While the US economy is stumbling into recession, China’s retail spending, fueled by a burgeoning middle class, is on the rise. In 2007, China saw a 17 percent growth in its retail market, and there is no sign of slowing down.
According to a BusienssWeek article by Shaun Rein, much of this growth is coming from the young consumers. He wrote:
My firm, the China Market Research Group (CMR), conducted in-depth interviews with 500 Chinese between the ages of 22 and 32 in 10 cities to gauge whether fears of a global slowdown would influence their shopping habits. The answer was a resounding no. A full 90% of interviewees said they expected to “spend considerably more” in 2008 than they did in 2007, and the vast majority was “very optimistic” about salary potential in the next two years, with the majority expecting salary increases of 10% to 25% in next year.
This group of people, born in late 1970s to 1980s, grew up in an increasing prosperous China. They are wildly optimistic about the country’s future. Unlike their parents’ generation, they are not interested in saving. Many of them use credit cards and spend their future money – because of their confidence in the economy.
I was really intrigued when a 24-year-old young woman, who was making a monthly salary of 4,800 yuan ($700), told me that she planned to spend her 2007 Christmas in Paris, and play golf in Bali! I wonder how many of these are what she really wants and how many of these she wants because they are “cool.” But one thing is for sure: not only have these young consumers become the core market for multinationals, they have also made a centuries-old China young.