Capturing The Ever Changing Chinese Consumer Market

• China is set to overtake the United States as the world’s largest economy by 2016—a date that is fast approaching. How do you think this monumental economic shift will affect your life in the short term? How will it affect

China’s economic position has changed greatly, particularly over the last 50 years. Mao Zedong, leader of China at the time, introduced a new method for improving China, often referred to as the 5 year plans. These plans, as the name may suggest, were used for five years, and had a main focus attached.

The Chinese president is looking to boost consumption and import as part of efforts to restructure its economy (Hu Looks to Boost China's Consumption, Imports, (April 15, 2011). The Chinese energy consumption has been predicted to soar to 68% higher than that of the USA by the year 2035(China, India to lead energy consumption, (September 20, 2011). Investment spending is also set to increase from $12,633 billion (2011, 48% of GDP) to $29,628 billion by 2030 (38% of GDP) (CHINA - Gross fixed investment (% of GDP) from 2011 to 2030, EIU Country Data). In 2006 China had a rating of 5.00 and was seen ranked at 101st in terms of the degree of economic freedom as measured

Since the reform and opening up, the economy of China grows significantly, as an emerging economy, China's economy has made tremendous contributions to the global economy, and Renminbi has become one of the most important currency in the world. According to the survey conducted by China National Bureau of Statistics found that from 1979 to 2012, China has attained an annual average growth rate of 9.8% for its national economy, while the annual average growth of the world economy is only 2.8 % during the same period. In past 30 years, China's GDP surpassed Japan’s, China became the world 's second largest economy, in addition, the huge total volume of trade makes China become the world 's largest trading nation. The contribution of China’s

Throughout the novel brave new world consumption plays a vital role in their economic and political system. However the role consumption plays in the world state isn’t much different from the role consumption plays in our society. People may be encouraged to buy things in a different manner, but both systems end with the same product.

Inflation in China accelerated in november, as economic growth picked up and food prices rose. Chinese consumers paid 2% more for good and services in november then they did a year ago, the government's national bureau statistics reported on a Sunday. While that up from a 1.7% annual increase in october, it nevertheless represents tame inflation for the world's second largest economy. A year ago the country was experiencing an annual inflation rate at 4%. the Chinese government prefers to keep its annual inflation rate below 4%- a level it seems as consistent with health economic growth and consumer demand. The inflation rate averaged 4.23 percent reaching an all time high of 27.70 percent in october of 1994 and a record low of -2.20 percent in march of 1999. in china the most important components of the CPI basket are food at 31.8 percent of total weight and residence at 17.2 percent. Recreation, education and culture articles account for 13.8 percent; transportation and communication for 10 percent, healthcare and personal articles at 9.6 percent, clothing at 8.5 percent; household facilities, articles and services for 5.6 percent; tobacco liquor and articles for the remaining 3.5 percent. The CPI basket is reviewed every five years on the basis of household surveys. Revisions reflect new spending patterns and economic development, according to the nation bureau of statistics.

The consumption of luxury goods in China is mounting sharply. Not only those born to elite families, but also many common people are greedy for luxury brands (China, a Booming

in 2011, and their spending jumped by 13 percent. Compare this to single women, whose spending grew less than 2 percent, and the average Japanese consumer, whose spending dropped.5 Young men, it seems, saw the March 11 disaster as a good reason to live for the moment, and Japan’s luxury goods market appears to be a beneficiary. Finally, when we look at segmentation by income, Japanese who spend more than a million yen (about $12,000) a year on luxury goods are more than three times as likely to say they are switching to high-end brands than to low-end brands (Exhibit 3). Those who spend less than half as much are reporting the opposite.

U.S. households have more money to spend on premium products. Real household income rose by more than 50% between 1970 and 2000. But the averages do not tell the whole story, because the household income for the top quintile - which earn more than $ 82,000 per year - rose significantly faster than for any other quintile, almost 70% real in the same 30-year period. As a result, these 21 million households have increased their share of the total income from 43% in 1970 to 50% in 2001 and now control almost 60% of discretionary purchasing power.

Since the fabric of a consumer society is based on consumption, it is imperative to understand what people spend their money on, what decisions they make about their purchases, and how they relate to the goods they buy. Consumption, therefore, is not just based on individual lifestyle or status, but it is also based on social life, such as health insurance, pensions, education, and housing (Hetherington

The aging population creates a demographic shift. Since, China has a high aging population it has affected China culturally, socially and family. Families most important social support is family and the kin system that helps functioned family roles. As aging increases, fertility decreases due to families looking for more work and to live their lives doing other things rather than having babies. It will have a dramatic demographic transition in twenty years. Growing old before affluent. Birth control has also helped with lowering the birth rate. The demographic structure has also changed. In 1950 it held a perfect pyramid but as time goes on it shows how the youth became a shrinking population. One strategic solution is the one child policy which helps balance out the rapidly growing population and to help stimulate development. It restricts family size which help the aging population

From what I have seen, “the world is becoming smaller”(Diana 2001) differences between the U.S. and China are becoming less because of the Internet. From one of my friends who is still studying in China, the environment of education didn’t change a lot from the pass four years. He is still suffering through the high school graduation test, which is the most important test for every student in China. He said to me that comparing to him I’m living in heaven and he is living in hell. The culture and value has changed a lot. For example, “fast food culture, self center, money talks, and lost of the idea of family. However the credit system, independence, and law system in China are not as perfect as the U.S.”(Jian 2006) “China are not only growing very fast in economy but also losing the culture in the same speed.”(Jiyang 2003)

The overall sales of luxury goods in the year 2009 is expected to be more than US$150 billion and Asia contributes 10% to it. The concept of luxury is now not confined to only to Europe and US, the Asian subcontinent contributes majorly to it, with India and China as the newly emerging markets. Professor James Twitchell (2002) comments on the democratization of luxury and the changing consumer psychology These new customers for luxury are younger than clients of the old luxe used to be, they are far more numerous, they make their money far sooner, and they are far more flexible in financing and fickle in choice. They do not

In 1991, Liang Senior analysed the Chinese consumer market for a year and sensed that the rapid growth of the

The report then delivers an audit of the Chinese market including size, consumer behaviour, distribution and transport channels, promotional mechanisms and pricing arrangements. Major competing firms are analysed and their marketing tactics are discussed.