According to a recent report, 20 percent of the ?newly rich? in China have annual household incomes of over RMB200,000 (US$24,700), with a range from RMB80,000 yuan (US$9,900) to 1 million yuan (US$123,500) a year.
The question for businesses is how to access these consumers, and turn them into customers. While they may be focused in the primary cities such as Beijing, Shanghai and Guangzhou, it is important to take local factors into account – In a Shanghai focus group of young consumers, iPods and advanced mobile phones were the must-have items. In Guangzhou, iPods were not considered important, but the mobiles had to have an MP3 player.
But it is not only the 3 top cities where people are spending on consumer products. A recent McKinsey survey of 6,000 households in 30 cities showed that:
- 8.5 percent planned to buy a new home within a year
- 8.1 percent planned to get a flat-screen television
- 2.4 percent planned to buy a car
The message? China has an active and growing group of consumers, but it is not a single market that can be approached simplistically. Cocmpanies need to understand regional differences, as well as the impact of different wealth profiles in smaller cities and rural areas.
China Business Services offers a range of market research, PR, strategy and business development services to assist companies access China?s growing consumer market. Contact us for details.
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