The world’s second biggest economy is set to create 260 million more middle class consumers by 2020, this means 260 million new customers for luxury goods. City dwellers account for the majority of the population.
At a press conference in Shanghai this week, L’Oreal’s Chairman & CEO Jean-Paul Agon, highlighted this enormous opportunity to add to its customer base.
There has been some debate whether this new group of middle class consumers has enough purchasing power to afford luxury goods. However, just considering the possibility of the rise of affluent Chinese would tantalize any luxury goods company.
The two charts presented by L’Oreal on the rise of affluent Chinese by 2020 are impressive. The upper affluent with household income greater than 240K will increase to 36 million from 3 million while those with household annual income between 120-240K will soar to 161 million from 39 million. The middle class (75-125K) will rise to 203 million from 99 million. Consumption by this affluent class nearly match or exceed countries like Japan, India, Germany, and France.
photo credit: chris