A new study out of Shanghai shows that while consumer confidence is returning among Chinese consumers, their attitudes toward purchasing remain changed by the pandemic.
The Hakuhodo Institute of Life and Living Shanghai (HILL Shanghai) Consumption Desire Index hit a severe low of 62.8 points in February as COVID-19 spread in China and full lockdown measures were enforced in various cities.
Since then, the index has made a full recovery to 2019 levels, with purchasing desire levels hitting 73.5 in April, 73.6 in May and 73.9 in June, the highest reading in a year.
Yet while the desire to spend is high, responses to the organisation's May survey very much indicate a desire to spend cautiously on items that provide more value or essential services, as opposed to entertainment or luxury items.
The top product categories respondents want to spend on were everyday necessities. Medical supplies or health products ranked highest (57%) along with food (54%) and insurance or investment products (49%). These were followed up by bath and toilet goods (38%) and kitchen products (37%).
Among the top products Chinese consumers wanted to save money on were categories in the realm of entertainment and luxuries: Eating out (53%); timepieces/jewelry/perfumes (48%); travel (48%); entertainment (36%); and alcohol (32%).
Meanwhile, shifts in consumption behaviours and attitudes in the survey also reflected a more cautious mindset. Chinese consumers continued to worry about saving money more often (57%) and choosing things that are good value for money (53%) while refraining from making major purchases (52%).
Only a minority (35%) of respondents now felt the desire to buy something that they were denying themseleves, with even fewer (21%) wanting to spend to upgrade existing goods or to buy luxury brand goods (10%).
Meanwhile consumers' ongoing lifetstyle habits continued to reflect changes that had been brought in as a result of the pandemic. Better hygiene habits (86%) and pursuing hobbies, classes and exercise (62%) seem to have taken root. Looking after family (85%) and being closer to parents (50%) have continued to remain key concerns, along with giving back to society (62%) and having a broader long-term plan for the future (69%).