Germany
Global Overview
Project Background
In 2015, both HSBC Trade Winds and Global Trade Forecast
highlighted the importance of consumer demand in shaping
what products businesses offer. This supplementary campaign
is drilling down into this subject, in order to help businesses
around the world spot new opportunities and adapt.
Overview
HSBC’s Future of Consumer Demand
report looks at the changing nature
and role of the global consumer, and
the factors influencing their growth
and increased spending power. It
outlines what businesses must take
into consideration if they are to fully
understand what opportunities the
growing global consumer class presents.
As levels of absolute poverty continue to
fall in emerging and developing markets,
a larger ‘consumer class’ is being
created. Around 85% of the world’s
population is now considered to be a part
of the global ‘consumer class’ - those
who have an interest in and the ability to
‘consume’.
The report reveals that this growth in
the number of people able to consume
around the world is coinciding with
key demographic and cultural shifts,
including themes such as the changing
role of women, multi-generational
consumption and ethical considerations,
that will present new opportunities for
businesses. The key global themes in the
report are:
Who Are Consumers?
The report estimates that 90% of the
global population will be considered
consumers within the next 20 years
and the numbers of those living
in subsistence declining. Once a
consumer’s basic needs are met, they
think about purchasing a wider range of
goods and services.
When it comes to how they think
and feel, the research shows that the
importance people place on the balance
between leisure time and work is crucial.
In addition, the value they give to trusted
brands influences how individuals from
both advanced and emerging markets
buy. However, not all nations neatly
fit into their advanced and emerging
categories – individual cultures come
into play.
Technology and the power of data
Advances in digital technology, increasing
smartphone ownership - 6.1 billion
people will use a smartphone by 2020
- and growth in people ‘online’ have
revolutionised the way people access,
buy and pay for goods and services.
People now have more choice,
wider networks and can be more
discerning. Data is supporting greater
levels of insight about their needs and
preferences, and loyalty.
Transparency of business
With greater choice and access to
information, the digital revolution is also
allowing consumers to live out their
value system and use social media
to put ethics in the spotlight. Trust is
also essential to the growing sharing
economy – people choosing to exchange
goods or pay for temporary access rather
than owning them permanently.
Consumers in emerging markets appear
to place more importance on buying
trusted and reliable brands than those in
advanced markets.
The growth of middle-income
consumers
Defined as those that earn $10-$20 per
day, middle-income consumers currently
account for one in seven of the global
population. This is forecast to grow to
3.2bn middle-income consumers in
2020 and furthermore to 4.9bn a decade
later. This rapid growth, combined with
increased purchasing power and relative
economic stability, makes middle-income
consumers an important customer base
for businesses.
The growth of middle-income consumers
is particularly pronounced in emerging
markets and specifically in emerging
Asian economies. This economic shift is
significant because businesses will have
to consider the influence that cultural
differences will have on their operations
in these countries.
The rise of female consumption power
Women are playing an increasing role in
consumption related decisions. There
are several reasons for this. Women now
account for a greater part of the labour
force and their global earnings will rise to
$18 trillion by 2018 (up from $12 trillion
in 2010). There are also a range of social
and political trends re-orienting the role
and status of women towards equality.
As a result, women are showing
increasingly similar ‘buying’ behaviours
and attitudes to men, meaning
businesses must adopt a more
sophisticated approach to product design
and marketing to benefit from this strand
of changing consumer demand.
Generational consumption
The global population is often categorised
in generational groups, from Pre-War and
Baby-Boomers to the newly-emerging
Gen Z. With Millennials currently
dominating the agenda, businesses
could be forgiven for thinking they are
the only age group worth marketing to.
However, Baby Boomers and Gen X have
considerable purchasing power in both
developed and emerging markets.
One long-term demographic trend
dominates above all others – that of the
ageing population. Today there are more
than 900 million people aged 60 and
above in the world, and with ongoing
improvements in longevity this figure due
to rise to 2 billion by 2050.
