Domestic brands help stabilize Chinese market in Q2

(Photo/Chinanews)

China's Consumer Trend Index (CTI) in the second quarter of 2019 remained at a high level of 115 points, similar to that of the last quarter, fueled by better welfare and stability of prices, the Nielsen report revealed on Tuesday.

"As the supply-side structural reform advances and the implementation of the policy to ensure 'six stabilities' is accelerated, the economic structure has been continuously optimized, and the endogenous power of the economy has been enhanced. It highlights the resilience and vitality of the Chinese economy and effectively facilitates long-term stable development," said Justin Sargent, President of Nielsen China.

According to the China National Bureau of Statistics, GDP in Q2 surged by 6.2 percent year-on-year, per capita resident income grew by 6.5 percent, housing prices remained stable, and the total retail sales of consumer goods increased by 8.1 percent. On the whole, the national economy operated within a reasonable range, and continued the overall trend of stable growth, laying a solid foundation for the increase of China's CTI.

In particular, CTI in Q2 witnessed the rise of local brands, with people in top-tier cities more willing to buy homegrown products. According to the newly released report, over 60 percent of consumers prefer to buy local brands, and the market share of domestic brands continues to grow.

(Photo/ Official Weibo account of People's Daily Online)

As for the reasons behind this new trend, cost performance remains one of the key factors for consumers to choose domestic brands, while they are more influenced by quality than price. Apart from that, national symbolism and consumer recognition of brands are another two factors behind the rise of domestic products.

"Consumers in top-tier cities are paying more attention to Chinese characteristics and cultural inheritance, which is also a reflection of the rise in cultural awareness and cultural self-confidence," said Sargent, adding that domestic brands' clearer and firmer brand attitude has successfully won the hearts of consumers.

For instance, with crossover cooperation between classical brands, Li Ning's revenue increased by 18.45 percent, and net profit increased by 39 percent in 2018. Consumers, especially the young, are passionate about traditional Chinese culture and symbols. Therefore, they tend to choose domestic brands and products for their traditional aesthetics, culture penetration and self-recognition.

Data also showed that 34 percent of consumers are more willing to support and buy domestic brands, of which men (36 percent) show more willingness than women (34 percent), and consumers in first- and second-tier cities (52 percent) are more willing than those in fourth-tier and rural areas (29 percent). In addition, 15 percent of consumers buy domestic brands because they recognize the brand spirit.

"In a market driven by consumer demand, brands need to pay attention to product prices, quality and brand building, while they need to lay more emphasis on the changes in consumer demand. Only those products that meet consumer needs can swiftly gain market recognition," Sargent added.