Tom Doctoroff 2011
Tom Doctoroff

China’s government tries to move from an investment-driven economy to a consumer-driven economy. But it is not obvious China’s consumers will follow suit, explains marketing expert Tom Doctoroff in AdAge.


China’s household consumption levels are strikingly low — about 36% of GDP, compared to 72% for the U.S. and 58% in Germany and France, according to World Bank figures. The Chinese government hopes its urbanization drive will encourage people to spend more to fund new city lifestyles.

But China “is not going to become a consumer paradise just because the government waved its magic wand,” said Shanghai-based Tom Doctoroff, JWT‘s Asia Pacific CEO.

Many Chinese are still very budget-conscious, scrimping on private items like personal care products and home décor and saving up for public status boosters such as watches and cars, he said. (Some brands have used that insight to successfully reinvent themselves in China — Starbucks coffee isn’t so much a beverage here as a status symbol for drinking in public.)

China has few social safety nets, so people save for future health crises or unemployment. Because of the one-child policy, children often support two aging parents and four grandparents. The plenum promised vague improvements in social welfare but gave no details.

“The changes that are going to be required to truly liberate wallets and make people feel safe are so fundamental that it is a long-term destination,” Mr. Doctoroff said. “It is an incremental progression to a level that I don’t think will ever be Western.”

More in AdAge

Tom Doctoroff is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

China Weekly Hangout

Labor camps, the one-child policy, hukou’s, pollution, internet censorship, state-owned companies, energy policy: they are just a few of the subjects that appeared last week in the 21,000 character document released after the Third Plenum of the Communist Party, spelling out reform plans for the coming years.
The +China Weekly Hangout plans to discuss some of those plans and will ask panelist whether the Third Plenum did bear a mouse or an elephant. Pending a few logistical challenges, we will hold our online meeting on 21 November at 10pm Beijing time, 3pm CET and 9am EST. We will pick subjects, depending on the expertise of the people joining us on Thursday, and summarize with the question how likely it is president Xi Jinping will pull off the planned reforms.

China’s new visa system

Ambiguity is the word Beijing-based lawyer Gary Chodorow uses most when talking about the new visas in China, officially in place since September 1, when he talked on the China Weekly Hangout on September 12. What to do with spouses, interns, people with F-visas and other visitors who are not allowed to work. Moderation by Fons Tuinstra of the China Speakers Bureau.

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