Latest survey by Oliver Wyman says over 75 per cent of Chinese consumers reduced their spending on apparels and on footwear by 45 per cent in the first quarter. This could lead to a 15 per cent contraction in 2020. However, consumer spending is likely to return its 2019 level in the second half of the year.

The survey also noted a marked difference between the buying behavior of higher and lower income groups. More than 60 per cent respondents from the lower income groups preferred buying essentials only. On the other hand, the respondents from the high-income group said they would trade up and go for both value and quality, with 54 per cent of them saying they would still look to buy products offering higher quality and functionality.

However, the importance of goods that offered value for money was common to both groups. More than 70 per cent of lower-income respondents and 56 per cent of high-income respondents said they preferred items offering value for money. The firm also predicts online channels to take up to half of the entire market in 2020, surging from 34 per cent in 2019. Although shoppers with high-incomes traditionally preferred to shop for apparel and footwear in stores, 64 per cent of them now reported spending more online.