Soy milk, toothbrushes and hair conditioner are biggest winners as more Chinese consumers opt for premium brands, says study

What do soy milk, electric toothbrushes and hair conditioner have in common? They are among the biggest beneficiaries of China’s consumption upgrade, according to global consultancy Bain & Company.

The shift in spending by China’s expanding middle class towards more expensive, premium goods has led to a large increase in sales of these and other items, the firm said in a report based on research by Kanta Worldpanel China, which tracks of 40,000 Chinese households’ spending.

Soy milk, made from soybeans, as an alternative to traditional dairy milk topped all 20 goods monitored, with annual sales growing by half on average between 2016 and 18. This was driven by a 28 per cent rise in the volume sold and a 17 per cent increase in the average price.

Hair conditioner and toothbrushes were the items that relied most on premium products, with 64 and 55 per cent of their sales, respectively, derived from premium and super-premium offerings. That compared with 29 per cent for sweets, for example.

“Toothbrushes’ typical price is less than 10 yuan each. But an electric toothbrush can be sold for a few hundred, or even a thousand yuan, which contributed to 60 per cent of the sales,” said Jason Yu, managing director of Kanta Worldpanel Greater China.

“Soybean milk started in China with just 30 per cent market penetration, but is growing fast because of a surge of new varieties with the ideas of ‘additive-free’ and ‘organic’, and the influx of foreign brands. Chinese consumers traditionally believe dairy milk is more nutritious but they are told plant-based milk is ‘healthy’.”