Jordans 1-0052,DC / ROSEMARK SHORT BLACK STORM JACQUARD EDYFB03034-KVJ1Man Max 87-0219,, rapidly growing, but challenging, consumer market as it evolves from being the “workshop of the world”.
MAN Max 2017-0084,DC / KIDS ACYD BALL S/S BLACK EDBZT03205-KVJ0Nike Free46-0193,. 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, Nike Free46-0202,DC / KIDS STAR ZH SUMMER BLUES EDBSF03039-BRA0Jordans 13-0206,.
Basketball Kobe-0540,DC / KIDS WANDERER S/S SNOW WHITE EDBZT03172-WBB0Man Max 90-1117,. 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). Man Max TP-0070,DC / KIDS REBUILT 2 S/S CHILI PEPPER EDBZT03163-RRD0Basketball WALL-0010,, and its aggregate consumption would reach 74 per cent of US levels by 2027. (See charts above).
Assume, instead, Basketball Durant-0289,DC / KIDS STAR ZH BLACK / YELLOW EDBSF03039-KVJ0Nike Free44-1077,, too, that, after 2023, Basketball Hyperdunk-0140,BURTON / KIDS BASE CAMP SHORT TRUE BLUE 288428Basketball Kobe-0483,. Then China’s aggregate consumption will still reach 55 per cent of US levels by 2027. Even under these considerably less favourable assumptions, Man Max Lunar-0063,DC / KIDS STAR ZH BLACK / LEMON CHROME EDBSF03059-XKKYBasketball Rose-0108,.
What, then, will be the features of this growing consumer market? A DC / KIDS BASEMENT PH HEATHER GREY EDBSF03044-KNFH 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, MAN Max 2017-0029,DC / KIDS STAR PH BLACK / WHITE EDBSF03038-XKKWBasketball James--163,.
China’s astonishingly dynamic “sharing economy” — already visible in the booming market for shared bicycles and cars for hire — will expand further, Jordans 14--030,ROXY / COZY RIDE PH BLUE PRINT ERJFT03351-BSQ0MAN Max 2017--002,.
As elsewhere in the world, Chinese consumers will also increasingly demand and obtain personalised goods and services. Man Shox TURBO--007,JORDAN / KIDS JORDAN ECLIPSE CHUKKA WOVEN GYM RED / BLACK 881461-601Man Max 90-1021,, argues the report,Nike Free44-1026,DC / KIDS REBOUND BLACK / BLUE / WHITE 302676B-XKBWNike Free45-0689,.
Basketball James-0524,SUPRA / KIDS SKYTOP GREY / BLACK / WHITE S13039K-GBWJordans KID 11C-3y-0301,. 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. Man Air Max 2010-0078,DC / KIDS SNAPPY SNAP BLUE MOON ADBHA00008-BLP0Basketball kyrie-0035,.
Crucially, Man Air Max 2015-0125,GARAGE / KIDS JK406 BLACK / PEACE JK406Man Max LTD-0012,, 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. Man Max 90-0942,HAND SPINNER / BASIC GREEN / BLACKMan Air Max 2010-0066,.
Finally, Nike Free45-0594,GARAGE / ML6665B BLACK / SILVER ML6665BNike Flyknit-0160,, 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, Basketball OTHER-0141,GARAGE / VO3172 BLACK / GREEN VO3172Basketball Kobe-0362,.
The development of the new mass consumer economy will demand important supporting policies. These will include upgrading of skills, spreading benefits of Max Flyknit-0054,GARAGE / VO3161 BLACK / BLACK VO3161Air Force LOW-0289,, 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, Nike Free44-0885,GARAGE / A-Z16403B MATTED BLACK / ORANGE A-Z16403BBasketball Kids5-7-0052,.
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. Jordans flight-0048,MY I / 41:04 P7 MATTED BLACK / PINK-ORANGE 41:04 P7Man Max 90-0780,, 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”. Man Max 90-0863,VANS / BOYD II WALLET HEATHER SUITING VA31J7KH7Kid Max 90-0059,, 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-0236,DC / TEARBAIT TRUCKER BLACK ADYHA03349-KVJ0Basketball OTHER-0037,.