Chinese New Year has just passed + Juicy has just completed some
research looking at China = an opportunity to delve into this
fascinating marketplace.
China is one of the BRIC economies, with GDP growth the envy of many an advanced nation. It has a growing base of more prosperous consumers living in urban locations, eager to spend cash and indulge their material aspirations. McKinsey's 2008 Chinese Consumer Survey recently reported that over one billion people will be urban-based by 2030, at which time the high-earners will account for around one-third of this total.
In doing our research it's clear there is lots to be said about China, and lots of people doing it very well. Just check out the showcase on Alltop for starters. So, in our attempt not to rewrite the wheel, here are five good things to know about China right now. And if you're a marketer, they just might be quite useful.
1) Economy prosperity: They must be a pretty happy lot, what with a strong currency, consistent increases in GDP growth for most of this decade, and the third largest economy in the world. In a rather pessimistic global economy, China's engine continues to be buoyant, albeit at slightly slower growth rates than previous years. The Chinese National Bureau of Statistics this week reported that actual GDP growth for 2007 was some 13%, hitting the $3.4 trillion mark (via Wall Street Journal), but 2008 growth was likely to fall back to 9% in 2008.
2) Happy shoppers: The rise of the middle and upper classes is driving appetite for products and services that are deemed non-essential. The Chinese have a penchant for shopping, especially for luxury brands. Just as one exampple, McKinsey's research found that 15% of consumers were willing to pay over 60% more for high end consumer electronics. There is a lot more great stuff in the PDF (via Slideshare) around consumers' relationships with brands and media analysis.
3) Getting switched on: Stats from The China Internet Network Information Centre (CNNIC) shows that penetration is about 20% of the population, far below Western levels of around 60% in the US/UK. However, in actuals, it equates to some 298 million users as of end 2008 - clearly not small by any means. Techcrunch reveals Comscore data for December 2008, showing China leading the way in the country stakes. The Internet is fast becoming an important channel for consumers, with penetration climbing nearly 50% in 2008 alone. WARC reports that mobile web media is on the rise and e-Commerce is picking up too. Improved infrastructure will be an important growth driver moving forward, with players like Cisco, who this month underlined its commitment to China, spearheading developments.
4) Olympic glory: They may not have made in to first place in the medal rankings, overtaken at the post by Mr Phelps et al, but they did put on a good show. Playing host to the Olympics in 2008 put China under the microscope, at times yielding both positive and negative press. China Business Review outlines some of the benefits to the economy from a tourism, environmental and economic perspective, but also highlights some of the 'lingering effects' playing Olympic host will bring in the future.
5) Future prospects: No article on China would be complete without giving an angle on its fundamental growth prospects. Many of the 1.3 billion people populating this country are still fledgling consumers by Western standards. There's roughly 100 million middle-class consumers representing a relatively small proportion of the country's population. The economic downturn is likely to hamper its recent fortunes, but there's no mistaking the future potential. PwC predicts it could be as early as 2025 when China overtakes the US to become the world's largest global economy.
