Trading up? 消费升级

2019.11.22

Reader question:

Please explain this headline: Time to Trade Up to a New Smartphone. What does “trade up” mean exactly?

My comments:

In this case, it means, well, perhaps a new smartphone is on the market and marketers are encouraging you to buy it.

Buy it, that is, by selling your old one.

That’s what “trade up” means exactly.

Literally, trading up refers to a trade or exchange of something inferior for something better. In other words, it’s an upgrade, UPgrade, as in trading UP, signifying that the trajectory is upward instead of downward.

Yes, as you may guess, downward would suggest trading down, the opposite of trading up.

Parents in a Beijing suburb sometimes do such an exchange in search of better schooling for their children. You know, housing prices in the inner city can be exorbitantly high, prohibitively so sometimes. But for some who can afford it, they do so by selling their house in the suburb, add some money of their own and move into the inner city. Since the new house in the city is more expensive, people say they’re trading up to live in the city.

The house in the city may in fact be smaller in space than their old house in the suburb but it is far more expensive and so, coupled with the fact their child or children will have a better school nearer home, they consider this trading up.

A few years later, upon their child’s or children’s graduation from high school, they may trade up again by selling their city house and moving into the suburb again.

You think moving from the city to the suburb should be called trading down?

You’ve got a point, but the owner may insist that it’s trading up because, you see, now they have a bigger house in the suburb where the air is cleaner, etc.

So, let’s keep calling it trading up.

Staying positive is important, you know.

All right, no more ado. Here are media examples of trading up:

1. Don’t to know what’s on the menu for the Central Florida restaurant industry this year?

The answer can be summed up in one word: more.

More sales, more choices, more chains and more healthful offerings.

Thanks to the region's continued population growth and residents’ seemingly endless appetite for prepared meals, restaurant sales are predicted to be higher than the national average here and across the state in 2007.

“I think we’re going to be on fire here,” said Aaron Allen, chief executive officer of Heathrow-based Quantified Marketing Group, a restaurant marketing and public relations firm.

Allen projects sales to be up about 6 percent to 7 percent in Central Florida this year, which is commensurate with the 7.1 percent jump in sales forecast in Florida by the National Restaurant Industry.

To take advantage of the anticipated sales surge, a slew of new restaurants -- both chain and independent -- have announced plans to swing open their doors over the next 12 months.

Those include BJ’s Restaurant & Brewhouse and D’Angelo Grilled Sandwiches to name a few on the chain side. And a potential new bar and grill house look for Darden Restaurants’ Smokey Bones chain here may also be in the works.

Independent eateries expected to make a splash this year include MetroWest’s Satava, a high-end restaurant that will boast an eye-popping champagne list, and Stotter’s, run by Wolfgang Puck protege Chef Robin Stotter.

Consumers are trading up and buying more expensive items,” Allen noted.

- Slew of new restaurants to open in ’07 -- all competing for your dining dollar, OrlandoSentinel.com, January 8, 2007.

2. Once touted a barometer of consumer demand, lipstick appears to be losing its cachet as an economic indicator amid shifts in the market for beauty products, some analysts say.

The “lipstick index” is a term coined by former Estee Lauder chairman Leonard Lauder after the bursting of the dot-com bubble in the early 2000s sent the U.S. economy reeling. Lauder noticed that women substituted costlier luxury items for more practical indulgences like lipstick.

Since then, lipstick sales have become associated with consumer confidence, as rising sales of the product suggested consumers could be turning more cost-conscious in the face of a slowing economy. In fact, the CEO of French cosmetics giant L’Oreal cited the “lipstick effect” as recently as this week to account for buoyant demand in China.

“It’s the famous ‘lipstick effect’ — sometimes when people spend less on expensive items like cars or buying apartments, they have more available income and they like to indulge themselves with beautiful products,” CEO Jean-Paul Agon told CNBC this week. “It could be absolutely positive for us,” he added.

The lipstick industry is forecast to hit $17 billion in market value by 2023, according to marketing firm TechSci Research. However, in the face of a potential economic slowdown, the lipstick index’s reliability is being called into question, with the dynamics of the marketplace changing.

According to London-based research company Euromonitor, global lip products (which account for lipstick, lip gloss and liner) are projected to jump 18 percent between now and 2022 – even with global growth expected to taper off. And during the great recession, lip products actually fell by nearly 3 percent, according to marketing research company Mintel.

Experts say that the expected pickup in demand, combined with the 2007-2009 ebb in demand, undermine Lauder’s original thesis.

Meanwhile, the growing popularity of other beauty products are lessening the importance of lipstick sales as a bellwether. The market for beauty products actually grew during the great recession, and is projected to rise by 3 percent through 2020, according to analysts at Mintel research.

The last recession “actually helped to spur growth in the nail color and care category as women tightened spending and turned to more at-home nail care options, potentially in lieu of visiting the salon” said Alison Gaither, a Mintel analyst. In fact, nail products soared by nearly 12 percent during that time, she added.

Nail and lip products are just a fraction of the broader market for color cosmetics, which includes multiple makeup products and cosmetic sets, and is projected to notch more than $11 million in sales this year with a global value of $76 million, according to Euromonitor.

It suggests isolating lipstick sales as consumer weathervane is losing much of its usefulness. While beauty product growth is expected to be modest in the near-term, key categories like skin and body care, and color cosmetics have “a safety bubble,” according to Gaither.

Mintel’s recent analysis stated that innovations in the marketplace are keeping beauty sales afloat, even when the economy turns rough.

Consumers “may try a lower price product and then when they do have more income trade up to a brand in another,” Gaither said, adding that “overall there’s always loyalty to the category” – that’s more than enough to offset a drop in lipstick sales.

- Why lipstick isn’t as useful as an economic barometer as it used to be, CNBC.com, February 9, 2019.

3. Zion Williamson might not be the only Duke star that the New Orleans Pelicans land in this year’s draft.

Veteran basketball writer Peter Vecsey reported Wednesday that the Pelicans are engaged in an “all-out effort” to trade up to the No. 2 draft slot (currently occupied by the Memphis Grizzlies) in order to select RJ Barrett. Such a package would feature, among other assets, the No. 4 overall pick that they acquired in principle from the Los Angeles Lakers for Anthony Davis.

NOLA, I’m told, is assembling assets in all-out effort to leapfrog Knicks into second slot in order to snare RJ Barrett. Obviously, Pels are offering Grizz No 4 pick as part payment. No pity parties planned. NY would land Morant or Garland. Memphis would pluck point that drops…

— Peter Vecsey (@PeterVecsey1) June 20, 2019

The Pelicans also hold the No. 1 overall pick and are all but guaranteed to select Williamson, who played with Barrett at Duke.

Barrett himself has a different destination in mind, but the opportunity to run it back with his old teammate in New Orleans might just be enough to win him over if the Pelicans can somehow pull this off.

- Report: Pelicans in all-out effort to trade up for RJ Barrett, LarryBrownSports.com, June 19, 2019.

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About the author:

Zhang Xin is Trainer at chinadaily.com.cn. He has been with China Daily since 1988, when he graduated from Beijing Foreign Studies University. Write him at: zhangxin@chinadaily.com.cn, or raise a question for potential use in a future column.

(作者:张欣 编辑:丹妮)

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