---
title: "Another Wave of Upgraded Wave Consumption Is Coming, and a Huge Market Is About to Be Born"
description: "An upgraded wave of consumption is coming, characterized by what Nongfu Spring's boss Zhong said: refuse mediocrity, refuse the nouveau riche. According to Ali Research, there are now two types of new consumer groups: one is upper-middle-class and affluent consumers, whose spending power will account for 81% of urban consumption growth in the coming years; the other is the new generation of consumers, including post-80s, post-90s, and the upcoming post-00s, who will bring 65% of overall consumption growth. According to Fosun Research: China's GDP growth in the next few years will be only 6%-7%, but the consumer market will grow by 10%-11%, and the health industry by as much as 16%-17%."
author: "刘春雄"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-01-30"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/another-wave-of-upgraded-wave-consumption-is-coming-and-a-huge-market-is-8c0c67b5/"
markdown: "https://xinjignxiao.com/en/articles/another-wave-of-upgraded-wave-consumption-is-coming-and-a-huge-market-is-8c0c67b5.md"
original_source: "https://mp.weixin.qq.com/s/8Hf1pWiqT527RR-7tzYP9g"
translation: "https://xinjignxiao.com/zh/articles/%E5%8F%88%E4%B8%80%E6%B3%A2%E5%8D%87%E7%BA%A7%E7%89%88%E6%8E%92%E6%B5%AA%E6%B6%88%E8%B4%B9%E6%AD%A3%E5%9C%A8%E6%9D%A5%E4%B8%B4-%E4%B8%80%E4%B8%AA%E5%B7%A8%E9%87%8F%E5%B8%82%E5%9C%BA%E5%8D%B3%E5%B0%86%E8%AF%9E%E7%94%9F-8c0c67b5.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/another-wave-of-upgraded-wave-consumption-is-coming-and-a-huge-market-is-8c0c67b5/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# Another Wave of Upgraded Wave Consumption Is Coming, and a Huge Market Is About to Be Born

> An upgraded wave of consumption is coming, characterized by what Nongfu Spring's boss Zhong said: refuse mediocrity, refuse the nouveau riche. According to Ali Research, there are now two types of new consumer groups: one is upper-middle-class and affluent consumers, whose spending power will account for 81% of urban consumption growth in the coming years; the other is the new generation of consumers, including post-80s, post-90s, and the upcoming post-00s, who will bring 65% of overall consumption growth. According to Fosun Research: China's GDP growth in the next few years will be only 6%-7%, but the consumer market will grow by 10%-11%, and the health industry by as much as 16%-17%.

An upgraded wave of consumption is coming, characterized by what Nongfu Spring's boss Zhong said: **refuse mediocrity, refuse the nouveau riche.**
According to Ali Research, there are now two types of new consumer groups:
One is upper-middle-class and affluent consumers, whose spending power will account for 81% of urban consumption growth in the coming years;
The other new consumer group is the new generation of consumers, including post-80s, post-90s, and the upcoming post-00s, who will bring 65% of overall consumption growth.
According to Fosun Research: China's GDP growth in the next few years will be only 6%-7%, but the consumer market will grow by 10%-11%, and the health industry by as much as 16%-17%.
The consumption upgrade of new consumer groups will be the biggest opportunity for China's consumer goods market in the coming years.
China's industrial upgrade will create a market capacity that will shock the world.
**Good news, bad news?**
Good news and bad news, which would you pay attention to first?
I found that the above question is actually hypothetical; there is no such thing as "good news and bad news," only "good news or bad news." In some people's eyes, all news is good news; in others' eyes, all news is bad news.
This depends on the state they are in at the time.
In Ma Yun's eyes now, all news is good news, no bad news. Even bad news, he will see from another angle as good news. For example, he said, "It's not that the retail industry is bad, but that your retail industry is bad."
In the eyes of stock investors making money, falling stock prices are good news because they can build positions; rising stock prices are also good news because they can sell and cash out.
Different interpretations of good and bad news can show whether a person has a problem mindset or an opportunity mindset. Futurist Naisbitt said: Success is not because you solved problems, but because you seized opportunities.
**Solve problems, or seize opportunities?**
Today, from the perspective of traditional enterprises, I'll talk about one piece of good news and one piece of bad news.
The bad news is that e-commerce began to explode in 2012, eroding traditional territory. This is good news for Ma Yun, but bad news for traditional enterprises. Because traditional enterprises are held hostage by existing stock, it is bad news.
