Now, here are three truths about Chinese consumers:
First, Chinese have more money than you think. Chinese households hide “grey income” that is never reported. For example, many state companies give big bonuses that are not accounted for as official salary.
Second, Chinese are status conscious people. They would pay premium prices for products and services that can enhance their “status.” But for products and services that their neighbors and friends cannot see, they would be very price conscious. For example, the woman who bought Gucci shoes would not spend more money on first class airfare.
Third, the next big opportunity is in smaller cities. Recently, I visited a second tier city in Western China, called Chengdu, with about 5 million population. At Chengdu’s downtown, you can see big signs for “Cartier,” “Louis Vuitton.” Chengdu’s retail was booming. And China has hundreds of cities like that.
A recent Credit Suisse report indicates that Chinese consumption will reach $16 trillion by 2020, and China will become the largest consumer market in the world. This just shows how big the opportunity is, and that’s why I said the rise of China’s middle class is the biggest story of our time.
- Luxury dreams from Chengdu – Helen Wang (chinaspeakersbureau.info)
- Who are China’s luxury shoppers? – Helen Wang (chinaspeakersbureau.info)
- Helen Wang’s “The Chinese Dream” to be published in China (chinaspeakersbureau.info)
- Who are China’s luxury shoppers? – Helen Wang (chinaherald.net)