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Consumption is a trivial matter. It carries the psychological needs, identity expression and emotional expression of individuals in different situations.

Consumption is another major issue. It is one of the three driving forces of the national economy, the ballast stone for maintaining a stable economy, and the barometer for observing the economy.

What is the current status of the consumer market? Which industries are "running at high speed"? Which industries are seriously "involuted"? What new trends are showing in consumption? What new developments are there in enterprises? How will the declining birth rate and consumption tax reform affect the future consumer market? On August 13, at the 2024 New Consumer Power Ceremony held by Nanduwan Finance, the "2024 Consumer Trend Insight Report" was released. Focusing on the above issues, the report explores new consumption trends through data analysis, questionnaires, industry interviews, case analysis, etc., to promote high-quality development of consumption.

　Industry status

Tourism and scenic spot revenues are growing rapidly, while cosmetics and medical beauty marketing are the most expensive

Data released by the National Bureau of Statistics showed that in the first half of this year, my country's total retail sales of consumer goods increased by 3.7% year-on-year, lower than last year. At the same time, the actual growth of per capita consumer expenditure of residents nationwide was 6.7%, also lower than last year.

With consumption weak, companies are facing pressures such as falling demand, intensified competition, and shrinking profits. The industry is also becoming more and more involuted. Coffee for 9.9 yuan, bottled water for less than 1 yuan, and the disappearance of the ice cream "assassin"...

Which industries are still growing rapidly? Which industries are highly competitive and have serious marketing "involution"? Which industries can no longer "volume"? The "2024 Consumer Trend Insight Report" selected 35 industries closely related to residents' consumption from Shenyin Wanguo's secondary industries, and compiled the performance data of A-share listed companies in these industries last year to present the "all kinds of people" in various industries in the consumer market.

The report shows that the three major industries of tourism and scenic spots, hotels and restaurants, and film and television theaters had a relatively high overall revenue growth last year. Among them, the total revenue of A-share listed companies in tourism and scenic spots doubled last year compared with 2022. The substantial growth in revenue of these three industries also shows that my country's service consumption is showing a rapid growth trend, and there is still huge growth potential and upgrading space in the future.

In addition to the above three industries, including accessories, passenger cars, liquor, entertainment products, professional chains and medical beauty, the total revenue of A-share listed companies also increased by more than 10% last year.

In terms of net profit, judging from the total net profit attributable to parent companies of the top three A-share listed companies last year, these 35 industries can be roughly divided into three tiers: the first tier includes communication services and liquor. The top three "giants" in net profit in these two industries had a total net profit of over 100 billion yuan last year, and they have a "money-making physique"; the second tier includes white goods, passenger cars, consumer electronics, real estate development, beverages and dairy products, and traditional Chinese medicine. The total net profit of the top three companies in these six industries last year was more than 10 billion yuan; the third tier is the remaining 27 industries, and the total net profit of the top three companies in net profit is tens of billions of yuan.

The results are different when we look at the proportion of A-share listed companies with net profits exceeding 100 million yuan last year to the total number of A-share listed companies in the industry. Kitchen and bathroom appliances stand out from the crowd, with all nine A-share listed companies having net profits exceeding 100 million yuan last year. In addition, more than 70% of A-share listed companies in the four industries of white goods, liquor, medical beauty and professional chain stores had net profits exceeding 100 million yuan last year.

Against the backdrop of weak consumption, it is an indisputable fact that the consumer market is "involuted". Marketing is a bridge between enterprises and consumers. In order to hit the "heart" of consumers, which industries are the most "invested"? The report said that in terms of the average sales expenses of A-share listed companies last year, the white goods and passenger car industries were "far ahead", both exceeding 10 billion yuan. In industries such as communication services, liquor, pharmaceutical commerce, beverages and dairy products, traditional Chinese medicine, general retail and Internet e-commerce, the average sales expenses of A-share listed companies last year were all over 1 billion yuan, but compared with white goods and passenger cars, the gap is large.

