With fast rising wealth and money to spend, it’s no surprise the Chinese are in a buying frenzy. China’s consumer spending is growing at an average annual rate of 18 percent compared to 2.2 percent rise for the US, according to the National Bureau of Statistics.
While some of their purchases are just plain glitzy, studies and research from organizations like the United Nations, Eurmonitor and McKinsey & Co. show that Chinese consumers are displaying great consciousness for bettering themselves and their planets.
Here’s a list of industries benefiting the most from China’s new fortunes. A few of these consumer trends may surprise you.
China is the fastest growing market for a plethora of luxury brands. In 2006, Gucci had 6 stores in China; now it has 39. Likewise, Hermes now boasts 20 locations, a number that has quadrupled since 2005. Luxury consumption is poise to be $27 billion industry by 2015.
Wealthy Chinese are putting their money to good use: 84% of consumers say they are willing to shell out more for products and services certified as “green.” Hybrid cars will make up 7% of China’s light-vehicle sales by 2020, compared to just 2% in the United States. China’s government also invested about $34.6 billion in renewable energy in 2009, twice as much as the US government.
Travel is now a top priority for the wealthy in China. Large-scale group travel, coordinated by hotels and travel companies worldwide, is a booming industry. The Burj Al Arab hotel in Dubai has hired staff fluent in Chinese, created promotional content in Mandarin, and added Chinese cuisine to their menu. Another hotspot is Australia, where 450,000 Chinese visited in 2010 and spent $3 billion.
Foreign Real Estate
Tough property laws are driving Chinese real estate investors abroad. The US, Canada, and the UK are prime markets for Chinese buyers. In London, Chinese buyers are the largest single block of investors buying property, accounting for almost 11% of 2010’s sales.
China’s rapidly growing middle class and wealthy seniors especially are calling for imported fruits, nuts, yogurt, and other trendy health foods. China’s probiotic market, for example, is expected to grow 120% between 2009 and 2012.
The networking possibilities smart phones offer, like mobile web and instant messaging services, are hot in China right now, especially among urban youth. While Nokia dominates the market, buzz companies like Apple, HTC, and Huawei are gaining brand recognition. According to Wireless Intelligence, China will surpass one billion mobile connections by May 2012.
Chinese bought about 126 million cases of wine in 2009. The country will earn the United States’ current title of world’s largest wine consumer by 2015. Wine drinking, considered a healthier and classier alternative to spirits, is being promoted by the Chinese government as well.
Lots of disposable income means Chinese are expanding their families – fur families, that is. The one-child rule and an aging population has also made pets attractive. Dogs particularly are viewed as status symbols. A multimillionaire coal baron bought a Tibetan Matiff for about $1.6 million this year, while a Chinese woman paid $600,000 for the same breed in 2009.
China’s overseas student population has increased 24 percent since 2009. With more middle-class families able to afford foreign education, Britain’s University of Cambridge boasted 1,000 Chinese students last year, making up 8.3% of the student population. American summer camps for younger children are considered culturally enriching as well. An estimated 60,000 young children, for roughly $5,000 a piece, attended American camps this year.
Only the US buys more corn than China now. The country’s corn imports – which are mostly eaten by livestock, not humans – will reach a record 5 million metric tons by the new year. China’s rising wealth is the driving force behind increases in high quality, grain-fed meat.
photo credit: winechina