UPS study reveals growing opportunities in Chinas consumer market

by Canadian Shipper

MISSISSAUGA, Ont. — UPSs second annual survey of Chinas growing class of urban consumers highlights a rapidly expanding market and an increased demand for American/western products.

Providing insight into the Chinese consumers mind, the survey highlights important information for Canadian companies that have yet to capitalize on the worlds fastest growing consumer market.

The 2006 study found that more than half of urban Chinese consumers surveyed use credit or debit cards for shopping, and 84 per cent of those with credit cards expect their usage to increase or remain the same in the coming year. This is especially true in larger cities such as Beijing where 47 per cent of urban Chinese consumers are increasing their credit card use. The survey also reveals a preference for western-style packaging, especially for beauty products with 45 per cent of young high-income Chinese consumers saying they prefer western packaging.

With 40 per cent of urban Chinese internet users having tried online shopping, Canada is witnessing the emergence of immense business opportunity, says Glenn Rice, President of UPS Canada. There is a fast growing middle class for Canadian exports. At a time when Canada continues to source Asia for manufacturing, targeting this area for consumer purchasing can secure our position on the international business scene.

According to recent statistics from Canadas Department of Foreign Affairs, the trade imbalance between Canada and China is more than four to one in Chinas favour. In May 2006, for example, Canada imported CDN$2.67 billion worth of goods from China. At the same time Canada exported CDN$559 million to China.

Chinas appetite for western-made consumer goods is emerging at a time when technology and supply chain infrastructure allow Canadian businesses to operate anywhere in the world. As online shopping trends increase, so will the opportunities for those that are ready to meet the consumer demand. The time for businesses to develop an export to China strategy is now, says Rice.

UPS offers a range of services to help businesses deliver to China. Last year, the company became the first carrier in the industry to acquire direct control of its operations in China. This year, the company expanded its international express service to 22 more business locations in China, bringing total number of cities served in the country to 330. Those cities account for roughly 85 per cent of China’s international trade. Most recently, UPS opened two retail centres in Shanghai, providing customers with greater shipping convenience.

Conducted by Research International, the survey was a quantitative study of 1,200 Chinese consumers in six Chinese cities: Beijing, Shanghai, Guangzhou, Shenyang, Chengdu and Wuhan. Respondents were all between the ages of 20 and 59 and have high household income levels in China (monthly income of RMB 3,000 or above in Beijing, Shanghai and Guangzhou, and RMB 2,000 or above in Shenyang, Chengdu and Wuhan). The survey was conducted as computer-aided telephone interviews between June 2 and 20, 2006.

Other Survey Results:
h Age Differences
Younger consumers prefer to see company logos on product packaging, whereas older lower income urban consumers are more likely to prefer Chinese icons on packaging.
h Gender
Male urban consumers prefer cool package colours such as blue, and survey respondents say that gifts for men should have blue or black packaging.
Female consumers prefer warmer colours such as red and purple, and 50 per cent of respondents say that red packaging is best for gifts to be given to women.

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