

China grew 4.7 per cent in the second quarter of 2024, slower than the 5.1 per cent predicted by economists as nervous foreign investors pulled a record £12 billion out of the country over the same period, in blow to President Xi Jinping.Some fear the world’s factory is now in overdrive as shrinking profits force producers to ramp up output just to get enough cash to service their debts.

Prices across the economy were shrinking at the end of 2023 and have only just started rising again, climbing 0.5 per cent in July from a year ago. “I’m optimistic that in three to five years, the job market will recover and be thriving again,” she says.Ben Cavender, managing director at China Market Research Group says it is clear that Chinese consumers have been tightening their belts.“Consumer confidence is low right now, and if anything getting lower,” says Cavender, who is based in Pudong, near Shanghai.

“Chinese brands took advantage of Covid to become much better at brand positioning and marketing, and can be as competitive or more competitive than foreign brands now in a lot of categories,” says Cavender. The industry, which has fuelled the explosive credit growth in recent years, has enabled an easier flow of credit to small and medium enterprises.

International tensions are another worry. Donald Trump has already vowed to escalate its trade war with China if he returns to the White House next year, while Kamala Harris said this week that as president she would ensure “America, not China, wins the competition for the 21st century”. Fears about overcapacity are creating more trade tensions, with many countries including the UK worried about being flooded with cheap cars in order to meet net zero targets.

“But in terms of getting things done, they can never win against the Chinese. So they are basically deluding themselves. The issue is that they don’t want to accept that China is going to be the largest economy.”

More in the Sydney Morning Herald.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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Revenge saving key trend among China’s youth – Shaun Rein

 

Shaun Rein

Unlike their counterparts in the rest of the world, China’s youngsters are fiercely saving their money, says business analyst Shaun Rein at CNBC. “Unlike youths in the 2010s who often spent more than they earned and borrowed money to buy fancy items like Gucci handbags and Apple iPhone, young Chinese have started saving more,” he told CNBC.

CNBC:

Rather than splurging on impulsive purchases, China’s young are saving ferociously as the world’s second-largest economy remains in the doldrums.

Revenge saving has become a trend on Chinese social media websites, with Chinese youth setting extreme monthly saving targets.

A 26-year-old with username ‘Little Zhai Zhai’ is detailing her attempt to cap her monthly spending at just 300 Chinese yuan ($41.28) a month, with a recent video showing how she curtailed her daily meal expenses to just 10 yuan ($1.38).

Others are finding “savings partners” on social media. These partners form a savings circle that ensures its members stick with their goals. Savings measures also include dining at community canteens usually for the elderly, where fresh meals are sold at relatively cheap prices.

“Chinese youth have a revenge savings mentality,” said China Market Research Group’s Managing Director Shaun Rein. “Unlike youths in the 2010s who often spent more than they earned and borrowed money to buy fancy items like Gucci handbags and Apple iPhone, young Chinese have started saving more,” he told CNBC. …

Unemployment rate among youths aged 16 to 24 came in at 14.2% in May, well above the national average of 5%. While there are no official statistics for monthly wages earned by undergraduates, a survey found that the average monthly salary of those with undergraduate degrees earned in 2023 was 6,050 yuan ($832), 1% higher from a year earlier, according to domestic reports compiled by MyCOS research and published on local media .

“Confidence and Animal Spirits have disappeared among the youth. It’ll take years if not longer of a boom market before [they] feel comfortable to revenge spend,” said Rein.

More at CNBC.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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China consumer sentiment: modest improvement noted – Ben Cavender

 

Ben Cavender

After a lackluster start of 2024, consumer expert Ben Cavender sees a modest improvement in consumer sentiment in China, he tells Reuters. He said some companies were thinking about how to grow their business in China again after years of holding off on investing, which was helping sentiment to improve.

Reuters:

Other analysts said the spending data could be a turning point, as consumption in China has struggled to recover since the lifting of COVID curbs, weighed down by a property market downturn, high youth unemployment and concerns over job security amid an economic slowdown.

