---
title: "How to Accurately Grasp Current Consumption Changes"
description: "The main cause of the current changes in the FMCG market is the change in consumers. Due to significant consumer changes, brand manufacturers and terminal retailers are severely unadapted, leading to serious problems. To study the transformation of FMCG enterprises and terminal retail enterprises, one must first accurately analyze and grasp the characteristics of current consumption changes. If the changes in consumption are not comprehensively and accurately grasped, it is difficult to find the correct direction for transformation. Currently, some institutions, individuals, and enterprises focus their analysis of consumption changes mainly on the dimension of consumption upgrading. This feels incomplete..."
author: "鲍跃忠"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-04-21"
language: "en"
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# How to Accurately Grasp Current Consumption Changes

> The main cause of the current changes in the FMCG market is the change in consumers. Due to significant consumer changes, brand manufacturers and terminal retailers are severely unadapted, leading to serious problems. To study the transformation of FMCG enterprises and terminal retail enterprises, one must first accurately analyze and grasp the characteristics of current consumption changes. If the changes in consumption are not comprehensively and accurately grasped, it is difficult to find the correct direction for transformation. Currently, some institutions, individuals, and enterprises focus their analysis of consumption changes mainly on the dimension of consumption upgrading. This feels incomplete...

The main cause of the current changes in the FMCG market is the change in consumers. Due to significant consumer changes, brand manufacturers and terminal retailers are severely unadapted, leading to serious problems.
To study the transformation of FMCG enterprises and terminal retail enterprises, one must first accurately analyze and grasp the characteristics of current consumption changes. If the changes in consumption are not comprehensively and accurately grasped, it is difficult to find the correct direction for transformation.
Currently, some institutions, individuals, and enterprises focus their analysis of consumption changes mainly on the dimension of consumption upgrading. This feels incomplete. Analyzing consumption changes requires a systematic analysis from the following five aspects.
Under the environment of consumption upgrading, changes in mass consumption concepts, demands, and methods:
In recent years, consumption upgrading has been the main theme of overall consumer market changes. Information released by the National Bureau of Statistics: In 2016, the national per capita disposable income was 23,821 yuan, an increase of 8.4% over the previous year. Among them, the per capita disposable income of urban residents was 33,616 yuan, an increase of 7.8%. The per capita disposable income of rural residents was 12,363 yuan, an increase of 8.2%.
The annual national per capita consumption expenditure was 17,111 yuan, an increase of 8.9% over the previous year. Among them, the per capita consumption expenditure of urban residents was 23,079 yuan, an increase of 7.9%, and the per capita consumption expenditure of rural residents was 10,130 yuan, an increase of 9.8%.
The Engel coefficient was 30.1%, a decrease of 0.5 percentage points over the previous year, with urban areas at 29.3% and rural areas at 32.2%.
Nielsen's recent "Global Premium Goods Survey" report shows that in the Asia-Pacific region, the pace of consumption upgrading in China is more obvious, benefiting from both the significant improvement in economic level and the relatively inclusive and open-minded attitude of Chinese consumers.
When asked whether their financial situation has improved compared with the same period five years ago, Chinese consumers gave more affirmative answers. About 22% of respondents said it had significantly improved, up to 50% said it had partially improved, 20% felt no obvious change, and only 8% said their wallets had shrunk in the past five years.
For health, people are willing to spend more money to buy organic salads and vegetable and fruit juices; to become more beautiful, more people are choosing designer brand clothing and high-end cosmetics; food taste is no longer the only indicator of a restaurant's popularity, and restaurants with careful decoration and personality are increasingly appearing.
According to information released by relevant departments: In 2016, China's passenger car market grew by 12% overall, and BMW sales grew by 26%.
Nielsen surveys show that in China, the pursuit of beauty has also become a rigid demand. 56% of consumers said their spending on clothing has increased significantly compared with five years ago, and fast fashion and designer brands have also achieved rapid development in recent years. In addition, 52% of people have increased their investment in travel. 52% of consumers have invested more funds in entertainment and leisure activities, and 50% have become more fond of eating out in the past five years.
