Consumer spending is likely to remain robust in China in 2018.
The continuing consumer boom is supported by rising disposable incomes, the continued process of urbanisation and sizeable wealth accumulated from property.
Millennials, defined as people born after 1985, are the drivers of the consumption boom. They are particularly interested in higher-end clothing, cosmetics and perfume, as well as shoes, watches, jewellery and bags. There are about 400 million millennials living in China.
Around 70 per cent of millennial respondents to a recent survey conducted jointly by KPMG and Mei.com, said they planned to increase or “significantly increase” their consumption of luxury goods and services over the next 12 months, with 45 per cent saying it is “essential” to own at least one designer item.
In the past 11 months, online retail sales in China expanded 32.4 per cent from the same period in 2016 to 6.4 trillion yuan, compared with 15 per cent one year earlier and 12 per cent two years earlier.
It's predicted that private consumption as a share of China’s GDP would reach 43.8 per cent in 2020 from 39 per cent in 2016.
China’s growth continues to be marked by a shift from investment to consumer spending, as consumers show a preference for online shopping and consumer credit.
Data from the People’s Bank of China this week showed that short-term loans to households, mainly consumer credit, surged 202.5 billion yuan in November, accelerating from 79.1 billion yuan in October.
It's a great time for Australia producers and designers to cash in on the China consumer boom.