The Summit gathers entrepreneurs, venture capitalists, and industry luminaries to examine how Chinese firms have evolved from copycats to innovators, and what impact they will have on the rest of the world.
In fields from gene editing to big-data analytics to 5G mobile telephony, Chinese experts are now among the world’s best. Sunway TaihuLight (pictured), a supercomputer made using only local computer chips, is five times as fast as the best American rival…. WeChat, a social-media and payments platform with 700m monthly active users, is more useful and fun than Facebook, Twitter and WhatsApp put together.
The Chinese economy may have slowed down, but Chinese consumers haven’t. In 2015, consumer spending increased approximately 13 percent, compared to less than 7 percent growth in GDP.
A recent McKinsey report indicates that Chinese consumers have remained confident despite the economy slowing down. Among the 10,000 individuals surveyed by McKinsey, 55 percent expected their incomes would increase significantly over the next five years, compared to just 32 percent of consumers in the United States and 30 percent in the United Kingdom believed so.
The Chinese middle class now represents one-half of China’s population. Although they are new consumers, they are maturing and modernizing rapidly. Three characteristics are emerging: Continue reading →
The Chinese middle class, now estimated at more than half a billion strong, has become a key driver for the country’s economy.
The newly released data indicates that China’s retail sales grew more than 11 percent in 2015, despite economic slowdown. Consumer spending was one of the brightest spots in the Chinese economy, which is now $10 trillion in size, and registered a 6.9 percent growth last year.
Rapid income growth over the last decade has made Chinese consumers an increasingly powerful force, snapping up Apple iPhones, Tiffany diamonds and Toyota sedans.
Urban household incomes increased more than 8 percent, the new data shows. China also added 13 million jobs last year, exceeding the government target of 10 million, thanks to the booming service sector.
The unemployment rate was at 5.2 percent, about the same as the United States.
While investment in fixed assets slowed, the residential housing market is rebounding. The data also shows that “home-price recovery spread to more cities in December, especially smaller ones.”
In the first article, author Laurie Burkitt wrote that China’s economy will be relying heavily on “yuppies” – young urban professionals:
According to a new study from the consultancy the Boston Consulting Group and Alibaba’s Aliresearch, richer, younger and tech-savvier Chinese will be the main drivers of growth in the country’s consumer economy going forward. Affluent consumers, shoppers under the age of 35 and Internet surfers will push China’s consumer market up to $6.5 trillion in sales by 2020.
This projection is based on GDP growth at only 5.5% (compared to nearly 7% currently). I am not surprised. For years, I have been saying that the rise of the Chinese middle class is the biggest story of our time. Continue reading →
After Mattel’s embarrassing closure of its flagship store, the House of Barbie, in Shanghai two years ago, the American toy maker seems to have learned a thing or two about the Chinese market.
Its newly launched “Violin Soloist” Barbie aims to target Chinese parents who want their daughters to be “geniuses,” just like any self-respecting tiger mom would. The doll has a traditional Barbie look – blonde, blue eyes and dressed in glamorous hot pink. In addition to her five-inch high heels, she even has a violin!
At first glance, it’s hard to imagine that a Barbie like this would appeal to Chinese girls. Don’t they want dolls that would look more like them – black hair, brown eyes and round face? Continue reading →
Recently, I was interviewed by The Wall Street Journal about how American toy-maker Mattel misread feminism in China. As the result, it had to close its flagship store, the House of Barbie, in Shanghai, and threw away over $30 million investment.
Since then, Mattel seemed to have learn a thing or two about the Chinese market. The Wall Street Journal article indicates that the company is making new efforts in China.
The Chinese toy and games market has been growing at 14% in the last five years. The demand will continue to be strong as growing Chinese middle class families want to give their children the best. And, they have the disposable incomes to do that.
There are still opportunities for Mattel to get it right in China. I will soon have an article on Forbes.com to comment on Mattel’s newly launched Barbie “Violin Soloist.” Stay tuned!