At present, changes in consumption concepts are very obvious. A common feeling is the concept of healthy eating and living. Previously, the saying was to eat enough and eat well; now many people generally accept eating less; previously, nutrition was understood as eating lots of meat and fish; now people understand nutrition as a light diet.
At the same time, information released by the National Bureau of Statistics: In 2016, annual online retail sales were 5,155.6 billion yuan, an increase of 26.2% over the previous year. Among them, online physical goods retail sales were 4,194.4 billion yuan, an increase of 25.6%, accounting for 12.6% of total retail sales of consumer goods. In online physical goods retail sales, food products increased by 28.5%, clothing by 18.1%, and daily-use products by 28.8%. In the first quarter of this year, national total retail sales of consumer goods were 8,582.3 billion yuan, a year-on-year increase of 10.0%, but online retail sales were 1,404.5 billion yuan, a year-on-year increase of 32.1%. Among them, online physical goods retail sales were 1,067.4 billion yuan, an increase of 25.8%, accounting for 12.4% of total retail sales of consumer goods; in online physical goods retail sales, food, clothing, and daily-use products increased by 17.7%, 15.6%, and 30.6%, respectively.
Data released by the National Bureau of Statistics show that in recent years, the consumer confidence index of Chinese consumers has been around 110%, remaining in the prosperity range.
From the above data, it can be fully seen that under the background of stable economic development and social stability in China, the consumer market has maintained steady development. On the basis of stable income growth, profound changes are taking place in consumption concepts, demands, and methods, with consumption upgrading as the main line.
Under the Internet environment, changes in people's lifestyles, life pursuits, social environments, and Internet scenarios:
At present, overall observation shows that the impact of the Internet environment on people's lives and consumption changes needs further understanding.
Chinese society is highly Internetized. Currently, the number of Internet users in China has reached 800 million, with more than 80% using mobile phones. WeChat users have reached 800 million, with an average online time of 90 minutes, and heavy users online for more than ten hours. In a highly Internetized social environment, the Internet has become an important part of daily life for more and more people. More people are increasingly accustomed to this Internetized life, and more people's lives are becoming more Internetized.
The Internet is changing people's lifestyles. The first thing in the morning is to open the phone and check WeChat; work contacts use WeChat or DingTalk; travel booking tickets and hotels online; ordering lunch choose Ele.me, Meituan, Baidu Takeout; friends make appointments by creating a group; work exchanges, learning exchanges, and friend exchanges create groups; shopping chooses online; watching movies chooses online ticket booking; travel chooses shared bicycles... At present, the Internet can basically meet people's daily life needs.
The Internet is meeting more of people's life pursuits. In shopping, people can find more quality goods suitable for themselves online; on the Internet, people can obtain more learning resources; on the Internet, people can get real-time information fastest; on the Internet, people can fully meet their material and spiritual needs and satisfy more life pursuits.
The Internet is changing people's social environment. In the Internet environment, more and more internet celebrities (in a broad sense, people with certain influence) and opinion leaders are emerging, and they are having an increasing impact on different groups and audiences. Various self-media of enterprises, institutions, and individuals, with their different values, are replacing traditional media. More and more groups, with their fast and efficient communication methods, are becoming the mainstream way of social interaction. People's social interaction is becoming more and more Internetized. Internet celebrities, opinion leaders, self-media, communities, and live streaming under the Internet environment are creating new social influences. Changes in the social environment have affected people's lives and are becoming the main factor affecting their consumption needs.
The rich scenarios provided by the Internet are changing people's lives. At present, the Internet provides scenarios that can fully meet people's daily lives, making people's lives more colorful. It has led people from the relatively monotonous life scenario of "shopping malls" to the rich Internet world. According to Nielsen's survey, currently, people choose an average of two offline shopping places daily, and 3-5 online. People no longer rely on "shopping malls" to pass leisure time, because with the rich Internet scenarios, people's lives are richer. So from a certain perspective, the rich scenarios of the Internet world are becoming the main guide for the diversion of customer flow in various traditional fields.