In order to respond to these shifts,
businesses need to ignore misleading
stereotypes, and instead look at how
they can meet the specific needs of this
cohort by allowing their products to be
customised, personalised and tailored to
each of their target demographics.
Germany Overview
Who Are Consumers?
Type of Market
Population Age
Trust in national
business
Trust in multinational Internet & e-Commerce
business
Advanced
Old (21.2% of population over 65)
Low
Very low
•High internet penetration, three
quarters of the population has
bought something online, one
fifth has bought something via
mobile (We Are Social Data)
1. Summary
The German market is very leisure oriented, however it suffers from very low levels of
confidence in business leaders both domestically and abroad, which results in German
consumers being interested in reliability above all other qualities of a brand and only half of
consumers expressing interest in novelty/trying new products or services.
The German consumer is cautious and does not necessarily prize adventure of an exciting
life – only one third of Germans disagreed with this,
Germany has the 2nd highest levels of online purchases globally, having only been
surpassed by South Korea.
2. Work and Leisure
Like most advanced markets in the study, Germany is a very leisure oriented society, with
the role of work decreasing year on year.
While more than 7 in 10 respondents considered work important or very important, this
was surpassed by leisure, which 90% of respondents said they valued.
Work-leisure Importance Ratio across all countries
100%
90%
85%
96%
94%
94% 92% 92%
93% 91%
91% 90% 90%
90% 89% 90% 91%
89%
89%
89%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Work is important
Leisure is important
Source: TGF Data, 2015
Source: TGF Data, 2015
TGF data also reveals that 61% of Germans were satisfied with their current
job, a number higher than the average of just below 50% for all advanced
markets.
2
HSBC Commercial Banking The Future of Consumer Demand – GERMANY
% of respondents who are satisfied with their job
Work is important
Leisure is important
Source: TGF Data, 2015
TGF data also reveals that 61% of Germans were satisfied with their current
job, a number higher than the average of just below 50% for all advanced
TGF data also reveals that 61% of Germans were satisfied with their current job,
markets.
a number higher than the average of just below 50% for all advanced markets.
% of respondents who are satisfied with their job
100%
90%
88%
75%
80%
69%
70%
66%
62%
60%
61%
59%
58%
58%
58%
57%
53%
52%
50%
49%
48%
47%
42%
40%
32%
30%
20%
10%
0%
Source: TGF Data, 2015
Source: TGF Data, 2015
Germans were not big holiday takers, averaging 2.15 short breaks and 1.30
Germans were not big holiday takers, averaging 2.15 short breaks and 1.30 long
long holidays per year.
holidays per year.
3. Attitudes and Trust
Trust in both national and multinational business leaders in Germany is very low.
2. Attitudes and Trust
Trust in both national and multinational business leaders in Germany is very
low.
% of respondents who trust the following at least a little
60%
50%
40%
30%
22%
20%
14%
10%
0%
National business leader trust
Multinational business leader trust
Source:
TGF Data, 2015
Source: TGF
Data, 2015
According to 2015 TGF data, the German consumer is relatively cautious and
does not like to take risks – less than one third of respondents stated that
taking risks and adventure was important to them.
HSBC Commercial Banking The Future of Consumer Demand – GERMANY % of respondents who stated adventure and taking risks is
important to them
3
10%
0%
National business leader trust
Multinational business leader trust
Source: TGF Data, 2015
According to 2015 TGF data, the German consumer is relatively cautious and
does not like
to take risks
less than
third the
of respondents
that taking
According
to– 2015
TGFone
data,
German stated
consumer
is relatively cautious and
risks and adventure
was
important
to
them.
does not like to take risks – less than one third of respondents stated that
taking risks and adventure was important to them.
