BOSTON, October 1, 2012—Chinese consumers remain optimistic, even as their economy experiences a temporary slowdown, according to The Boston Consulting Group (BCG). This optimism is in stark contrast with U.S. and U.K. consumers, whose confidence in their own future and the future of their country in the global economy remains at low levels.
In a survey of Chinese, U.S., and U.K. consumers, BCG found that 40 percent of Chinese consumers said that they are planning to spend more money in the next 12 months than they did in the past 12 months—ensuring that they will continue to be an engine of consumer expenditure for the global economy. This level is up from 36 percent in 2011 and 23 percent in 2010. By contrast, fewer than one in ten consumers (9 percent) in both the U.S. and the U.K. said that they are planning to spend more in the next year.
The findings coincide with the launch of The $10 Trillion Prize: Captivating the Newly Affluent in China and India, a book by a team of BCG consultants that is being published by Harvard Business Review Press. The book presents in great detail the expected growth in spending in China and India between 2010 and 2020. By the end of the decade, consumers in the two countries are predicted to spend nearly $10 trillion annually—three times the amount they spent in 2010. It also presents a manual for business leaders who want to capture a slice of the prize.
Michael J. Silverstein, a senior partner based in BCG’s Chicago office and a coauthor of The $10 Trillion Prize, said, “Chinese consumers are a beacon of hope. They believe they will earn more, they will spend more, and their children will have a better life. They don’t see a global conflict on the horizon."
“U.S. and U.K. consumers, on the other hand, remain guarded, stressed, and anxious,” he said. “They are suffering the consequences of four years of recession and continued talk of a ‘double dip.’ They read the gloomy headlines from around the world and are filled with fear.”
The optimism of the Chinese—and the pessimism of citizens in the West—is reflected in a number of indicators:
Only 19 percent of the Chinese respondents said that they were not financially secure—compared with 51 percent of U.S. respondents and 42 percent of U.K. respondents.
More than half of the Chinese respondents (51 percent) believe that there will be a full economic recovery—compared with 27 percent of U.S. respondents and 21 percent in the U.K.
Some 86 percent of Chinese respondents think that life will improve over the next ten years—compared with 67 percent of U.S. respondents.
Some 80 percent of Chinese think that their children will have a better life than they did—compared with just 24 percent in both the U.S. and the U.K.
The survey found that 60 percent of U.S. consumers and 55 percent of U.K. consumers are anxious about the future—compared with 34 percent of Chinese consumers. They are also more fearful about the prospect of a global conflict: nearly 70 percent think that there will be a conflict, compared with 43 percent of Chinese.
Yet for all the optimism in China, the consumers there are not as content as those in the U.S. Only 18 percent said that their “happiness” exceeded their expectations—compared with 31 percent in the U.S.
In a sign that they want to carry on improving their lot, Chinese respondents ranked education as their number one priority if they were given a 25 percent increase in their discretionary spending. By contrast, U.S. consumers, asked the same question, listed savings as their top priority. They ranked education ninth of 14 categories, tied with hobbies, electronics, and home furniture and décor.
BCG’s Center for Consumer and Customer Insight surveyed 4,000 consumers in China, the United States, and the United Kingdom in August 2012. This undertaking was designed to supplement its annual global survey of more than 20,000 consumers, and complemented the extensive in-the-field interviews featured in The $10 Trillion Prize.
The $10 Trillion Prize: Captivating the Newly Affluent in China and India, by Michael J. Silverstein, Abheek Singhi, Carol Liao, and David Michael, is being published on October 2, 2012.
For more information, please go to www.bcgperspectives.com/10trillionprize.
To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or firstname.lastname@example.org.