Shaun Rein

China’s consumers continue to spend, despite a small dip in growth, also for decorating their homes, argues business analyst Shaun Rein, and goes against JWT executive Tom Doctoroff, who says Chinese consumers go for cheaper products. Shaun Rein dismantles three consumers myths in Business Week.

Shaun Rein:

Tom Doctoroff, chief executive officer of J. Walter Thompson Shanghai, argues that Chinese consumers are not willing to spend more than the minimum on items inside their homes. Concerned with the projection of outward status, Doctoroff believes Chinese won’t spring for foreign appliance brands if they can’t show them off to others and will instead opt for cheaper, good-enough domestic brands such as Haier or Gree.

Doctoroff’s conclusions, however, don’t match the results of 500 interviews China Market Research Group conducted with people whose net worths are over $500,000. We found that 90 percent of well-off respondents preferred big-ticket item household appliances from foreign brands such as Samsung andSiemens (SI). In fact, most of them bought only foreign-brand appliances, explaining they felt the non-Chinese names had better functions and underlying technology.

What’s more, as we broke down home spending room by room, one of the key areas female consumers focused on—and where spending was growing fastest—was the bedroom. They particularly were interested in high-quality sheets and mattresses. These are items that have nothing to do with showing off to friends, most of whom would likely never see the inside of their bedrooms. These purchases are all about consumers pampering themselves. One 28-year-old Shanghai woman told me why she spends so much on linens: “I work hard and want to feel like a princess at home.”

While it is true that “showing you’ve arrived” is often an important driver in spending patterns, companies should not be so fixated on this concept that they ignore an important shift that is going on: Consumers are increasingly willing to spend extra to indulge themselves.

More in Business Week.

Shaun Rein and Tom Doctoroff are both speakers at the China Speakers Bureau. Do you need one of them (or both) at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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