Feature News

    SHANGHAI, March 9 /PRNewswire-Asia/ --

    -- Chinese consumers cut spending further in February as uncertainty
       about the outlook for the economy and job security grows. Chinese
       consumer market has now reached a tipping point.

    (Logo:http://www.newscom.com/cgi-bin/prnh/20090309/CNM019LOGO )

45% of Chinese consumers reduced spending in February, an increase of 7% over January. Over 85% of consumers are now concerned about the outlook for the economy, while 26% of consumers are concerned about their own job security.

The DDMA Chinese Consumer Sentiment Index(TM) is based on a representative sample of 9,600 urban Chinese consumers aged 25 years to 45 years. The monthly survey is conducted across five cities.

Says Sam Mulligan, Director of DDMA, "The Chinese consumer remains very cautious in February. On one hand the decisive action by the government has calmed consumers and the longer term outlook for the economy has improved, however, 52% of consumers work in companies that are cutting costs, 27% work in companies that have recently laid off people and over 20% of consumers are working reduced schedules. These direct experiences undermine sentiment, create uncertainty and lead to a reduction in consumer spending. If consumers receive solid assurances they will resume spending, if economic uncertainty continues they will become more cautious and consumer spending will continue to decline."

Recently unemployed jumped 9% in this sample in February. Consumers are pessimistic about the outlook for the labor market over the next six months and are highly concerned about business conditions in their cities. However, the longer term outlook for the national and local economy improved considerably with 47% of consumers expecting the economy after 12 months to be good, an increase of 12% over January.

Consumers continue to reduce spending on non-essential items such as social entertainment (38%), branded clothing (34%) and branded cosmetics (26%). A high % will also defer purchases of housing, cars, laptop computers, mobile phones, TVs and household white goods. 13% have reduced expenditure on daily groceries.

             DDMA Chinese Consumer Sentiment Index February 2009
                   Feb Index                    Month Change
                      91                             -9

% of consumers that have reduced expenditure in Feb because of concerns about

                                 the economy
                                      45%
                                 +7% Jan 2009

                         Concerned about job security
                                      26%
                                 +5% Jan 2009

                            Have recently lost job
                                      12%
                                 +9% Jan 2009

                     Company has laid off people recently
                                      27%
                                 = Jan 2009

    Contact:

     Sam Mulligan
     Tel:   +86-21-6289-1138
     Email: sam.mulligan@ddm-asia.com