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Chinese students a major market
force
BEIJING - Zhang Jie,
21, a junior student at Xi'an University of
Finance and Economics in the capital of northwestern
China's Shaanxi province, spends more than 5,000
yuan (US$604) every semester. "The tuition fee is
about 3,200 yuan and other expenses are around
400-500 yuan [$48-60] a month," said Zhang. Her
annual consumption is in fact higher than the
average disposable income of Chinese urban
residents, which is 8,472 yuan a year.
Chinese urban undergraduates like Zhang
have huge purchasing power, concludes a report
released last week by Sinomonitor, a Sino-Japanese
independent market monitoring company, and China
Youth Zeitgeist Cultural Co Ltd, a domestic media
firm specializing in university students. The
report is based on a sample survey conducted among
10,000 students of 126 colleges and universities
in 34 major cities from June to September last
year. The study, called "Consumption and Lifestyle
Study on 21st Century Chinese Undergraduates",
covers more than 30 kinds of products and
services, as well as undergraduates' ideas about
brands, fashion, media and lifestyles. Among those
surveyed, 62.7% are male students and 58.2% are
from cities.
"This is very important
research, and so far the only one specializing in
Chinese university students," said Zhang
Zhongliang, director of the China Economic
Monitoring Center affiliated to the National
Bureau of Statistics. According to Zhang, domestic
consumption is the most important factor in
supporting the country's economic development, and
university students are a key player in this. On
one hand, university students are potentially big
consumers after they graduate, on the other they
affect consumption trends in the domestic market,
Zhang said.
Statistics indicate that the
number of university students in China has
increased rapidly in recent years, from 1.08
million in 1998 to over 17 million in 2003. As the
country continues to enlarge its recruitment for
higher education, the figure will keep growing.
Though they are still a small part of the total
Chinese population of over a billion, university
students are big consumers and comprise a group
that will possibly command the highest purchasing
power in the near future.
According to
the survey, the average disposable income for
current undergraduates is 4,919 yuan per semester, says
Ma Qiji, deputy general manager of Sinomonitor.
Of their total earnings, 44% is from family
funds, 17.4% is from grants and loans, and 10% earned
by themselves. The students spend almost all
their incomes, the study shows. Like Zhang, tuition
fees and study-related expenses account for a chunk
of their spending. The average figure around
the country is about 1,801 yuan ($218) per
term, according to the survey. The second-biggest amount
is for food, drinks and cigarettes. Despite their
basic living expenditures and study costs, current
undergraduates pay more for Internet connections,
telecommunications, after-course training, tourism
and networking activities. Most students are
reasonable about their consumption. About 67% of
the surveyed could make ends meet while 22.4% had
deposits in banks.
But as the awareness of
credit consumption becomes more widespread in
Chinese society and banks provide convenient
services to university students, more and more
students are borrowing even for their daily
consumption. The study shows that 10.5% of the
students often take loans from banks. Some
students believe they can use the money they will
earn in future to help realize their current
dreams. Other students use loans to support their
basic living and studies.
A small
proportion that pursues fashionable items use
loans to purchase high-tech products, books and
goods in fashion. "An important reason for credit
consumption is that university students have
relatively higher and ideal expectations for their
future and are full of confidence about their
ability to repay loans," said Ma. However, their
consumption is restricted by their economic power
though they strongly desire high-end products.
The study shows students who have savings
spend more on after-course training and IT or
digital products. "This proves that irrational
consumption among undergraduates is not as serious
a problem as people imagine," Ma said. Many
Chinese believe that university students have the
habit of purchasing fashionable goods that are
beyond their means. Another feature thrown up by
the study is that students are becoming
increasingly independent. Of their total income,
18%, or 865 yuan, is earned by themselves through
part-time jobs. Some 70% of the students surveyed
have part-time jobs, either teaching or working
for companies, to support part of their expenses.
"Earning money is not the only purpose for their
working. The other important reason is to build up
themselves and improve their future
competitiveness," the study states.
Despite their limited income, university students
spend an average of 4.3% of their expenditure
on high-tech products. Some 27% of the students
have personal computers, 19.6% have personal
digital aids (PDAs), 11.9% have MP3 music players
and 11.8% have portable CD (compact disc) players.
Expenditure on Internet surfing and mobile
telecommunications also reflects current students'
pursuit of high-tech products. About 83% of the
students have surfed the Internet this term though
their expenditure on Internet connection, mail box
and online games is not huge - around 66 yuan per
month. And, more than 60% of the students have
mobile phones.
"Brands are important for
university students when they choose high-tech
products," said Ma. The study finds that students
are more loyal to foreign brands than domestic
ones. About half of the surveyed think the most
suitable price for a mobile phone is between 1,000
and 2,000 yuan, 85.38% of those who have
foreign-branded mobile phones are loyal to their
products. On the contrary, among those who have
locally made mobile phones, 79% prefer foreign
brands.
In the fast moving consumer goods
category, including cosmetics, foods, beverages
and sports goods, brand names as well as suitable
prices and product function are the most important
factors influencing students' purchases. Fashion,
attractive packaging and other factors do not have
as much influence as people imagine. However,
advertisements have a relatively important
influence on their choices as it does for other
consumer groups. More than 48% of the surveyed
believe brands which have advertising promotion
are relatively reliable, 49.4% think
advertisements are necessary in our daily life and
only 24.6% say watching advertisements is a waste
of time.
Sinomonitor ranked the most
competitive brands among university students
according to students' preferences, which shows
foreign brands are relatively more competitive,
especially in high-end consumer goods. These
brands are M-Zone in telecommunication sector,
Nokia in mobile phones, Lenovo in personal
computers, IBM in laptops, Sony in digital
cameras, and Netease as an Internet portal. Master
Kong, Yili, Huiyuan, Nestle, Pepsi Cola are the
most competitive brands in the food and beverage
sector. Little Nurse, Rejoice and Adidas star in
cosmetics, shampoo and sports goods.
"As
the first study specializing in university
students, it is helpful to find out the changes in
the values of Chinese students, and the spending
trend of China's potential core consumers," said
Ma.
(Asia
Pulse/XIC) |
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