From the perspective of sales expense ratio, the three major industries of cosmetics, medical beauty and games spend almost 30% of their revenue on sales, which can be said to be the most "costly". The four industries of traditional Chinese medicine, clothing and home textiles, chemical pharmaceuticals and kitchen and bathroom appliances spend more than 20% of their revenue on sales.

　　Consumption Trends

More than 40% of respondents said that emotional value is one of the main reasons for the increase in travel spending

The report also conducted a questionnaire survey on topics such as consumption habits, consumption downgrade, and high-end substitutes. Among the respondents, women accounted for a large proportion (66.87%), and most of the respondents were between the ages of 18 and 45. The respondents were mainly office workers (66.27%) and students (15.66%).

The survey results show that the factors that respondents value most when consuming are quality (93.37%) and price (90.36%), followed by function (66.27%) and service quality (43.98%). In the past year, in which areas have consumers increased their consumption? The survey shows that respondents chose catering/beverages (50.6%), travel (44.58%) and clothing accessories (39.16%). As for the reasons for the increase in consumption, nearly 80% chose "increased demand for use", but more than 60% of respondents chose "being able to obtain emotional value". This shows that when people consume, they value the emotional resonance and spiritual satisfaction attached to the goods.

Compared with the items where consumption increased, the items where respondents' consumption decreased in the past year were more scattered. As for the reasons for the decrease in consumption, the main reason was "reduced demand for use", followed by "changes in income".

The survey results also show that 90% of the respondents have experienced consumption downgrades in the past year. Among them, 36% of the respondents often downgrade their consumption, and more than half of the respondents downgrade their consumption occasionally. Regarding consumption downgrades, half of the respondents believe that this is a rational way of consumption. How much impact does consumption downgrade have on the quality of life? Among the respondents, half believe that it has a great impact or some impact on the quality of life, and half believe that the impact is not significant or has no impact. It is generally believed that low-income groups are more likely to accept consumption downgrades.

Amid the general trend of consumption downgrade, high-end substitute products are becoming popular. The survey shows that 76% of respondents believe that as long as the quality is the same, they will choose substitutes. In the past year, more than half of the respondents have purchased high-end substitute products. Among the respondents who have purchased high-end substitute products, more than 80% of the respondents said that the reason for the purchase is that high-end substitute products are more cost-effective.

　　Case Study

How do companies “hard-control” young people? Cross-border collaborations and social media platforms

Behind the new consumption trend is the change in the main body of consumption. Data shows that in my country, the number of "Generation Z" has exceeded 260 million. In order to cater to Generation Z, the consumer market has also generally swept the trend of young consumption.

The report states that young consumers have many distinct characteristics, such as the pursuit of emotional value, paying for self-pleasure; focusing on the “quality-price ratio” and choosing low-end products; loving “national style” elements and being attracted by oriental aesthetics…

By sorting out and analyzing the collected young consumption cases, the report found that companies usually have five ways to "hard control" young people.

One is to cooperate with celebrities and Internet celebrities to promote the "fan economy". For example, Heytea invited fitness blogger Pamela Reif to serve as the "health recommendation officer".

The second is to promote concepts such as "0 fat, 0 sugar" and "light food" to cater to young consumers' pursuit of health and wellness. For example, Jane Eyre Light Yogurt has launched two types of 0% sucrose and 4% sucrose to meet the sugar control needs of different consumer groups.

The third is cross-border collaboration to increase the brand fan base. For example, Cha Baidao collaborated with "Undetermined Event Book" to launch an exclusive joint package, collaborated with Dunhuang Museum to develop the "Feitian Tea Hunting" series of new autumn and winter products, and collaborated with Luzhou Laojiao to launch a joint drink "Drunk on the Road".

