SINGAPORE – According to a partner at management consultancy Oliver Wyman, the demand from Chinese consumers for imported items is no longer as high as it was before.
“There remains a strong pull, but there is less pull for imported products than last year,” said Jacques Penhirin, retail and consumer goods partner at the company’s Greater China office.
Foreign goods in categories like beauty, cosmetics, and dietary supplements are still popular, but demand has fallen, Penhirin told CNBC “Capital connection” On Wednesday. This also applies to electronics, where Chinese brands have made a “very strong push”.
He pointed out that there is “some kind of shift in consumer demand in such a way that (importing) is not the only recipe”.
Workers tag packages in Nanchang, central China’s Jiangxi Province, during Chinese Singles Day on November 11th.
Feature China | Barcroft Media | Getty Images
The main driver of this change is not politics, he said.
“I think it’s just more trust, the trust in Chinese brands that has been built over the years,” he said, noting that there are more good quality products being made in China. “”Apple is a good example. Designed in California but made in China. This is how China can make good products. “
Penhirin admitted nationalist sentiment could play a role, but said it was not the “main reason” for weaker demand for imported goods.
Months of trade tensions between the US and China have raised concerns that consumers on both sides could boycott each other’s products in support of their own country. Chinese social media users have also spoken out in favor of switching from American products to local products.
Penhirin’s comments came during the Singles Day Shopping Extravaganza, one of the largest online shopping festivals in the world that began in China. It usually takes place on November 11th and is sometimes referred to as 11/11.
The event, which has been extended this year, started on November 1st and ends on November 12th, unlike the 24-hour festivals of previous years.
Chinese e-commerce giant Alibaba said Sales reached a record 372.3 billion yuan (56.26 billion US dollars). on Wednesday at 12:30 p.m. Beijing time, while JD.com said the volume of transactions on its platform was 200 billion yuan as of 12:09 p.m.
The strong sales figures are not due to this Buy “revenge”, but stay connected with that Coronavirus crisis, Said Penhirin. “It’s more like having to spend money because we’ve saved money and can’t travel.”
He added that Consumer confidence in China is high. “The pandemic is behind it, at least in our survey. You can see that the rest of the world is struggling, but Chinese consumers are very confident that the Chinese economy is strong.”
Greg Portell, lead partner at Kearney Global Consumer Practice, agreed that the consumer recovery was much stronger than expected. However, it is becoming increasingly difficult to attract new users to the online shopping apps, he said.
“E-commerce has been growing for a while so the ability to attract new customers is gradually increasing,” he said “Road Signs Asia.”
For ecommerce websites, Singles Day is all about building networks and reaching consumers beyond selling during the event.
“They don’t want them to buy just one product,” Portell said. “You want them to land on your platform, deal with your platform and then ideally shop on your platform well beyond the Singles Day window.”