Therefore, in the current environment, it is very urgent and valuable to deeply study the impact of the Internet environment on consumers and consumption needs, especially the impact of Internet scenarios on consumption diversion.
At present, China's Internet consumption has taken the lead globally, such as mobile payment leading other countries. Therefore, in such an environment, as current Chinese FMCG enterprises and retail enterprises, they must first study the impact of the Internet environment on consumption changes, especially the impact of changes in people's lifestyles, life pursuits, social environments, and Internet scenarios.
The post-90s and post-00s generation, who grew up in the Internet environment, are gradually becoming the main consumer force. Their consumption concepts, lifestyles, social methods, and social cognition are very different from their parents:
The post-90s and post-00s, who grew up in the Internet environment, are not yet the main force in creating social wealth, but in a special social background, they have become the main consumer force. However, at present, society and enterprises generally pay insufficient attention to the consumption changes of the post-90s and post-00s. Many FMCG and terminal retail are far from adapting to and meeting their changed consumption needs.
Large numbers. The post-90s population is nearly 200 million, and the post-00s population is 140 million. Currently, the main consumer group has changed. The new main consumer group has significant changes in consumption concepts, methods, demands, and locations. Whether it is paying more attention to quality, no longer paying special attention to price, or being more personalized and fashionable, or paying more attention to health, sports, culture, entertainment, or preferring "home" and "what you think is what you get," in short, their consumption has undergone major changes and is no longer the same as before.
Nielsen's survey: In daily shopping, 77.3% of post-90s pay attention to whether they like it, 40.5% pay attention to price, and 31.9% are influenced by friend recommendations. Post-90s are a group with strong opinions, more often starting from their personal preferences as the starting point for shopping. External factors such as advertising promotions and shopping guide information have relatively little influence on them.
30.5% of post-90s think they are "homebodies," and 62% of post-90s' favorite leisure and entertainment is staying at home and surfing the Internet, ranking among the top three self-evaluations of post-90s, along with independence and struggle. Staying at home and surfing the Internet has become the biggest label for post-90s. They are sensitive to mobile data usage, often checking the background to prevent malicious software from stealing data. When occasionally eating out, the evaluation standard is not whether it is delicious, but whether the restaurant has free wifi!
Post-90s males are significantly more willing than post-90s females to buy clothing and shoes on Tmall. On Tmall, the purchase preference for men's clothing is 49%, and women's clothing is 35%; men's shoes purchase preference is 40%, and women's shoes is 31%. The post-90s group spends 24 billion yuan per month on online shopping, with most of the amount going to Taobao. For post-90s who like to stay at home and show their personality, online shopping has become their first choice. And not going out to enjoy food, clothing, housing, and transportation is even more welcomed by post-90s males.
54.9% of post-90s admire business elites, followed by leaders and great men at 31.2%. Among business elites, Ma Yun has the highest prestige at 75.3%, Bill Gates 61.3%, and Ma Huateng 41.0%. It is generally believed that post-90s love to chase stars, but in the selection of admired people, entertainment stars only rank fourth at 24.4%. Business and political elites are greatly sought after. Post-90s label themselves as an independent and striving generation, admiring business elites not only for money but for their persistent spirit of adhering to dreams, and the strong recognition and sense of belonging of "living is to change the world."
The most desired thing for post-90s is travel, with the most urgent travel desire among working post-90s at 50.9%, and students' desire to travel at 44.5%. "The world is so big, I want to see it." Post-90s travel does not pay attention to food and accommodation, but more to deeply understand local life and increase knowledge and experience. In recent years, budget travel and backpacking have been sought after by post-90s.
63.7% of post-90s youth are willing to learn knowledge they are interested in, and 23.8% will actively learn all new knowledge. Post-90s are a group very willing to accept new things, and also emphasize personal preferences. The happiness that post-90s seek mostly comes from interests. In QQ groups, 66.4% of communities are interest communities.
