In JWT’s latest AnxietyIndex study, Chinese consumers had by far the lowest level of anxiety level among the global markets studied: 35 percent reported feeling anxious or nervous compared with a global average of 70 percent. It’s mainly the lower-income groups that show signs of more cautious spending patterns. That’s because the crisis has primarily affected the export sector (garments, toys, electronics assembly, etc.), which is very labor-intensive and employs low-skill migrant workers from rural areas. The government estimates that 20 million migrant workers have lost their jobs. Coupled with a weak social security system and rising food prices, this makes the lower-end consumer feel more vulnerable.
But China’s financial markets have been largely insulated from the global financial tsunami, as the market is relative closed to foreign flows and is highly regulated. The more affluent consumers, who are mainly employed by government agencies, state-owned enterprises or JV companies, have felt very little impact. Their savings in the bank are safe, the prices of their homes stable and high, their jobs secure. As most brands target these more affluent consumers, this explains why few marketers have reacted to any mood change.
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