High-speed households in China are expected to account for 90 percent of the increase in consumer spending over the next five years, according to a new report by Boston Consulting Group.
This group of consumers is expected to grow from 81 million today to more than 142 million by 2020. Although China has been flagged as a teetering economy, a massive amount of people are being vaulted into the middle class, and affluent consumers are seeing the largest wage gains of all.
“These high-speed households will power consumer spending in the years ahead,” said Jeff Walters, a BCG partner and co-author of the report, Shanghai.
“The overall economy may be slowing, but these more affluent consumers are optimistic about the future and their ability to increase their spending,” he said.
The “A Tale of Two Chinese Consumers” report draws on information from a consumer sentiment survey that was conducted in May 2015, either in person or online, with 3,050 consumers in 250 cities of all sizes.
BCG argues that “high-speed” households will play a critical role in sustaining China’s economic growth over the next several years.
This group currently generates about $1.7 to $3.2 trillion in total urban consumption, which is expected to grow to $3.8 trillion to $5.6 trillion by 2020.
Also, this cohort spans a range of financial demographics, from the emerging middle class to the affluent. The affluent households in this group are experiencing the highest income growth at 11 percent, compared to 6 percent for aspirant households.
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