2011 trends for China's consumers

(AFP PHOTO/PHILIPPE TAILLAN)

The retail sector will continue to grow as Chinese consumers demand more beer, e-commerce is poised to explode and foreign hypermarkets will battle with domestic stores for customers cash, according to a report by PwC.

The report, entitled Strong and Steady: 2011 Outlook for the Retail and Consumer Products Section in Asia, was published December 14 by Price Waterhouse Coopers (PwC) in cooperation with the Economist Intelligence Unit. It looks at the major consumer and industry trends in Japan, Korea, China and the rest of Asia. 

In general, year on year retail sales in China are expected to grow by around 14 percent and remain in the double digits until at least 2014. The driving force behind this growth and the key trends as predicted by PwC are interpreted below.
 
1. Hypermarkets
Global hypermarkets such as Carrefour and Wal-Mart have long had a presence in China, but 2011 will see these retail giants raising their investments as they begin to compete with individual department stores. Rising standards of living are also expected to heighten consumers interest in the foreign brands associated with these hypermarkets.

2. Beverages
Although beer consumption in China is not above average per head, due to sheer population size the country represents the world's largest beer market by volume. The demand for beer continues to grow in China and foreign firms such as Carlsberg are stepping up their investments. PwC predicts that within a decade China will account for half the world's demand for beer.

3. E-commerce
Currently one third of China's 420 million internet users shop online, and Chinese online retailers are expected to undergo massive growth in the coming years: Taobao, China's largest online marketplace, handled 97 percent more transactions in the first half of 2010 than in 2009 and is looking to expand. Due to low credit card usage and poor internet security in China, consumers can expect different payment systems and a tightening of card security.

4. Domestic detergents - foreign skin care
Demand for household goods including cleaning products and toiletries is expected to continue to grow, but while domestic brands are more popular for goods such as detergents, foreign brands such as L'Oreal retain dominance of the luxury skin care market. In particular L'Oreal have reported significant growth in mens' skin care products - indicating that male grooming could be the next big market in China.

5. Fashion
Fashion companies have confidence in the Chinese market and are expected to invest heavily in the coming years. In addition to luxury brands such as Chanel, Gucci and Burberry, which already have followers among elite upper-middle class Chinese, more affordable high street brands such as H&M and Gap are expected to continue expanding in China.

The full report can be downloaded from: http://www.pwccn.com/home/eng/rc_ap_products_outlook_2011.html