Expanding affluent base powers China’s consumer market: PwC

China's consumer market showed an optimistic outlook, primarily driven by the expansion of the middle- and high-income groups, PwC said.

Concurrently, retailers in China were hit by weakened consumer sentiments and fierce price wars, while they also showed difficulties in the shift from traditional physical stores to an omnichannel retail model, it noted.

However, as the growth of middle- and high-income groups boosted the demand, the firm expected the need for high-quality, differentiated food, non-food products, and services would increase.

The rapid expansion of international and domestic supermarket giants in the country also indicated the strong consumer confidence in the Chinese market, PwC said.

Besides, China's consumers have a higher acceptance of health, sustainable, and international products than other countries, with large business opportunities for these new goods, it added.

As the yuan is estimated to appreciate in the future, coupled with the improvement of its property market, the robust economy will further enhance consumer confidence and stimulate local consumption, the company noted.

Regarding the Hong Kong market, the firm said the local consumer market will keep improving in the next year, empowered by increasing tourists, wealth effects from a buoyant stock market, and the recovery of mainland China's economy.

In recent months, more tourists have come to Hong Kong, especially those from Southeast Asia, with a high spending willingness, the company said, adding that various attractive luxury brands in the city would drive the consumption growth from this group.