“Our sense is that there is a small but growing sentiment within white collar jobs that the market situation is improving and this is also leading to greater willingness to spend,” said Ben Cavender, managing director at Shanghai-based China Market Research Group.

He said some companies were thinking about how to grow their business in China again after years of holding off on investing, which was helping sentiment to improve.

In February, average spending per trip during the Lunar New Year holiday, one of the biggest holidays, fell 9.5% versus 2019 according to Reuters calculations based off government data, prompting analysts to say that “consumption downgrading” was still happening.

More in Reuters.

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China: manoeuvering between local debts and slowing revenue – Victor Shih

 

Victor Shih

Financial expert Victor Shih looks at the dilemma China faces as local debts run out of hand, while revenue is dropping, and consumer confidence is low, at a panel discussion at the Ray School of Management at the UC San Diego.

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No quick fixes for China’s economy – Shaun Rein

 

Shaun Rein

Business analyst Shaun Rein dives deeper into the China economy as consumer confidence in first-tier cities is lower than he has seen in 27 years and the government’s economic targets focus on the next 3-5 years, he tells CNBC. The government is unwilling and unable to rely on stiff financial bazookas as it did in the previous crisis of 2008. Economic growth of 5 percent is enough for the government now, as it wants to diminish the gap between haves and have-nots, he adds.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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China’s demographic timebomb – Shaun Rein

 

Shaun Rein

China’s aging population is leaving the labor force while dropping consumer confidence discourages youngsters from marrying or having children. Business analyst Shaun Rein tells Reuters the country is heading for a demographic disaster, and raising the pension age is one inevitable measure the government should take.

Reuters:

A record low birth rate in 2023 and a wave of health crisis-related deaths resulted in a second consecutive year of population decline, accelerating concerns about China’s demographic downturn.

Large groups of the 1.4 billion people living in the world’s second-largest economy will exit the labor pool and age past a prime period of their lives for consumption, exacerbating structural imbalances that policymakers have vowed to address.

“The world should be worried about China’s economic slowdown. It’s going to impact the profits of the world’s largest companies. When Chinese consumers are cutting back on their spending, that’s going to impact the Starbucks, the Nike’s, the Apples of the world,” Rein told Reuters.

More – including a video – at Reuters.

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How is China’s comeback working out – Shaun Rein/Ashley Dudarenok

Shaun Rein and Ashley Dudarenok

Business analyst Shaun Rein is interviewed by marketing guru Ashley Dudarenok on the most recent developments, as consumer confidence in China is slowly recovering at the end of 2023. But because of the ongoing trouble with the US, and because US firms fear more counterproductive measures by US President Biden, there are still many bears on the road to economic recovery. China focuses more on domestic companies, as US companies retreat, and the global south turns decisively to China for support, he says.

Both Shaun Rein and Ashley Dudarenok at speakers at the China Speakers Bureau. Do you need either of them at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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Why China consumers go for cheap during Single’s Day – Shaun Rein

 

Single’s Day (11/11) used to be the heyday for China’s consumerism, but this year the consumers went for the cheap stuff, says business analyst Shaun Rein at CNBC. Low consumer confidence forced the e-commerce platforms for the whole year to discount products, but Single’s Day was the cheapest event ever for consumers. Alibaba is losing its shine to newer platforms, he adds.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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Cautious optimism about China’s economy in 2024 – Shaun Rein

 

China’s economy looks better for 2024, says business analyst Shaun Rein, as multinationals are moving back their investments to China away from other destinations. Both consumer confidence and real estate are still in bad shape, but sentiments are moving in the right direction, he says at CNBC, despite the geopolitical tensions with the US.