Fourth, we launched hot-selling product promotion and category education on social platforms. For example, Wanyilan operated multiple topics on Xiaohongshu and Weibo, and collaborated with KOLs to speak out.

The fifth is to carry out scene marketing and strengthen the social attributes of products. For example, Zhujiang Beer has created the "Pure Draft Music Party" to communicate with users through immersive and interactive music scenes, making the brand an "emotional partner" for young people.

In addition to young consumption, green consumption is also one of the major trends in the industry. How to improve the "green content" of products or services? The report analyzes cases and points out that companies usually have four paths.

First, in terms of product ingredients, we focus on organic, natural, and additive-free, providing consumers with high-quality products that are beneficial to life and health; second, we reduce energy consumption and pollution through technological upgrades in the production process; third, in product packaging, we use environmentally friendly materials and reduce excessive packaging; fourth, in supply chain management, we promote green electricity procurement and reduce carbon emissions.

At the same time, the report also pointed out that there are still many difficulties in green consumption, including: the public's awareness of green consumption still has a lot of room for improvement; companies face difficulties in green production, such as supply chain emission reduction; imperfect policies, lack of unified certification mechanism and management system; some green products and services are expensive, affecting purchasing intention.

In addition, the report also discussed the factors affecting the future development of the consumer market from aspects such as the decline in birth rate and consumption tax reform. The report said that under the new demographic situation, consumers' consumption patterns, consumption choices, and consumption habits will change, which is both a challenge and an opportunity for enterprises. In terms of consumption tax reform, the report analyzed the possible reform direction and impact of consumption tax. The report said that the consumption tax reform may have little impact on gold, silver, diamond jewelry and automobiles, but will have a greater impact on liquor, luxury goods, high-end services, high-energy-consuming and high-pollution products, as well as duty-free and aviation industries. In general, after the consumption tax is transferred to local governments, the enthusiasm of local governments to promote consumption will be enhanced.

　Marketing failure revelation

New tea drinks have repeatedly encountered food safety issues; prepaid consumption and pre-prepared meals have attracted much attention

Which fields have frequently seen consumer complaints this year? What are the major public opinion events? Why were companies slapped in the face for their quick responses... On the afternoon of August 13, Nanduwan Finance shared the revelation of marketing "crash" from the media perspective at the closed-door seminar of the 2024 New Consumer Power Festival, aiming to discuss with companies how to better respond to consumer concerns in crisis public opinion events, and better demonstrate the company's values, humanistic care and social responsibility to the society.

　　Household appliances, daily life and social services are the most common areas for complaints

Since the beginning of this year, a series of policies and measures to promote consumption have been introduced. On August 3, the State Council issued the "Opinions on Promoting the High-Quality Development of Service Consumption" (hereinafter referred to as the "Opinions"), which mentioned measures such as tapping the potential of basic consumption, stimulating the vitality of improved consumption, cultivating and expanding new consumption, and enhancing the function of service consumption. It can be said that promoting consumption has always been given priority by the government, and how to stimulate the consumption potential of the market is also an issue that needs to be studied.

While the government is introducing measures to promote consumption, it also attaches great importance to strengthening supervision of service consumption and guiding honest and compliant operations. The Opinion mentioned that relying on the "Credit China" website and the National Enterprise Credit Information Publicity System, the "Credit Information" section will be launched to strengthen the collection and publicity of credit information such as registration and filing, administrative licenses, and administrative penalties of relevant business entities, so as to guide more business entities to be trustworthy and trustworthy.

According to the statistics of complaints received by the National Consumer Association, in the first half of 2024, the National Consumer Association received more than 780,000 consumer complaints, an increase of 27.21% year-on-year. If the complaints are classified into commodity and service categories, it can be seen that: among the major categories of commodities, the top five categories of complaints are household electronic appliances (10.86%), clothing and shoes (8.61%), daily commodities (8.43%), food (7.53%), and transportation (3.19%); among the major categories of services, life and social services (11.48%), Internet services (10.09%), telecommunications services (4.02%), education and training services (3.92%), and sales services (3.35%) are in the top five.

