About China's middle-income class spending power

US think tank DemandInstitute and parent bodies ConferenceBoard released a report that China's middle-income class spending power is overrated.

china middle income class

Injection molding china consumer

China injection molding companies -CNMOULDING, our definition of "middle class", should be capable of spending a day at $ 10 to 50, the Institute demands that the scale of China's middle class is defined under this section is too large. TNCs are the typical target customer groups should be less than 49 years old, well educated, and living in the city, with the ability to access the Internet. This part of people's spending power is much lower than the United States. In 2010 to 2014, this population only 12% of household income more than 32,000 US dollars / year, or about $ 85 / day.
Not with the United States than China, low US interest rates of consumer loans, people for their strong confidence of the middle class status, are not available in China. China's consumption is not overvalued, but distinctive characteristics.
The first characteristic, FMCG, buy cheap.
China mould believe, the scale of online shopping accounts for almost 35 percent of Europeans and 40% of the world of online shopping scale, basically in 40%; the same period, the Americans in 2006 Online shopping accounted for 42% of the world scale, but in 2013 this figure dropped to 21%; while net purchases from the size of the Chinese share of global online shopping scale growth to 1.2% in 2006, 24 per cent in 2013.
"Double 11" full-day trading volume of 122.937 billion yuan net, compared with last year's 80.5 billion 52.7%, total net number of packages of 678 million, 410 million increase over last year's 65.7%. Although the return data, which are entangled, but online, and online promotion festival such a huge amount of consumption, indicating that Chinese consumers are very price-sensitive products, particularly involving the type of appliances, brand, FMCG, etc., can be cheaper just absolutely not expensive.
Some Chinese pay attention to the quality of life of the middle-income class has purchased in the high-end brand FMCG goods, they are not than what to wear, but to someone in the bathroom, that household soap and shampoo is what brand? Previously considered a good sign, reduced now, the middle-income class is no longer in use Rejoice brands such pride, in favor of the direct use of high-end brands purchased abroad.
The second feature, the luxury to wait until the foreign buying.
Chinese consumers shopping from luxury goods to Europe and Japan to household appliances, food, all-encompassing. Japan National Tourist Office to name data, as of October 9, 2015, the cumulative number of tourists visiting Japan exceeded 15 million, more than 2014 full-year 1341 million, of which 47% for Chinese tourists. The third quarter of this year, Chinese tourists to visit Japan per capita tourist expenditure of 280,000 yen (about 14,870 yuan), an increase of 19% over the previous year. Among them, 140,000 yen (about 7435 yuan) to shopping. Japanese jeweler Mikimoto jewelry (Mikimoto) headquarters in Tokyo's Ginza 7-9 months of duty-free merchandise sales increased by 20% compared to the same period last year. During the 2015 National Day holiday, duty-free goods of Chinese tourists spending in Japan's Takashimaya department store more than 2 times the same period last year. Cosmetic skin care products based realization selling, accounting for a quarter of overall sales.
Do not say that China's middle class income not consumption, but a large part of the consumer transferred directly to the outside, so there were only one way to lower taxes. If the country also sell so expensive Gucci, who in the country to buy it?
Third, more than China's middle class income will not mean security and education, safety of life, involving children for the future, no amount of money spent.
November 16, the US State Department and the American Institute of International Education nonprofit agency released the latest report, 2014-2015 academic year, nearly one million international students into American universities study, the number of international students enrolled in an increase of 10%, an increase of 35 years maximum, The number of Chinese students increased by 10.8%, accounting for 9.8 billion of the $ 30 billion contribution.
Food, too, China's middle class is not only large-scale purchases of organic food in foreign countries, health care products, pharmaceuticals, domestic organic food are rising. Industry research and consulting firm Investment Advisor data show that in 2012 the world market sales of organic products has more than 60 billion US dollars, mainly in Europe and North America. Developed nearly 60% of the organic food gap imported from developing countries, which accounted for 70% of Argentine exports to developed countries organic foods. Currently, the amount of organic food consumption is growing at a rate of 30% to 50% annual growth, annual out up to 30%.
Middle income groups can rent a small plot of land in rural areas, can be rented for a fraction of a workforce management own vegetable garden, the overall cost is not low, but they are never bored for safety.
      From more than 20% of the growth we can easily see that the above Chinese middle income groups do not skimp on spending, but the growth of consumption and safety, quality, and show off, investment linked, in order to impress them, to a concept to pay, has been increasingly the less.