Rising incomes across Asia have spawned a huge new generation of consumers, with the largest growth coming from China: China's employed population exceeds the combined employed populations of Europe and the US. This employed population refers to 'China's mainstream consumers.' As their numbers and quality grow, their consumption demands and preferences will have a significant impact on the global economy. Profile of China's Mainstream Consumer Groups The purchasing power of China's mainstream consumers is not as strong as perceived by the outside world: of China's 770 million employed people, only 2% have incomes reaching the level for individual income tax, and only about 11% of China's population can be defined as 'middle class.' Meanwhile, their daily consumption averages only $7, compared to $97 for the average US consumer. This 'strength' is more about external confidence in China's macroeconomic development and expectations of consumption pattern shifts. Of course, such a large consumer group cannot be summarized by a single description. The report divides them into four distinct groups from a socio-economic perspective: 1.4 million affluent urban residents (high-end consumers): With per capita annual income exceeding $500,000, they are the wealthiest group in China and already have significant influence on global high-end consumption. As China's economy grows, their consumption patterns will continue to influence trends. 146 million urban middle class (urban white-collar workers): With per capita annual income of $11,700, nearly half are government employees or employees of state-owned enterprises. They are the 'narrowly defined Chinese middle class' and dominate spending on non-essential items such as entertainment, dining, and travel. 236 million urban mass class (urban blue-collar workers): With per capita annual income of $5,800, they also have the greatest income growth potential. In the future, while expanding spending on necessities like food, clothing, housing, and transportation, they will also increase spending on non-essentials. 387 million rural employed population (farmers): With per capita annual income of $2,000, they account for nearly half of China's employed population. Low income and scarce job opportunities mean their consumption is mainly basic spending on food, clothing, housing, and transportation. Consumption Patterns of China's Mainstream Consumers Consumption patterns refer to the proportion of spending across different consumption needs. The report divides consumer shopping needs into seven aspects: food, clothing, housing, transportation, entertainment, health, and luxury. In terms of spending proportions, basic consumption such as 'food' and 'clothing' accounts for about half of Chinese consumers' personal consumption expenditure, while in the US this proportion is only about 15%. As disposable income increases, the consumption patterns of China's mainstream consumers will also change. However, affordability will remain an issue, especially for the urban mass class. As disposable income increases, consumption will shift from basic needs like food, clothing, housing, and transportation to non-essential items such as entertainment, dining, and travel, and consumption patterns will move toward those of more mature developed countries. Comparing China's consumption patterns with those of the US reveals that China has huge growth potential in entertainment consumption related to dining and tourism. Chinese consumers' related spending is far lower than in the US and other countries. In 2013, Chinese consumers' entertainment spending accounted for 9.2% of total personal expenditure, while Americans were willing to spend 17.3% of their total personal consumption on entertainment. Dining: Although China's catering industry is very developed, statistics show that most of Chinese people's food spending is still for meals at home. According to a 2014 survey by Peking University, more than half of urban blue-collar workers in China spend less than $5 per day on three meals. Only 2% of consumers spend more than 100 RMB per day. Travel: Although only 3% of Chinese citizens hold passports, far lower than the US proportion of 35%, the report shows that within 10 years, the proportion of Chinese citizens holding passports will rise to 12%. In 2015, the total number of outbound Chinese tourists was approximately 120 million; ten years later, this number will grow to 220 million. Additionally, spending by Chinese tourists on shopping abroad will continue to grow strongly, from $250 billion in 2015 to $450 billion by 2025. As for travel destinations, urban white-collar workers prefer outbound travel, with destinations mainly in Hong Kong, Macau, Taiwan, and Southeast Asian countries. Consumption Methods of China's Mainstream Consumers Compared with consumers in developed countries, Chinese consumers still have a relatively limited range of activities, and only 4% of Chinese people actually own cars, which has led to very rapid development of e-commerce. According to eMarketer, China's e-commerce industry accounts for 16% of total consumer spending, with a total value of $672 billion, half of which comes from mobile. In 2013, China contributed 35% of global online shopping spending. By 2018, China's online consumer spending will exceed the total of all other countries combined, reaching 20% of total consumer spending. The most successful company is Alibaba, and the urban white-collar and blue-collar classes are the main reasons for Alibaba Group's success. The rapid growth of China's e-commerce will not stop: in 2014, China's express delivery packages reached 10 billion, a tenfold increase from 2006. And now China's middle class accounts for only 11% of total consumers, indicating huge development potential. In summary, the Chinese consumer market has made tremendous progress in both scale and quality compared to the past, but only 11% of the population has reached the middle-class level, and the potential of Chinese consumers is far from being fully released. With macroeconomic development and increased disposable income, there will be huge opportunities in entertainment, dining, and tourism. The key is that companies must understand China's urban white-collar and blue-collar workers. As can be seen from the rapid income growth of urban blue-collar workers, this will release a very large consumer market in the next five years. Copyright belongs to the author. Please indicate the source when reprinting. Author: Wang Jiaqi Link: http://www.jiemian.com/article/688986.html Source: Jiemian -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 corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operations | 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 | 016 Distributor B2B transformation | [Long press QR code to follow]