China's Newly-Wealthy Focus on Self-Improvement

BEIJING, May 4, 2011 /PRNewswire-Asia-FirstCall/ -- Rising incomes in China are not only leading to the purchase of new items, but the pursuit of a new lifestyle as well, according to a new report from Charm Communications Inc. (NASDAQ: CHRM), China's leading domestic advertising agency. In a shift away from merely purchasing big-name brands, Chinese consumers are using their newfound wealth to embark on a search for how purchases can add value to their lives by improving themselves, the environment, and society.

According to the Charm report, 2011 Insight into Chinese Consumer Trends, consumer purchases are focused on two main areas of the new lifestyle: the tangible and the intangible. Purchasing patterns that have emerged as a result are characterized by eight trends within these two main areas:

Tangible

Rather than eating brand-name fast food, buying couture clothing, and driving fast cars, consumers are choosing to purchase sustainably-farmed foods, leisure wear, and energy-efficient home appliances.

Health as a fashion trend

In addition to the enactment of new food safety regulations and laws, the Chinese public is becoming increasingly aware of health foods. They are embracing the "wisdom of health" and exploring traditional Chinese health remedies and practices. Many companies are focusing on the "all-natural" characteristics of their products; and numerous health supplements and homeopathic remedies have entered the market.

New starting point for rural economies

The increase in income has reached China's rural areas as well, and there is now a two-way flow of wealth between the farms and the cities, compared with the previous one-way flow from cities to farms. As rural people's incomes rise, "living the city life" has become mainstream, even in China's small cities and towns. Hence, the increasing spending power of China's rural areas is being re-examined by many advertisers. Conversely, many of China's young urbanites who have lived most of their lives within city limits are choosing trips to the "countryside" as their preferred method of re-energizing themselves after a hard week's work in the city. That emerging trend has opened up new business opportunities for farms and orchards to advertise berry-picking trips or picnic excursions where young urbanites can "return to nature" and get away from the pollution and crowds for the weekend.

Rapidly developing market for male grooming products

The explosive growth of the male skincare product market has led to the successive entry of a number of brands into the competitive pool. Men's pursuit of "beauty" has become increasingly prominent, and advertisers are taking notice.

Growing carbon-free awareness in everyday life

Consumers are becoming increasingly aware of the importance and environmental benefits of a low-carbon lifestyle. As a result, marketers - from banks and insurance companies to clothing brands and home appliance manufacturers - are leveraging "low carbon" in their advertisements in an attempt to connect with consumers' changing mindsets.

Intangible

Rather than trips to the mall or vacations abroad, consumers are choosing to spend more time with their friends and seek inner contentment, whether it is at an exhilarating roller coaster ride or calming session of deep meditation.

Putting words into action for the public good

In addition to the purchase of material goods, Chinese consumers also believe that using their earnings to help those around them in small ways is also a form of self-affirmation. This presents new ground for advertisers as companies turn a greater focus to social responsibility and community involvement.

Loneliness: simple comforts

In China's fast-paced economy, many consumers feel at a loss and seek a sense of purpose with greater aspirations - since they have become too focused on making money. As a result, many are turning to recreation and leisure in an attempt to find spiritual sustenance and comfort. There has also been a trend of group spending - activities where they feel a sense of camaraderie and have fun with their friends. Numerous communication platforms have emerged, including new social media channels and online gaming sites, as well as group activity outlets such as KTV bars.

The pursuit of happiness

The current generation of workers places a high value on achieving happiness in life. Each has their own set of unique hobbies and interests, and they are willing to spend money on pursuing their own versions of happiness, be it at a KTV bar, an amusement park, or various outdoor activities.

Paying for the spiritual life

There is a strong demand for spiritual growth and cultivation. Chinese consumers are eager to learn more about their nation's history as a way of finding themselves. Courses focused on national studies, mental healing, taichi and yoga have found success as consumers continue their search for spiritual inspiration. Advertisers are also increasingly focused on culturally-derived experiences.

"Today's consumption trends have changed from a pursuit of brand names to a pursuit of real value," said Zhao Yihe, Vice President and General Manager of Charm's Marketing and Media Research Center. "Consumers are shifting away from identifying themselves through purchases of brand-name products and focusing more on raising their quality of life and having unique experiences."

The report is the latest from Charm's market research center, which boasts a team of industry experts from consumer products, home appliances, pharmaceuticals, travel and tourism, and financials who work closely with clients to develop ideas that best connect with their target customers. For the full report in Mandarin, please contact ir@charmgroup.cn.

About Charm Communications Inc.

Charm Communications Inc. (NASDAQ: CHRM) is a leading advertising agency in China. Charm operates its business under three brands: Charm Advertising, Charm Interactive, and Shangxing Media. Under the Charm Advertising and Charm Interactive brands, Charm offers integrated advertising agency services from planning and managing advertising campaigns to creating and placing advertisements. Under the Shangxing Media brand, Charm has established a portfolio of television advertising media resources through its exclusive arrangements with premium national television channels, which include not only advertising time but also opportunities for placing branded content. Charm's clients include well-recognized brand names in China across many industries, as well as emerging domestic leading brands. In January 2010, Charm formed a joint venture with international 4A advertising group Aegis Media, its strategic investor, to operate its brand "Vizeum" in China. In October 2010, Charm also entered into agreement to establish a joint venture with Wasu Digital Group to operate all advertising-related businesses across Wasu's IPTV, 3G mobile TV and broadband TV network platforms. For more information please go to http://ir.charmgroup.cn.

Market and Media Research Center of Charm Communications Inc.

The Center is a professional market and media research department of Charm Communications Inc., which is a professional tem with more than ten years of market and media research experience. Its research involves consumer insight, communication trend analysis, industry research, industry studies and media studies. Supported by the data of domestic authorities, the Center fully controls industry data and competition, and combines the vast customer base accumulated by Charm Communications Inc. to form unique research results, to provide customers with very practical strategy selection. At the same time, the Center also provides clients with other professional services including market survey, market research, business strategy, and band consulting and planning.