Chinese consumers, especially the younger ones, increasingly favor local brands, a Credit Suisse survey has found.
The bank, which released the Emerging Consumer Survey report Wednesday, found 19 percent of Chinese consumers surveyed saying local sportswear brands are worth paying for. That's an improvement from the 15 percent who said the same in 2010.
The study also found an overwhelming 87.4 percent of Chinese consumers preferring local home appliance brands the most. That's especially the case among consumers aged 18 to 29, with 90.7 percent of that group saying they like local brands most.
The survey interviewed 14,000 consumers face-to-face in eight emerging economies: Brazil, China, India, Indonesia, Mexico, Russia, South Africa and Turkey.
"Like it or not, China is becoming a major power globally and that makes the younger generation more proud about Chinese brands," said Charlie Chen, head of China consumer research at Credit Suisse.
Chen, speaking to reporters on the sideline of the Credit Suisse Asian Investment Conference, added that the trend may not hold for all consumer products. Infant formula milk and cars, for example, are areas where international brands are winning over local ones, according to Chen.
But the rise of local Chinese consumer brands has had a role in the country's "economic rebalancing" efforts to rely more on consumption spending for growth. In 2017, consumption accounted for 58.8 percent of China's economic growth, Reuters reported, citing data from the National Bureau of Statistics.
Many economists have said that's a trend that is likely to continue as the Asian economic giant moves away from its reliance on debt and capital to grow the economy.
Investing in China's consumer sector
It's not just local brands that are gaining market share in China, premium products are increasingly favored by consumers in the world's second-largest economy.
The "premiumization" effect can be seen in many aspects: People tend to eat and drink better, they want to wear better-quality clothes and spend more on travel, Chen wrote in a Tuesday note.
"Under these trends, we prefer beer, high-end baijiu and dairy in the consumer staple sector. These markets are more consolidated, so there is less competition and it is easier to translate product upgrade into profitability," Chen wrote.
Stocks that Credit Suisse likes include China Resources Beer, beverage maker Wuliangye and dairy products company Mengniu that are in the consumer staples segment, Chen noted. The bank also likes stocks in consumer discretionary, such as QD Haier, Haier Electronics and Midea, which would benefit from the increase in personal income in China.