% of respondents who stated adventure and taking risks is
important to them
80%
70%
70%
60%
50%
50%
60%
55%
47%
40%
40%
59%
41%
47%
46%
32%
57% 57%
54% 54%
44%
50%
30%
30%
20%
10%
0%
Source: TGF Data, 2015
Source: TGF Data, 2015
4. Brand
Preferences
German
consumers most care about reliability and trustworthiness in brands,
3.almost
Brand
preferences
German
consumers
most
about reliabilitystating
and trustworthiness
in brands,
with
6 in care
10 respondents
it is important
for a with
brand to be
almost 6 in 10 respondents stating it is important for a brand to be reliable. 4 in
reliable. 4 in 10 consumers would like to buy ethically, while under a third are
10 consumers would like to buy ethically, while under a third are invested in their
invested
in their
preferred brand being fashionable.
preferred
brand being
fashionable.
Brand preferences, Germany
0%
10%
20%
30%
40%
50%
60%
70%
Buying trusted, reliable brands is important to me
Buying the latest, fashionable brands is important to me
Buying products and services ethically is important to me
Source: TGF Data, 2015
Source: TGF Data, 2015
That being said, half of German respondents considered it important to be
able to try new products and services.
% of respondents who consider it important to try new
products and services
4
90%
70%
HSBC Commercial Banking The Future of Consumer Demand – GERMANY
77%
80%
76%
70%
65%
70%
73%
70%
64%
0%
10%
20%
30%
40%
50%
60%
70%
Buying trusted, reliable brands is important to me
Buying the latest, fashionable brands is important to me
Buying products and services ethically is important to me
Source: TGF Data, 2015
That being said, half of German respondents considered it important to be able to
try new products
and services.
That being
said, half of German respondents considered it important to be
able to try new products and services.
% of respondents who consider it important to try new
products and services
90%
77%
80%
70%
73%
70%
70%
65%
64%
55%
60%
50%
76%
70%
50%
48%
55%
50%
53%
61%
56%
55%
46%
40%
30%
20%
10%
0%
Source: TGF Data, 2015
Source: TGF Data, 2015
5. Digital
& e-Commerce
4. Digital
& E-Commerce
According to 2016 We Are Social Data, Germans were among the most likely
consumers
to purchase
items We
or services
online.Data, Germans were among the most likely
According
to 2016
Are Social
consumers to purchase items or services online.
Percentage of the national population who bought something
online in the past month (survey-based)
90%
80%
70%
60%
77%
74% 72%
68%
64% 62% 62%
60%
57% 57% 55%
53% 53%
50%
50% 48% 48%
40%
45% 44% 44% 44%
41%
37%
31% 29%
27% 27%
30%
23%
20%
10%
0%
Source: We Are Social Internet Use Report 2016
Source: We Are Social Internet Use Report 2016
The activity Germans were most likely to do online was banking, with 63% of
The activity
Germans
were
most
likely
do online
waswas
banking, with 63% of
respondents,
while the
activity least
likely
to be
doneto
online
in Germany
theofactivity
leaststating
likely they
to be
online in Germany was
buyingrespondents,
groceries, withwhile
just 15%
respondents
do done
this online.
buying groceries, with just 15% of respondents stating they do this online.
20% of Germans had made a purchase via a mobile device in the past
of Germans
had made
a purchase via a mobile device in the past
month,20%
according
to WeAreSocial
2016 data.
month, according to WeAreSocial 2016 data.
HSBC Commercial Banking The Future of Consumer Demand – GERMANY 5
For media enquiries or for further information
about the research please contact:
Kate Woodyatt
HSBC Global Communications
[email protected]
Or click on https://globalconnections.hsbc.com/
global/en/articles/consumer-demand
Note: Whilst every effort has been made in the
preparation of this report to ensure accuracy of the
statistical and other content, the publishers and data
suppliers cannot accept liability in respect of errors or
omissions or for any losses or consequential losses
arising from such errors or omissions. The information
provided in this report is not intended as investment
advice and investors should seek professional advice
before making any investment decisions.
Issued by HSBC Bank plc
8 Canada Square
London E14 5HQ
United Kingdom
www.hsbc.com
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HSBC Commercial Banking The Future of Consumer Demand – GERMANY