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在线翻译:
szdaily -> Business
Newly rich Chinese embrace premium experience
    2017-February-16  08:53    Shenzhen Daily

    FROM spirits distillers and dairy producers to cafes, the latest mouthful in corporate buzzwords that market to the aspirations of China’s 1.4 billion consumers is “premiumization.”

    As China’s economic slowdown impedes the expansion of household spending, companies such as Kweichow Moutai Co., Danone SA and Starbucks Corp. are positioning to attract the rare segments that are poised to grow rapidly — products touted as healthier, higher-quality and fancier than the basics.

    “Chinese consumers are making purchase decisions based on how products make them feel,” said Vishal Bali, managing director of consultancy Nielsen China. “With increasing affluence, consumers are craving products that offer an enhanced, premium experience.”

    The demand for premium goods — typically about 20 percent pricier than the average in the same category — is gaining traction as an increasing number of Chinese families cross the income threshold to become affluent. For Chinese mainland households, being rich means earning 136,000 yuan (US$19,800) or more annually, according to Gavekal Dragonomics.

    About 11 million Chinese households are crossing to become affluent each year. How the newly flush Chinese are being drawn up-market is highlighted in the following charts that track their consumption:

    SUV sales accelerate

    SUV and minivan sales are expected to outstrip sedans this year for the first time. Rising incomes, cheaper oil and Chinese Government policies allowing more children are triggering a fundamental shift in the world’s biggest car market. That’s prompted Great Wall Motor Co. and Zhejiang Geely Holding Group to introduce upscale brands offering spacious models with the latest technologies. Though the SUVs are at least 40 percent more expensive than sedans, said Gavekal, sales of SUVs are expected to gain 22 percent this year.

    Yogurt catches up to milk

    Health-conscious and wealthy Chinese consumers have raised their spending on a range of product categories marketed at improving the quality of life. Fifty percent or more of shoppers say they are forking out more money for groceries, clothing, entertainment, travel and dining out, according to the Nielsen Feb. 7 report, which surveyed 30,000 people worldwide.

    Yogurt demand is surging due to its perceived health benefits over liquid milk, according to OC&C Strategy Consultant. “The first, basic wave is milk, now it’s going to yogurt, and usually the next phase is cheese,” Greater China partner Jack Chuang said.

    That trend has spurred Chinese companies to scoop up makers of premium products, including acquisitions in recent months by China’s top two dairy producers, China Mengniu Dairy Co. and Inner Mongolia Yili Industrial Group Co.

    Deal interest is also coming from private equity investors. Hong Kong-based PAG Asia Capital said this month it would pump US$170 million into Latvian dairy maker Food Union Group, with plans to bring its products into China, citing “a great demand among increasingly affluent and discerning Chinese consumers for high quality protein foods,” according to a statement.

    Bottled water growing

    Rising obesity rates are leading to increased awareness among consumers who are turning away from sugary drinks. Consumers prefer drinks specially designed for their kids, according to a Mintel Group Ltd. report on 2017 consumer trends in China.

    That hurts traditional soft drink makers such as Coca-Cola Co. and PepsiCo Inc. in the long-term, as growth in sales of bottled water outpaces fizzy beverages. Coke president James Quincey said the company is positioning itself though different brands to sell higher-end bottled water to Chinese customers.

    The upgrading trend is also evident in the demand for the Chinese fiery liquor known as baijiu. Mid-range drinkers are increasingly trading up to more expensive bottles costing more than 300 yuan (US$44) a pop, according to JD Finance, the data unit of e-commerce retailer JD.com.

    High-end appliances

    In Chinese homes, most urban families have already stocked up on basic appliances such as air-conditioners and microwave ovens. Shoppers are now upgrading to products that are typically viewed as indulgences, such as espresso machines. And when it’s time to replace basic white goods, they’re upgrading to fancier versions that make less noise and are connected and controlled through apps.

    That trend is behind deals like Haier Group’s US$5.4 billion acquisition of General Electric Co.’s appliances unit last year so it can offer Internet-connected products ranging from ovens to washers.

    “China’s home-appliance makers are focusing on implementing a high-price strategy instead of relying on large volumes,” said IHS Markit Technology principal analyst Horse Liu. “They are going from being driven by production capacity to being driven by innovation.”(SD-Agencies)

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