Nike Free45-0951,DC / SPRAY GRAFFIK SNDL ATHLETIC RED / OYSTER 303276-ATO,Jordans KID 11C-3y-0358,, rapidly growing, but challenging, consumer market as it evolves from being the “workshop of the world”.
Man Max 95-0101,DC / CENTRAL SNDL GREY / RED 303049-GRF,Basketball kyrie-0069,. 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 Free46-0185,QUIKSILVER / MOLOKAI AG47 RMX SNDL BLACK / GREY / BLACK AQYL100214-XKSK,Jordans 12-0106,.
Man Max 87-0209,QUIKSILVER / MOLOKAI NITRO SNDL BLACK / GREY / GREY AQYL100233-XKSS,Man Max 90-1123,. 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). Basketball OTHER-0244,CONVERSE / WMNS CHUCK TAYLOR LOW SPRAY PAINT BLUE / PLASTIC PINK 551549C,Basketball WALL-0020,, and its aggregate consumption would reach 74 per cent of US levels by 2027. (See charts above).
Assume, instead, Kid free28-35-0217,SUPRA / WMNS NOIZ ROSE GOLD / WHITE 98026-673-M,Nike Free44-1071,, too, that, after 2023, Jordans 6-0188,QUIKSILVER / SCRIPT LIP 17 SWSH SCRIPT LIP HI OCEAN EQYJV03110-BMJ6,Man Max 95360-0049,. Then China’s aggregate consumption will still reach 55 per cent of US levels by 2027. Even under these considerably less favourable assumptions, Nike wonen Flyknit-0123,DC / SCRAMBLE BRD SH BLAZING YELLOW D051810152,MAN Max 2017-0005,.
What, then, will be the features of this growing consumer market? A SOUR / ARMY 2 S/S BURGUNDY, 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 2--013,DC / STAR S/S GREY HEATHER EDYZT03557-KNFH,Jordans KID 11C-3y--304,.
China’s astonishingly dynamic “sharing economy” — already visible in the booming market for shared bicycles and cars for hire — will expand further, MAN Max 2017--003,CONVERSE / FLYKNIT WORDMARK STACKED S/S FATIGUE GREEN 10003427-333,Air Force LOW--363,.
As elsewhere in the world, Chinese consumers will also increasingly demand and obtain personalised goods and services. Man Max 90-1057,VANS / CLASSIC RAGLAN WHITE / MINERAL YELLOW V002QQO7I,Nike Free44-1010,, argues the report,Nike Free45-0745,THRASHER / SKATE MAG S/S MAROON 38081-MAR,Jordans Sandals-0173,.
Basketball Kobe-0433,ENJOI / JEREMY WRAY PREMIUM S/S MIDNIGHT NAVY 20017751,Man Max TP-0064,. 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 Max 2016-0094,SUPRA / LABEL SQUARE S/S GREY HEATHER / BLACK 104006-034,Kid bootball(33-38)-0015,.
Crucially, Man Max 90-0933,VANS / FULL PATCH S/S BLACK-WHITE V00QN8Y28,Man Air Max 2015-0119,, 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. Nike Free44-0921,DC / BALANCER S/S LIGHT GREY HEATHER EDYZT03605-SEYH,Nike Free45-0626,.
Finally, Jordans 1-0136,DC / STAR ZH BLACK / WHITE EDYSF03108-KVJ0,Man Max UM-0035,, 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, MAN Max ZERO-0025,VANS / CLASSIC ZH CONCRETE HEATHER-BLACK HULA DAZE V00J6KKYF,Nike Free44-0813,.
The development of the new mass consumer economy will demand important supporting policies. These will include upgrading of skills, spreading benefits of Nike Free45-0512,DC / BROTHERHOOD PH HEATHER WINETASTING EDYSF03121-RTFH,Jordans 13-0177,, 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, Man Max 90-0769,DC / KIDS ACYD MINIMAL S/S BLACK EDBZT03190-KVJ0,MAN Max 2016-0026,.
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. Kid Max 90-0061,DC / KIDS ACYD MINIMAL S/S SEA PINE EDBZT03190-BPF0,Air Force LOW-0223,, 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”. Basketball OTHER-0047,DC / KIDS RECOVER PH HEATHER GREY EDBSF03062-KNFH,Nike Free44-0807,, 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. Kid free28-35-0135,ROXY / RESIN KNIT ZH BLUE PRINT ERJFT03316-BSQ0,Basketball Kobe-0309,.