Recently, I was interviewed by Travel Weekly, a national newspaper of travel industry, on increasing Chinese travelers and how they affect the travel industry in the U. S. Below is an excerpt of my conversation with Diane Merlino, editor in chief of Travel Weekly PLUS:
Merlino: How do you define the Chinese middle class? Wang: Chinese middle class households earn between $10,000 and $60,000 a year, but those figures can be misleading because the cost of living in China is very different from what it is the West. In the U.S. you can’t even get by on $10,000, but in China $10,000 is the beginning of having a lot of purchasing power in certain areas, especially in smaller cities. In Shanghai, the cost of living is quite high; that’s why there is that range in income.
So, the rule of thumb I use is a family is considered middle class in China if the household has a third of its income available for discretionary spending.
Merlino: Give us an idea of the size of the Chinese middle class and the growth rate of that demographic. Wang: Five years ago, when my book first came out, the Chinese middle class was estimated at 250 million to 300 million people. Today, the middle class has reached an estimated 450 million people, and we’re projected to reach 800 million middle-class Chinese by 2025.
Merlino: How important is travel to the Chinese middle class?
Wang: A lot of Chinese have a desire to travel because China was closed 30 or 40 years ago. Very few people traveled during that time, but now that China is opening travel, to go see the world is a life goal for a lot of people. The younger generation, those in their 20s and 30s, are traveling a lot. If they have less money, they travel within China, but now when I travel around the world I see so many younger Chinese. It’s amazing. Continue reading →
Eight years after Burger King first entered the China market in 2005, the world’s second largest burger chain restaurant has only 63 restaurants in the country, falling far short of its own plan of opening 250 to 300 restaurants by 2012.
Many analysts pointed to Burger King’s uphill battle with its competitors. Both Yum! Brands and McDonald’s entered China much earlier and both have established significant presence in the country. Yum! China has more than 4,000 KFCs and 750 Pizza Huts, in addition to its China-based units East Dawning and Little Sheep. McDonald’s China division has more than 1,500locations.
However, there is plenty of demand for more than two big American restaurant chains in China’s $29 billion fast food market, thanks to a growing Chinese middle class. Here are a few things Burger King can do to catch up:
Myth that Chinese Don’t Eat Beef
Burger King has failed to play up the advantages of its traditional beef dishes. Instead, it added chicken burgers, believing Chinese prefer chicken to beef. The reason many Chinese consume more pork and chicken is because they are more affordable and readily available. Chinese farmers typically raise pigs and chickens to sell in the market, while cows are used mainly for farming.
The truth is that Chinese consumers consider beef a quality meat because it has less fat. Continue reading →
As 2012 comes to an end, pundits and analysts alike are making predictions for 2013. Many things could happen in 2013, but one thing is almost certain: China will be the largest e-commerce market in the world. Already, the country has the largest population of online shoppers. In June 2012, people who shopped online in China reached 210 million, compared 179 million in the United States.
Chinese consumers have always been a mystery to many Western companies. Little is known about their spending behavior and buying habits. As they come of age, certain characteristics are starting to emerge. Here are five new trends of Chinese consumers:
A quintessential trait of Chinese consumers is that they are value seekers. They will search hard for the best deals, to make sure they get good value for their money. That means they will spend a lot of time researching products and comparing prices. They tend to resist impulse buying (despite some conspicuous spending), and are more likely to get cues from their friends as to which products to buy.
This trait actually applies to both high- and low-income groups, although it is more apparent in consumers with lower incomes. I know this intuitively, and from first-hand experience. Having lived in the West for over 20 years, I am still “good at saving money” (as my husband put it) when it comes to a purchase. For example, I eyed a giclee painting from ZGallerie for several months before I bought it on sale. I searched on the Internet for comparable paintings, and was willing to wait for holiday sales to make the purchase.
I am not the most frugal person you can find in the world, but like most Chinese, I am naturally good at finding good deals. Continue reading →