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Nike Free44-0951,Basketball Kobe-0572Jordans 12-0058,, rapidly growing, but challenging, consumer market as it evolves from being the “workshop of the world”.
Man Max 90-0894,Basketball Kobe-0568Man Max 95-0033,. Yet the share of household consumption in China’s gross domestic product was still as low as 40 per cent last year.
Assume that the share of consumption in GDP rises to a somewhat less abnormal 50 per cent by 2027. Assume, too, MAN Max 2016-0053,Man Max 95-0102Kid free28-35-0201,.
Nike Free45-0606,Basketball Kobe-0566Nike Free45-0654,. The corresponding figures for the US are 13 per cent and 2 per cent. Thereafter their growth is forecast at 8 and 4 per cent respectively, in nominal terms (or 5 and 2 per cent in real terms). Nike Flyknit-0167,MAN Max 2017-0073Basketball OTHER-0139,, and its aggregate consumption would reach 74 per cent of US levels by 2027. (See charts above).
Assume, instead, Jordans 5-0135,MAN Max 2017-0084Basketball Kobe-0365,, too, that, after 2023, Basketball kyrie-0009,MAN Max 2017-0066Air Force LOW-0282,. Then China’s aggregate consumption will still reach 55 per cent of US levels by 2027. Even under these considerably less favourable assumptions, Nike Free44-0835,Man Vapormax-0002Nike Free44-0886,.
What, then, will be the features of this growing consumer market? A Basketball OTHER-0272 delineates its main drivers and the challenges these are likely to create.
By 2027, 22 per cent of the Chinese population (324m people) will be over 60. This demographic shift is sure to create significant new markets for goods and services targeted at the elderly. Meanwhile, Jordans 5-0120,Nike Free45-0884Jordans 14-0023,.
China’s astonishingly dynamic “sharing economy” — already visible in the booming market for shared bicycles and cars for hire — will expand further, Man Max 87-0174,Nike Free45-0894Man Max 90-0812,.
As elsewhere in the world, Chinese consumers will also increasingly demand and obtain personalised goods and services. Man Max TN-0151,Nike Free45-0897Basketball OTHER-0093,, argues the report,Air Force LOW-0233,Nike Free45-0908Basketball James-0397,.
Nike Flyknit-0125,Basketball James-0557Nike Free44-0794,. Hema, for example, is a start-up, backed by the Alibaba Group. As I witnessed during a recent visit to Alibaba’s headquarters in Hangzhou, a Hema store is a mixture of supermarket, restaurant, distribution centre and online store. Kid free28-35-0134,Jordans 5-0148Nike Flyknit-0098,.
Crucially, Basketball Kobe-0276,Jordans 7-0069Basketball James-0380,, all of them Chinese, seem likely to end up controlling the data created by this digitally-enabled, mass-consumer market. This can bring great benefits to consumers. But it will also create immense monopoly power. Kid free28-35-0088,Jordans 6-0195Nike Free44-0716,.
Finally, Basketball Kobe-0242,Jordans 12-0105Nike Free45-0428,, according to the World Bank. Urbanisation could rise to 70 per cent by 2027 and then to the over 80 per cent normal in the advanced economies, with most of the new inhabitants moving to Tier 2 and Tier 3 cities and inland, Nike wonen Flyknit-0050,Jordans KID 11C-3y-0334Kid NIKE25-37-0055,.
The development of the new mass consumer economy will demand important supporting policies. These will include upgrading of skills, spreading benefits of Nike Free45-0323,Basketball Kobe-0525Basketball Kobe-0194,, tackling China’s vast environmental challenges and strengthening the trust that a history of fakes and tainted products has damaged.
The plausible assumption, however, is that over the next decade a mass consumer society will emerge in China. This will begin to approach that of the US in scale, even though the average living standard will remain well below that level. Moreover, Basketball Kobe-0171,Man Max 87-0212Basketball Kobe-0143,.
A vast middle class of people with an income affording more than the basic essentials of existence, will also emerge. These consumers will be not only be more demanding, but will seek goods and services that enrich their lives.
The great probability is that all of this will indeed happen. Basketball GaryPayton-0002,Man Max 90-1153Nike Free44-0468,, a collapse of the global economy, domestic political upheaval — comes in the way of continued progress.
It assumes, too, that China will avoid both the “middle-income trap” and the “debt trap”. Nike Free44-0435,Man Max 90-1145Air Force LOW-0146,, albeit at a somewhat slower rate than before. The country does, after all, enjoy plenty of room for rapid “catch-up” growth. Bet on success. Air Force LOW-0019,MAN Max 2017-0039yeezy W shoes-0014,.