19 March 2019
Selling to Chinese Consumers
Fast and Curious: Five Features of Chinese Consumers
China’s 1.3 billion consumers have fueled the growth of B2C brands worldwide for decades. Across categories, they now account for a large chunk of multinationals’ global revenues: 41% for Volkswagen, 33% for cinema group Imax, and 20% for Apple and Adidas. But simply taking your brand to China is no guarantee for growth. The retail landscape has become so saturated, mature, and complex, that it’s more vital than ever for market entrants to go beyond a superficial understanding of the local market. Here are five features of Chinese consumers that foreign brands should be aware of:
1. They're spread out
Disposable incomes, and thus consumption, have boomed in China’s flashy, first-tier coastal cities, sometimes overshadowing the huge potential that still exists in smaller towns. In 2018, rural consumer spending per capita grew at almost twice the speed of urban spending. The recent rise to fame of e-commerce platform Pinduoduo – which offers good bargains to a mostly rural user base – has revealed just how demographically dispersed China’s spending power is. This is even true in the high-end segment: more than half of China’s luxury consumers now live outside of the country’s 15 top cities. Reaching China’s lower-tier cities has gotten easier thanks to e-commerce. Most foreign players, however, continue to concentrate their offline presence in the main metropoles. This makes sense when first entering the market, especially for high-end players whose glitzy flagship stores in prime locations help cement them as aspirational brands.
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