90.1% of post-90s evaluate others through words and deeds. When interacting with people, 71.8% of post-90s value dressing and appearance, and 62.7% value appearance. Post-90s are "face controllers" and typical representatives of the appearance association. Whether interacting with people or choosing products, they pay attention to the inside and pay more attention to the outside. To impress post-90s, being learned is not enough; being beautiful, handsome, and well-spoken is also necessary!
Among post-90s, 83.5% say they do not mind working overtime. When looking for a job, post-90s pay attention to working hours at only 1.4%, and social status at only 1.9%. The top three influencing factors are: salary and benefits, development prospects, and interests and hobbies. Post-90s are a generation of "work hard, play hard." Just entering the workplace, post-90s full of enthusiasm for the workplace do not care about overtime, pay more attention to salary and benefits, pay attention to whether the work is challenging, and hope for immediate recognition of their work achievements.
Nielsen's survey is basically only a surface survey, but even so, we can clearly feel the significant changes of the post-90s and post-00s.
Therefore, at present, FMCG manufacturers and terminal retail enterprises really need to deeply study the consumption change characteristics of the new main consumer force. They cannot continue the previous product concepts and marketing concepts; they must switch to product concepts and marketing methods that suit them.
Under the new consumption environment, basic needs are decreasing, and potential needs are rising:
In the new consumer market environment, consumers' basic needs are met, and consumer needs are more transformed into potential needs. What are potential needs? On the basis of fully meeting basic consumption needs, they show needs for higher quality, deeper levels, and broader scope. Now eating enough is no longer a problem, including recently, although the economy is declining, under the economic downturn there are many consumption areas that are very hot, such as fitness, tourism, and the real estate market. I think if eating were a problem, would people still travel, go to the gym, or buy houses? So when basic consumption needs are fully met, consumption needs have changed. Consumers pay more attention to health, sports, tourism, culture, leisure, fashion, personality, and other aspects showing new consumption demand changes.
What are the characteristics of these new consumption needs? They are not very direct. Basic consumption needs are easy to grasp and can directly correspond to corresponding goods, but potential consumption needs are very difficult to grasp. For example, how to solve health? How to describe their health needs?
In the current consumption environment, basic consumption needs are decreasing, and potential consumption needs are increasing.
Overall analysis, at present, there is a serious asymmetry between FMCG goods and new consumption needs. It is not that consumption needs are decreasing, but that consumption needs are increasing, but the overall FMCG goods seriously deviate from the new consumption needs changes and have not connected with the new potential consumption needs.
Consumption needs are manifested as three iterations: meeting basic needs, emphasizing consumption quality, and focusing on consumption experience:
Now not only is the overall consumer market in three iterations, but each consumer individual also reflects three iterations. In such an environment, consumption needs are more complex. Traditional product concepts, channel models, and terminal marketing models are difficult to meet the needs of three iterations. Traditional terminal market marketing measures, including vivid displays and special promotions, are far from meeting consumers' new needs. In the complex consumption environment of three iterations, FMCG must change product retail technical means. The original ideas and methods are no longer effective for current consumers.
Under the current consumption needs environment, FMCG must have three elements: First, it must have good basic functions. Second, it must have precise scenario positioning and cut into accurate consumption scenarios. Whether it is a dried fruit, a bakery product, or a beverage, it must accurately cut into which scenario the product is for: tourism, family, sports, or office. Third, it must have precise consumption experience and must meet consumers' demand for experience in the new environment.
Therefore, analyzing the current consumer market is very complex and difficult to grasp. We cannot use previous thinking to simply analyze consumption changes.
We cannot directly link consumption changes to a specific product or service, because such changes may not only be in products but also include needs beyond products.
Overall analysis, these consumption changes are still in deep change, and there will be more obvious changes in the future.
**Bao Yuezhong Column:**
New Distribution special contributing writer
Senior Economist
Expert of the Ministry of Commerce's "Ten Thousand Villages and Thousand Towns Market Project"
Adjunct Professor of Shandong Institute of Economics and Trade
Famous FMCG retail expert
Bao Yuezhong New FMCG, New Retail Innovation Practice Studio
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