Chinese consumers are increasingly engaged in buying overseas imported products through online channels, and it has been widely interpreted as a sign of consumption upgrade happening in China. Amid discussion of the Chinese online consumers, the phenomenal popularity of Pin Duo Duo, a social e-commerce known for unbelievable low price and bargain, drives people to question the real purchase power of Chinese consumers. (Azoya)
The ‘consumption downgrade’ argument, boasted by media from newspapers to WeChat official accounts, says that Chinese customers are less willing to pay for over-priced products. Pin Duo Duo (PDD), a mash-up of social and e-commerce, amassed over 200 million users within 2 years, was labeled as the leader of ‘consumption downgrade’. (Azoya)
While the consumption upgrading in China – people are looking for high-end products of premium quality, consumption downgrade is happening at the same time. It is about looking for the most reasonable price, paying for the most appropriate product, spending rationally, and living smartly.
This evolution is especially evident among 2 groups within the population: young consumers with limited financial resources and utility-driven consumers living outside the 1st tier cities. These people tend to buy cellphones from the domestic brand Xiao Mi (小米) with only 1/3 of the price of an iPhone, workout using training APPs such as Keep instead of paying for a personal trainer in an actual gym,and use group shopping APPs such as Pin Duo Duo to get a good bargain by joining more people they know into buying the same product.
Many Chinese are cutting conspicuous consumption – lavish spending to indicate social prestige – and are turning to cheaper substitutes. (SCMP)
Shen Weipeng is a 29-year-old trust manager in Beijing, working in one of the highest-paid vocations in China. His after-tax income last year was about 260,000 yuan. (SCMP)
He decided to cut his spending this year by replacing his favorite cocktail with water, cancelling a planned trip to Europe and sticking with his current mobile phone even though the screen is badly cracked. (SCMP)
Shen said he was trying to save money because he had a monthly mortgage payment of 11,000 yuan on his flat and was concerned about his income prospects. (SCMP)
Shen’s financial situation is not unusual in China, where discretionary spending is often limited by a large mortgage payment. (SCMP)
Consumers are pulling back on their spending on discretionary items as income growth slows and household debts rise. (SCMP)
The ratio of rent to disposable income in Beijing and Shenzhen is 58 and 54 percent respectively, according to data compiled by Chinese property service company E-House. (SCMP)
Contrary to popular belief, millennials can still afford to buy homes.
consumption: n 消費
phenomenal: adj 了不起的；非凡的
amass: v （尤指大量地）集聚，積累
premium: adj 高昂的；優質的
utility: n 實用
conspicuous: adj 顯眼的；惹人注意的
lavish: adj 奢華的；耗資巨大的
vocation: n （認為特別適合自己的）職業；工作
discretionary: adj 自行決定的；酌情行事的
disposable: adj 可支配的
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