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Jennifer is a proficient investor, executive and manager working with analytics data to drive smart business decisions. Technology, eCommerce, Management, Healthcare, Consulting, Strategy. Passionate for Finance, IT, Emerging & Global. Email: consultbydigital @ Twitter:... More
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  • China Economic Outlook 0 comments
    Apr 5, 2013 9:47 PM

    McK: China emerged on the world's economic stage, in the 1990s, as a gargantuan manufacturer, sending auto parts, shoes, and plastic dolls to buyers everywhere. Low-cost labor and a newfound openness to foreign investment unleashed enviable levels of economic growth, recently hovering at around 10 percent. No global corporation dares strategize without taking the country into consideration. Yet the impact of China the producer could pale in comparison with that of China the consumer.

    Although there is a growing realization that the country is emerging as an important market for consumer goods, many multinationals still underestimate how large it will become, and how quickly. In 2004 about 36 million urban Chinese households had a disposable income of at least 25,000 renminbi (about $3,000) a year-by local standards, a reasonable threshold for entering the consumer class. By 2009 the number could almost triple, to 105 million urban households. While some segments of the populace are quickly becoming experienced shoppers, a massive influx of new consumers is now reaching the cash registers. Every year about 20 million Chinese (a population about the size of Australia's) turn 18 years old. Prosperity is lifting the incomes of tens of millions more.

    China's consumers won't become more and more like their Western counterparts, as some might expect. Similarities will surface as shoppers gain experience, but our research suggests that Chinese consumers-particularly the younger generation-will continue to embrace the traditional values of family and community. A hybrid global consumer is likely to emerge: one eager for modern products but with distinctly Chinese tastes and behavior. The impact of these consumers is already being felt beyond the country's borders: for example, the high-end clothier Shanghai Tang, heralded as China's first global luxury brand, is a rising star in fashion. As the country's manufacturers, immersed in the tastes of domestic consumers, continue their evolution from copiers to innovators, Chinese style could become a major global influence in many industries.

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