At present, consumption upgrades are accelerating, new scenarios, new formats, and new technologies in the consumer field are constantly emerging, and infringement methods are also constantly changing, making it difficult to guard against them. However, consumer rights protection policies and laws are relatively lagging behind, operators and consumers have information asymmetry and power imbalance, and the consumption environment does not match consumers' consumption intentions, which is inconsistent with the requirements of high-quality development. Therefore, in response to new scenarios, new formats, and new models in the consumer field, consumer committees at all levels have proposed to identify pain points, blockages, and card points, jointly with relevant departments to promote problem solving, strengthen guidance and norms, and promote the healthy development of new consumption.

　Food safety and product quality are the most concerned by the Southern Metropolis Daily

Nandu Identification and Evaluation Laboratory focuses on hot topics in the consumer field. As of August 10 this year, Nandu Identification column has published a total of 249 related reports, covering food safety (accounting for 35.7%, the same below), product quality (30.9%), advertising (13.2%), price adjustment (5.2%), employee management (4.0%), prepaid consumption (1.0%) and other categories.

According to the reading volume of Nandu APP, the reports with the highest reading volume in Nandu Consumer Exposure Platform column during this year's statistical period involved advertising, food safety and employee management issues.

In terms of advertising, Blue Moon's controversial laundry detergent advertisement "Mom, You Use It First" released on Mother's Day attracted the most attention. Coco Tree was fined for claiming "Use Coco Tree to wipe breasts" and its response also caused controversy. In terms of food safety, the mixing of edible oil and coal-to-oil has attracted high attention for many days. The pill incident of Haidilao's second-hand drinks was reported by Southern Metropolis Daily and ranked first on Weibo's hot search list, with over 200 million readings. Many new tea beverage companies have "stepped on landmines" on food safety issues many times this year. In terms of employee management, Deppon Express was questioned by netizens about its management style because its employees wrote insulting words on consumers' personal belongings. This topic was reported by Southern Metropolis Daily and ranked first on Weibo's hot search list. In another area, a senior executive of Adidas China was collectively reported by employees for corruption and workplace bullying, and the company had to respond immediately.

The results also show that prepaid consumption and pre-prepared meals are still topics that have received widespread attention in recent years. In the past two years, price reduction has become a hot word in the consumer field. The results show that many well-known companies have attracted attention this year due to price increases and sudden packaging fees without informing consumers.

At the closed-door seminar, Nanduwan Finance also analyzed the hot public opinion cases in terms of the breadth and depth of the impact of the incident, the company's public relations methods, and the feedback from the society. It is not difficult to see that the protection of consumer personal information needs to be accelerated, and good reviews and good services are needed; companies should ensure that "low prices are not low quality", and relevant regulations should be more refined and rationalized; when encountering hot events, companies should not take advantage of the hot spots, especially when the logic of the event is not clear, be careful of being backlashed by traffic; in the face of consumer rights protection self-media and traffic, it is critical for companies to handle it in accordance with laws and regulations; in the face of consumer complaints, companies must respond to consumer demands, rules are important, but human touch is also indispensable; food safety is the top priority, and franchisee management must be strengthened and refined.

　　A08-11

Planning: Rong Mingchang Liu Jiangtao

Executive Planning: Wang Ying

Co-ordinator: Ma Jianzhong, Chen Shi, Guan Jianming, Chen Yangkai

Executive Coordinator: Liu Lanlan

Design Coordinator:Jin Guohua

Interviews and writing: Liu Lanlan, Beibei, Zhang Haixia, Zhan Danqing, Feng Jiaju, Huang Chibo, Xiao Ziqi, Kong Xueshao, Wang Jingjuan, Qiu Kangzheng, Wang Lena, interns Lin Tianxing and Xue Botong