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Consumers gloomy on income front

By Wang Xu (China Daily)
Updated: 2009-02-27 08:40

The economic downturn cast a gloom on consumer confidence although it remained unscathed till December, according to a recent survey.

"The next half-year will likely see a large drop in consumer confidence, especially personal financial standings," said Ngan Ly, research director, Ipsos China, a market research firm.

The company conducted a survey between November and December covering 2,400 female respondents in five major cities including Shanghai, Beijing and Guangzhou.

The survey found that respondents' income expectation has turned gloomier for the next six months.

Only 11 percent of the respondents said their financial status would be strong in six months, compared with 30 percent in December.

Compared with other cities, Shanghai consumers are the least optimistic about the economy, as the city's economic growth fell to 9.7 percent from a year earlier, the lowest in 17 years.

China's economy has slowed to a seven-year low of 9 percent in 2008, down from 13 percent in 2007.

The slowdown also hurt the income of urban residents, which expanded 8.4 percent in 2008, compared with 17.2 percent in 2007.

However, the survey found the current economic slowdown has not dented consumers' purchasing power, with 94 percent of the respondents claiming to have at least the same amount of money to purchase durables and household goods, compared with six months ago.

Ipsos said the Chinese consumers, both from the low and high income households would continue to shop for value as respondents define their purchasing behavior as largely driven by value, regardless of their level of prosperity.

Meanwhile, the survey respondents with higher income level said they are now more concerned with quality in their purchases.

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