China Consumer

Question 1

How does consumption grow relatively to GDP in China

Answer 1

It grows faster than GDP. In 2015 it was about 8% growth

Question 2

Where will significant middle income population emerge?

Answer 2

In biggest clusters

Question 3

How will income change in top 4 cities in China over the next 15 years?

Answer 3

Over the next 15 years the number of local residents with a disposable income per head of above Rmb200,000 will double in each of these cities, with Shanghai crossing the 10m mark (43.2% of its population)

Question 4

Where will the income growth be the fastest?

Answer 4

Chongqing, Xian, Changsha

Question 5

What does South Korea teach us regarding the income growth?

Answer 5

spending on food declines proportionally, categories that are likely to see growth in expenditure include transport and communications and leisure and education

Question 6

What are the areas that will see spending growth in Chine in future?

Answer 6

Leisure, education, transport, communication

Question 7

How do Chinese keep their household financial assets compare to US?

Answer 7

The structure of household financial assets in China is based on 75% cash, whereas in US cash amounts to about 15.3%

Question 8

Which is the richest city in China?

Answer 8

Shanghai has more rich people than all other clusters combined

Question 9

How much China is spending on natural water protection?

Answer 9

In 2011 China spent 7.46 billion on natural water protection (VS 361 million in US)

Question 10

How much money did Chinese tourists spent abroad in 2015?

Answer 10

105 billion USD

Question 11

What are the perspectives in China related to healthcare spendings?

Answer 11

China’s spending on healthcare has almost tripled in 5 years and will reach 1trillion USD by 2020.

Question 12

Which group of customers should I focus on?

Answer 12

As households are the leaders in spending, this is a very important group to watch.

Question 13

How do I do segmentation by spending in China

Answer 13

Chinese consumer spending is also exploding in complexity. The segmentation becomes very complicated (individual Chinese tourists, Chinese tiger moms etc).

Question 14

What will be Chinese urban household population income by 2020?

Answer 14

8000USD per year, which will be similar to South Korea but in much larger proportion.

Question 15

How do Chinese consumers change?

Answer 15

From value hunters these consumers start representing more emotional, aspirational and free-spending population.

Question 16

Why Chinese moms are important as a consumer segment?

Answer 16

Chinese moms are probably the most important consumers on the planet: a) there’s roughly 300million of them, b) they coordinate and manage most of the household spending, c) they contribute up to 50% of the household income, d) they control spending related to healthcare and elders,

Question 17

What are the characteristics of Chinese consumers 15-24 yo?

Answer 17

Chinese consumers 15-24 yo: more emotional, more loyal to brands more confident in their financial future. They are overwhelmingly online and can only be reached through internet and mobile.

Question 18

By 2030 the population of Chinese seniors will achieve 345 million. Is it a good consumer market?

Answer 18

No there’s a huge drop of the income for Chinese over age 45

Question 19

How Starbucks is doing in China?

Answer 19

Starbucks will keep on opening about 500 new stores in China for the next 5 years aiming at 4500 stores.

Question 20

How Zara is doing in China?

Answer 20

Zara has 514 stores in China which is 7% of their 6900 stores globally. But over 25% of new stores globally are opened in China.

Question 21

How about discretionary consumption?

Answer 21

From 2010 to 2020 growth of discretionary spending in China will exceed 7% - it means Chinese consumers will keep on buying semi-necessities at an accelerated rate.

Question 22

How much copper does China consume?

Answer 22

In 2015 China was consuming 40% of the world’s copper

Question 23

I want to make a Joint-Venture with Chinese. How should I do it?

Answer 23

If you go for the joint venture with Chinese, ask yourself “what is your competitive advantage”. Normally the right answer should be: technology, foreign customers, brand and cross-border operations. Next question would then be: how long will that advantage last? Your ongoing value-add is what really keeps you in the business.

Question 24

What is a good bench-marking for tourism from China?

Answer 24

Thailand gets 10 million Chinese tourists per year

Question 25

How much an average Chinese tourist spend during the trip?

Answer 25

Each Chinese tourist spends around 875 USD when travelling

Question 26

How much coffee do Chinese drink per year?

Answer 26

In 2013 an average Chinese had 4 cups of coffee annually (compare 441 in US and 1000 in Norway).

Question 27

What kind of innovation Chinese are best in?

Answer 27

Chinese are especially good at the following types of consumer innovation: a) solving problems for customers (Alipay), b) Rethinking business models (Tencent makes money on gaming, not advertising), c) Making good enough products at a very decent price (Xiaomi)

Question 28

How many smokers are there in China?

Answer 28

There are about 350 million smokers in China

Question 29

What are the plans for China sports industry towards 2025?

Answer 29

The size of the industry must be about 800 bn USD

Question 30

How big is Nestle at China instant coffee market?

Answer 30

“70% of the instant coffee market in China belongs to Nestle (that is 80% of all the coffee market.”

Question 31

How many Swiss watches are being sold in China every year?

Answer 31

8 billion USD worth of Swiss watches were sold in China in 2007

Question 32

How much infant formula is sold in China every year?

Answer 32

About 50% of all infant formula is sold in China as Chinese moms prefer to come back to work as early as possible