---
title: "What Are Chinese Consumers Willing to Pay for Now?"
description: "Over the past decade or so, we have conducted annual and semi-annual surveys of Chinese consumers to gauge their pulse. In just this short period, we have witnessed significant changes in Chinese consumers, especially in their purchasing behavior and attitudes toward what and how they buy. A decade ago, people were focused on getting the most value from every hard-earned yuan. Now, with rapid income growth, Chinese consumers are increasingly favoring higher-quality, higher-priced products and are more willing to spend on services. However, with more money comes more choices, and today's Chinese consumers have a wider range of options than ever before."
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published: "2018-01-13"
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# What Are Chinese Consumers Willing to Pay for Now?

> Over the past decade or so, we have conducted annual and semi-annual surveys of Chinese consumers to gauge their pulse. In just this short period, we have witnessed significant changes in Chinese consumers, especially in their purchasing behavior and attitudes toward what and how they buy. A decade ago, people were focused on getting the most value from every hard-earned yuan. Now, with rapid income growth, Chinese consumers are increasingly favoring higher-quality, higher-priced products and are more willing to spend on services. However, with more money comes more choices, and today's Chinese consumers have a wider range of options than ever before.

Over the past decade or so, we have conducted annual and semi-annual surveys of Chinese consumers to gauge their pulse. In just this short period, we have witnessed significant changes in Chinese consumers, especially in their purchasing behavior and attitudes toward what and how they buy.
A decade ago, people were focused on getting the most value from every hard-earned yuan. Now, with rapid income growth, Chinese consumers are increasingly favoring higher-quality, higher-priced products and are more willing to spend on services.
However, a fuller wallet means more choices, and today's Chinese consumers have a wider range of options than ever before. For brands to succeed in the competitive Chinese market, they must master a key skill: understanding how Chinese consumers make important decisions, as this directly affects what they buy and what they don't.
Through in-depth surveys of consumer attitudes and behaviors, we have discovered that the Chinese consumer base is highly diverse, with each segment having its own unique attributes that determine their consumption habits. In this year's survey, we interviewed nearly 10,000 Chinese consumers aged 18 to 65 from 44 cities and 7 rural townships. Among all our observations of Chinese consumers over the past decade, one point stands out in this year's survey: the 'Chinese consumer' as a monolithic group no longer exists; instead, there is clear diversity. This means that while identifying major trends is important, it can no longer provide nuanced insights into consumer behavior or help marketers make decisions.
In this year's report, McKinsey has identified four key trends that companies need to understand well in order to formulate their operating strategies in the Chinese market, from marketing to M&A. This year, we have delved deeper into each trend to gain more profound and meaningful insights into Chinese consumer behavior.
**The four key trends include:**
01
**Consumer confidence reaches a 10-year high**
**But risks remain**
The Chinese consumer confidence index rose from a low of 100 in spring 2016 to 115 in August 2017, the highest since before the global financial crisis in 2007 (see chart below). However, given high overall economic and household debt levels, Chinese consumers have ample reason to be cautious about the future. On one hand, high housing prices, large education expenses for children, and the growing burden of caring for the elderly in an aging society; on the other hand, slow income growth and rising prices cast a shadow over the otherwise bright prospects for Chinese consumers.
**02**
**Health matters**
**But Chinese consumers have different understandings of health**
Our survey shows that in the past few years, the number of Chinese people who value health and the impact of diet, exercise, and environment on quality of life has increased significantly. **65% of Chinese consumers pursue a healthier lifestyle**. Of course, Chinese consumers have different views on health, and we have divided them into five categories: Simple Lifers (25%), Health Balancers (30%), Sports Enthusiasts (10%), Workaholics (10%), and Indifferent (25%) (see chart below).
**03**
**China's 'post-90s' are becoming a new consumption engine**
They are 'digital natives' born in the internet age, aged between 17 and 27. The 'post-90s' consumer group accounts for 16% of China's total population, and from now until 2030, they will contribute more than 20% of total consumption growth, higher than any other demographic category. This is a highly diverse group, and we have attempted to subdivide them into five types: Happiness Seekers (39%), Success Chasers (27%), Contented Youth (16%), Impulsive Spenders (10%), and Pampered Second Generation (8%) (see chart below). As a promising consumer group, the 'post-90s' will have a significant impact on brand performance in the Chinese market.
**04**
**Chinese consumers have a more nuanced view of global and local brands**
In previous surveys, we saw Chinese consumers showing strong interest in foreign brands. Gradually, attention has shifted to local brands. In recent years, Chinese consumers have begun to pay close attention to brands that emphasize value for money. In this survey, we observed that Chinese consumers have a more nuanced understanding of brand choices. In most categories surveyed, brand origin is less important than before. Today's consumers are very clear about what they want, and the requirements are the same for both local and foreign brands. First, they must offer value for money. Second, product quality must be good and meet personal preferences. Finally, after-sales service must be in place.
There is no longer a monolithic Chinese consumer group. Demographic and geographic shifts are reshaping and segmenting the market, creating a highly diverse consumer base.
These consumers are more self-aware, younger, health-conscious, more mature in their brand perception, and have higher demands for the products and services they purchase. Multinational and local companies must understand and grasp the nuances of consumers to create attractive brands and product features.
This article is republished from McKinsey & Company.
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