What Worries Chinese Consumers? Safety Trumps the Economy

China's Tainted Milk Scandal Still Concerns Local Shoppers

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SHANGHAI (AdAgeChina.com) -- While the recession has dominated the news for the past year, it is not the primary cause of stress for Asian consumers, especially in the two largest countries-- China and India-- according to a survey by JWT called Anxiety Index. The survey tracks the levels, intensity and drivers of consumer anxiety. The research was conducted by JWT and Millward Brown ACSR in telephone interviews with 500 adults aged 18-50 in Shanghai, Beijing, Guangzhou, Yantai and other cities.

"While the economic recession has been pervasive in the media, consumers in Asia expressed concern for a wide range of issues," said Michael Maedel, JWT's president in Singapore. China "had little concern for the economy" compared to other countries in the survey, but "they are extremely worried about other issues such as food safety. Indians have some concern for the economy but are very optimistic about the recovery and instead are more concerned about threats to their personal security."

Overall, consumers in China are much less anxious than consumers in other parts of the world. Only 35% of the respondents in China are anxious compared to 90% in Japan, 74% in India and 79% in the U.S.

Even though the survey showed that half of those intending to purchase a car in the past six months have canceled or postponed their purchase due to the economic downturn, car sales in China have surpassed sales in the U.S. for the first time.

When the global financial crisis began, there was concern about the impact on China's export- driven economy, said Guan Haidong, a planner at JWT, Shanghai. "With by far the largest economic stimulus plan in the world, China seems to have weathered the worst of it."

The one sector in China that has been heavily impacted is the export sector, with an estimated 20 million layoffs, mainly of unskilled workers. Since China has a weak social security system, low-income respondents unsurprisingly expressed the greatest anxiety.

The only area where Chinese consumers showed a dramatic level of anxiety was over food safety, whicj os understandable given the 2008 tainted milk scandal that affected 300,000 people in China. The World Health Organization called it one of the largest food safety events it had had to deal with in recent years, and said that the crisis of confidence among Chinese consumers would be hard to overcome.

Anxiety levels are fairly consistent across all cities surveyed, with the lowest-tier cities the least anxious. Overall Chinese consumers are optimistic about the future. The majority think the future will improve when it comes to issues like the economy, food safety, the cost of health care, the stock market, job security and crime. But they do exibit some pessimism about gas prices, unemployment rates and China's housing market.

Even though Chinese consumers' anxiety is low compared to other countries, they are still cutting spending. That finding is consistent with Asians' cautious spending habits and high rate of savings.

To save money, consumers in China are shopping less frequently, and canceling or postponing purchases. Compared to six months ago, consumers are more often opting for practical and cheaper brands. Consumers also said they feel that brands need to do more to help them cope with change.

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