Report indicates consumer optimism in Q3

A recent report from Nielsen indicates an optimistic consumption market for the third quarter in China, amid discussions the country's economy is facing downward pressure and consumption downgrades.

"As China will put forward tax cuts and other fee reductions, tax policy has become more reasonable and benefited the Chinese people. Disposable income of residents has increased significantly, effectively boosting consumption and playing a positive role driving economic growth," said Andy Zhao, president of Nielsen China.

The report comes from an evaluation of China's Consumer Trend Index, a measurement put forward by Nielsen. The index measures perceptions of local job prospects, personal finance and willingness to spend. Index levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.

According to the report, China's Consumer Trend Index reached 112 points in the third quarter this year, down 1 point from the last quarter. That is still a high level, the report said.

Data from the report shows brands are less of a concern among Chinese consumers.

The value share of mid-sized to small brands increased 0.5 percent. At the same time, in terms of offline channels, the value share of the top 10 fast-moving consumer goods multinationals shrank from 17.8 percent to 17 percent.

Contrary to that, the value share of local small-to-medium sized firms increased from 25 percent to 21.3 percent.

"Amid a frenzy of consumption upgrading, consumers have been more mature, practical and rational, and no longer willing to spend for the consideration of appearance or brand. A new type of consuming culture is forming," Zhao said.

"The consumption upgrading means not only enhancing the product quality but also upgrading consumption concepts," Zhao added.

Zhao Ping, director of research at the Academy of China Council for the Promotion of International Trade, shared similar views.

Zhao Ping said consumers are spending more money on quality products than brands, and are shifting expenses to other sectors like travel, entertainment and education.

"They are restructuring purchasing behaviors and lifestyles," Zhao Ping said.

The report also revealed an increased willingness to pay among people in rural areas.

Consumer Trend Index in rural areas climbed from 114 points in the second quarter to 115 points in the third quarter — a slight increase. People's willingness to spend increased from 58 points to 60 points, which became the leading factor of growth.