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Consumer confidence and spending potential continue to rise

CHINESE consumer confidence climbed to 111 points from a year ago in the second quarter, with spending continuing to grow due to increasing disposable income.

The China Consumer Confidence Index has remained stable at 111 points for the third consecutive month, with the country's shift from investment to consumption driving intentions to spend upward, according to market research firm Nielsen in a research report today.

In the three months, ending on June 30, Chinese consumers' willingness to spend reached 46 percent, 2 percentage points higher than in the previous quarter.

The report survey covers 3,500 respondents from domestic cities and rural areas.

Consumers in tier 3 cities reported the highest confidence index of 113 points, followed by tier 4 cities' residents with 112 points.

"Deepening urbanization is a key driver behind China's high level of confidence, and new consumers with cash to spend will emerge in the coming decade in the country," said Patrick Dodd, Managing Director of Nielsen China.

Chinese respondents show an increase in spending intentions on a wide range of categories such as clothing, dining out, holidays or vacations, children's education and out of home entertainment.

Perception about personal finance also increased one percentage point from that in the first quarter to 70 percent.

A 14 percent jump, on average, in migrant workers payment in 2013 made it possible for consumers to spend more, the research pointed out.

The growth of offline fast moving consumer goods sales, measured by Nielsen, slowed from 7.5 percent in the first quarter to 5.4 percent in the second quarter partly due to migrations toward online channels.

"The declining growth of FMCG sales doesn't conflict with the growing purchase intention, and the key lies in reaching the right consumers and converting confidence and willingness into consumption," said Kiki Fan, vice president of Nielsen China.


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