The good news is that industrial upgrading has begun, but it is happening quietly.
One piece of good news, one piece of bad news, which one prevails? For individuals, it may depend on specific circumstances, but for society as a whole, bad news must prevail. The media industry in Europe and America is well-developed, and there is more bad news than good news because bad news has more "market" than good news. So the media industry is happy to sell "bad news."
Is industrial upgrading good news or bad news? Some think it is bad news because old products are not moving. This is still being held hostage by the existing stock of old products. Bystanders generally think it is good news because they can sell more profitable products.
If industrial upgrading is too abstract, let me make it more specific: it is the upgraded wave consumption.
In the past, the consumer goods industry benefited from China's explosive imitative wave consumption. This time it is an upgraded version of wave consumption. Isn't that good news? And I want to tell everyone that the increment of the upgraded wave consumption will create a consumer market equivalent to the current one within five or six years.
**First, let's talk about wave consumption**
In 2015, the central government called China's consumption wave over the past 30-plus years imitative wave consumption, and it was one of the three major engines of China's economic development.
When I first heard this term, I was amazed: it's so vivid! This is a concept I have always wanted to express, but never so vividly.
**Imitative wave consumption expresses several meanings:**
First, consumption is imitative; there are consumption benchmarks abroad, so the goal is clear;
**Second, it is condensed consumption history**, completing in more than 30 years what took industrialized countries hundreds of years, so the growth rate is very high;
Third, it is wave after wave, that is, one industry after another reaches a climax, so it is continuous. For example, the home appliance industry was the first wave and matured earliest;
Fourth, it is undifferentiated consumption, meaning consumers have little difference and reach the consumption capacity for a certain category at the same time. Previously, they had no consumption capacity, but suddenly they all did, and consumers consumed almost simultaneously, so it was explosive;
Fifth, during the first round of wave consumption, due to long-term deprivation, there was overconsumption. So, when the first round of wave consumption ends, some industries will see a decline in quantity.
Look at the characteristics I summarized: clear goals, high growth rates, continuous, and strong explosive power. It seems that consumption with wave characteristics is really good!
Now, it seems that the first round of wave consumption has ended. The sign is that industries have entered a state of concentration, with a large number of small and medium-sized enterprises dying, frequent mergers and acquisitions, and ultimately forming an oligopoly pattern. Of course, industries with national characteristics are exceptions.
**The Lost Five Years**
Chinese consumer goods companies have been inactive for about five years. Five years ago, marketing expert Jin Huanmin severely criticized a leading instant noodle company, criticizing it for "not upgrading products upward" but "pushing prices down to drive competitors to extinction," because going upward "can create a larger industry space." Mr. Jin's view was that leading enterprises should bear the responsibility of revitalizing the industry.
Mr. Jin's criticism was not of individual companies, but of the overall phenomenon in China's consumer goods industry. It can be said that after 2010, China's marketing entered the "lost five years."
**Upgraded Wave Consumption**
During the wave consumption period of each industry, the growth rate of a single industry was as high as 20% or even higher. Although the new round of wave consumption may not reach such high growth rates in a single industry, the wave periods of industries overlap, so the overall growth rate is still very high.
Why didn't most industries immediately enter the second round of wave consumption after the first round ended? Mainly because China's wave consumption is a relay between industries; when one industry just ends, another immediately begins, forming wave after wave.
Why do I predict a new wave? Is the new round of consumption necessarily wave consumption? In fact, wave consumption has a premise: it is imitative. If China's consumption has not yet finished imitating, as long as there are imitation targets, and as long as consumption has great synchronicity, it will definitely be wave consumption.
Why will there be a new round of wave consumption? Mainly because new consumption subjects, new consumption awareness, and new consumption capacity have emerged.
Classic marketing theory tells us that market = consumer population + purchasing power + purchase desire. Now, the three elements that determine market capacity and quality have all changed. Specifically, I think it is the change in new consumption subjects, new consumption awareness, and consumption capacity.
**New Consumption Subjects**
First, let's talk about new consumption subjects. According to Ali Research, there are now two types of new consumer groups:
One is upper-middle-class and affluent consumers, whose spending power will account for 81% of urban consumption growth in the coming years. That is to say, the future urban consumption increment will mainly be upgraded consumption;
The other new consumer group is the new generation of consumers, including post-80s, post-90s, and the upcoming post-00s, who will bring 65% of overall consumption growth.