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Why consumer confidence in China is down – Shaun Rein

 

Shaun Rein

Geopolitical tensions and the crisis in real estate have hurt consumer confidence over the past 18 months, says Shanghai-based business analyst Shaun Rein at ABC. He does not expect a big-scale stimulus, since the government is short of money to spend, but a slow recovery of retail is emerging, he adds.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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Confidence in China is low, and getting even lower – Shaun Rein

 

Shaun Rein

Confidence among consumers and investors in China’s economy is at a low and even getting lower in the coming weeks, says business analyst Shaun Rein to CNBC. Even a firm financial stimulus from the government like in the past is not going to work, as shortage of liquidity is not the real problem.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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Still low confidence, but prospects better in two-to-three months – Shaun Rein

 

Confidence among consumers and investors is still low, but Shanghai-based analyst Shaun Rein sees some light at the end of the tunnel. Liquidity is not a problem, but both consumers and investors are still careful in spending their money for the next two, three months, he tells CNBC.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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Consumer confidence might be down, but not for the rich – Ashley Dudarenok

 

Ashley Dudarenok

Consumer confidence in China might be down, and massive youth unemployment hurts the economy, but not for all consumers gloom is the message. Marketing expert Ashley Dudarenok sees prospects for high-net-worth individuals (HNWIs) – compared to the middle class – within the luxury market, she tells in the Jing Daily.

The Jing Daily:

As China’s recovery proves to be less robust than initially anticipated, a notable contrast emerges in the spending patterns between high-net-worth individuals (HNWIs) and the middle class within the luxury market, says Ashley Dudarenok, China digital marketing expert and founder of China digital marketing agency Alarice.

“High-net-worth consumers in China demonstrate a stronger appetite for luxury goods and contribute significantly to the market’s consumption power,” Dudarenok says. “Their purchasing decisions are driven by the desire for status symbols, exclusivity, and a sense of identity. On the other hand, the middle class, facing greater economic pressures and more cautious sentiments, may exhibit more restrained spending behaviors.”…

However, analysts have raised concerns over high youth unemployment in China. A recent Goldman Sachs report revealed that the youth unemployment rate (16-24 year olds) surged to 20.4 percent in April, posing a significant challenge for the country’s economic recovery.

Dudarenok says: “Concerns over youth unemployment may impact the purchasing power and willingness of younger consumers to engage in luxury spending. However, factors such as improving consumer confidence, accumulated savings, and marginal improvements in employment and income can provide some support to the recovery.” …

“Despite the uneven recovery, the Chinese market remains active with the largest consumer base, presenting an opportunity for brands to achieve significant success. Brands should understand Chinese consumer preferences so that they can tailor better their marketing and attract more consumers,” Dudarenok says.

More in the Jing Daily.

Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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Consumer confidence remains low, even with massive festival support – Shaun Rein

 

Shaun Rein

China’s consumer confidence remains low, even when its largest e-commerce platforms offer massive support, says business analyst Shaun Rein at the Hill. Rein said that consumers were less likely to spend more during 618 as merchants had already been discounting heavily for years because of the pandemic, and deals were not that much better compared to previous months.

The Hill:

Analysts say that consumption remains soft this year as China emerges from the pandemic, even as platforms including JD.com, Tmall, Taobao and Pinduoduo offered billions in subsidies.

“Chinese consumer confidence remains weak due to a mix of geopolitics, continued weakness from COVID-19 and domestic Chinese politics,” said Shaun Rein, founder and managing director of the China Market Research Group in Shanghai.

Rein said that consumers were less likely to spend more during 618 as merchants had already been discounting heavily for years because of the pandemic, and deals were not that much better compared to previous months.

In March, JD.com launched a “10 billion yuan subsidies” program to compete with rival Pinduoduo, which is known for its low-priced goods. The CEO of Alibaba’s e-commerce business unit, Trudy Dai, also previously pledged to make “huge, historic” investments to attract users to its platforms.

“For months, Chinese consumers have been price-conscious, looking for deals and trading down across most product categories,” Rein said.

More at the Hill.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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