The consumer market increment is so concentrated in these two groups, indicating that they are the mainstream and main body of future consumption, and future product development will mainly target these two types of consumers.
Since such a high share of future increment is concentrated in these two groups, we must pay close attention to their consumption behavior.
**New Consumption Awareness**
Next, let's talk about consumption awareness. In the past, the consumer market was called two-pole consumption.
One is low-end consumption, mainly "double low" consumption of low quality and low price. This was the mainstream, solving the long-standing "contradiction between consumption hunger and insufficient consumption capacity." It's like a starving person who can't help but eat anything;
The other is conspicuous luxury consumption, including some nouveau riche luxury consumption, which is tasteless luxury consumption, and also includes some people with not-so-high incomes who occasionally splurge. In symbolic consumption areas, such as Apple phones, this type of consumption is more obvious.
Two-pole consumption is sometimes called "middle collapse," meaning there is no middle-class consumption. This is a huge difference between the Chinese market and developed country markets. This can also explain why most multinational companies fail in China, mainly because the main target of multinationals is the middle class, and China precisely lacks this type of consumption.
The middle class is not only an income concept, but also a self-identification label. Specifically, most Americans, including the rich and the poor, consider themselves middle class. In China, regardless of income level, people were only classified as poor or nouveau riche.
The middle class is not only an income concept, but also a self-identification awareness concept. After the post-80s entered the consumer market, this phenomenon became especially obvious.
The post-80s are China's first generation of only children. Although China has a tradition of criticizing "each generation is worse than the last," when the post-80s had not yet entered the consumer market, they were viewed by society as highly rebellious or even a lost generation (although far from it after entering society). They are the "moonlight clan" and the "gnawing old clan"; they are the mainstream consumers of imported food. In short, they do not have middle-class income, but they have already implemented middle-class consumption. They do not consume based on their own income, but control the consumption of three families (both parents' and their own).
The emergence of the post-80s marked the awakening of China's middle-class awareness. China's division of people by era started with the post-80s; the 60s and 70s generations were retroactively recognized after the post-80s appeared.
**New Consumption Capacity**
Finally, let's talk about consumption capacity. China is a high-saving country. High savings mean potential consumption capacity, but because of consumption awareness, consumption capacity has not been fully released. In contrast, after the financial crisis, the US savings rate is still a pitiful 1%.
China's net savings rate is as high as 42%. This consumption potential combined with consumption awareness is consumption capacity. I recently went to Sanya for a vacation and found that among the vacationers (not tourists, but vacationers), there were especially many post-80s, many of whom were on vacation with loans.
Having said that, I need to go back to consumption awareness. Many people say China's high savings rate is because income insecurity, but now the job market has been short of talent, employees dare to change jobs frequently, and the social security of the post-80s is very different from the previous generation. This will also affect consumption awareness.
The combination of new consumption subjects, new consumption awareness, and consumption capacity will create a huge new middle-class consumption market. According to Fosun's forecast, China's GDP growth in the next few years will be only 6%-7%, but the consumer market will grow by 10%-11%, and the health industry by as much as 16%-17%.
Therefore, China's economic downturn is manifested as overcapacity in upstream basic industries, and as industrial upgrading in downstream consumer industries.
Note that the 10%-11% growth in the consumer market has a premise: quantity is capped or even declining, and it will mainly manifest as quality growth and value growth, with "double middle" replacing "double low."
**Consumption Spillover**
If anyone doubts the upgraded wave consumption, just look at the shopping scenes of Chinese tourists in Japan. Chinese tourists, accounting for 1/4 of tourists, complete 40% of the consumption. It's just that consumption spills over abroad.
I don't know if I coined the term **consumption spillover**, but I find it very useful and can explain many problems. Because theories and predictions, many people don't believe them.
In 2015, there was a very eye-catching phenomenon that talked about the same issue, such as buying a toilet seat in Japan, so much so that Japan's keyword related to China in 2015 was "bakugai" (explosive buying). I think it's a discriminatory term, indicating abnormality.
Another concept is cross-border consumption, which was also very hot in 2015. Now, more than 100 million people travel abroad each year, spending an average of over 10,000 yuan per person, and tourists' purchasing power ranks first in the world.
These phenomena are typical consumption spillover. That is, China's purchasing power is not consumed domestically, but goes abroad. This round of consumption spillover is not the luxury consumption of the nouveau riche, but the normal consumption of ordinary people.
Why does consumption spillover occur? Mainly because domestic supply cannot meet demand. In recent years, e-commerce's low prices have attracted social attention, but in fact, it is held hostage by the so-called "diaosi" (losers), while those with real purchasing power lack attention. So, a few years ago, Jin Huanmin and I criticized Ma Yun for creating obstacles to China's industrial upgrading.
**Refuse Mediocrity, Refuse the Nouveau Riche**
In the past, consumption was two-pole: one was "double low" consumption based on subsistence, and the other was nouveau riche consumption based on showing off.
What is the mainstream of upgraded consumption? As Nongfu Spring's boss Zhong said: refuse mediocrity, refuse the nouveau riche.
What is the sign of industrial upgrading? In each industry, in a specific era, there is a widely accepted big single product, and other products are enrichments around this big single product. So, in 2014, Shi Xianlong and I proposed the concept of "mainstream gear shift."
Mainstream gear shift is proposed around the two types of emerging consumption forces proposed by Ali. In fact, it is typical middle-class and middle-class awareness consumer goods, completely different from traditional "double low" products.
Mainstream gear shift means that China's mainstream consumption will be basically on par with developed countries. In terms of price, it will be about double the current mainstream product price. So, even if consumption quantity is capped, due to price increases, the consumer market capacity will also double.
**Supply-Demand Mismatch, Rebuilding the Marketing System**
Some people say China's manufacturing capacity is poor, so product quality is not high. I think this is true in high-end manufacturing, but absolutely wrong in the consumer goods sector.
Most consumer goods in the world are produced in China, including quite a few luxury goods, so it is not a manufacturing capacity problem at all. Many products bought abroad are also made in China, so there is no consumer goods manufacturing capacity problem.
On the one hand, consumer goods manufacturing capacity is not a problem; on the other hand, purchasing power is not a problem either. So where is the problem? I think it is supply-demand mismatch.
The key to supply-demand mismatch is marketing capability. I have seen many companies that can indeed produce good products but just don't know how to sell them.
China's marketing system is built on the marketing capability based on "double low" products. Now it needs to transform to middle-class products, and the marketing system has problems.
How to solve this problem? I remember this problem also appeared after 1998. The best solution is to build an independent team within the marketing system, first cultivate the gear-shift products, and then merge. I call it "divide first, then merge."
Of course, the biggest factor in successful transformation is the boss. I suggest the boss personally take charge of the transformation. Transformation requires many resources, and only the boss can mobilize them, especially since the original system has been solidified. It's not just the sales system that has problems; the entire enterprise has problems.
**Integration of Domestic and Export Sales**
China's consumer goods manufacturing industry has always had a strange phenomenon: export sales is one system, basically not doing domestic sales. No brand, but quality is good; otherwise, there would be no "Made in China" dominating the world; domestic sales is another system, and domestic consumer goods brands have very low export share.
Export sales is dual-oriented by price and value, at least meeting Western bottom lines in quality. Domestic sales is typically price-oriented; as long as the price is low, quality can be broken through.
The separation of domestic and export sales has resulted in Chinese consumer goods having no brand; only products go to the world, not brands.
The new round of wave consumption means that China's mainstream products will basically align with Western developed countries, and domestic products can be directly exported. This is conducive to Chinese consumer goods brands going global.
**Window of Opportunity and Saturation Attack**
I particularly agree with Huawei's Ren Zhengfei's words: "Now there is a strategic opportunity. This is our major window of opportunity. We must dare to gather strength, invest intensively, and implement saturation attacks at strategic opportunity points."
The window of opportunity in China's consumer goods field has appeared. Do you dare to bet everything when the strategic opportunity point appears? This determines whether there will be a place for you in the future world.
**-END-**
The best learning platform for FMCG distributors in China
Focusing on providing professional, practical, and applicable tutorials for enterprises and distributors
Committed to helping Chinese FMCG distributors grow rapidly
**The most professional and practical knowledge base in the FMCG industry**
Reply with the red number below to get the corresponding content
Reply with number 1 to view the complete knowledge base
| **001** Excellent article selection | **002** Distributor market operation | **003** Terminal visit management | **004** Sales supervisor skills | **005** Sales improvement techniques | **006** Channel expansion | **007** Managing distributors | **008** Distributor development | **009** Distributor internal operations management | **010** Team management | **011** Efficient distribution techniques | **012** Sales manager's eighteen skills | **013** KA operation methods and strategies | **014** First lesson for new sales | **015** Internet, brands |
[Long press QR code to follow]


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671