The Organization for Economic Cooperation and Development defines the global middle class as those households with daily spending between $10 and $100 per person in purchasing power parity and puts China’s middle class at up to 10% of the population. It expects the percentage to increase to 40% by 2020.
Consulting firm McKinsey & Co. reports that China’s middle class has an annual disposable income of $16,000 and $34,000, which accounts for only 6% of the urban population. Those with disposable income above $34,000 are considered upper-middle-class to wealthy consumers, but they make up only 2% of the urban population.
Regardless whether one agrees with these definitions and projections, all agree that China’s middle class will be a formidable force. Much has been written on how Western retailers, brands, and marketers plan to capitalize on this prized group of consumers.
What is the Chinese’s take on middle class?
One place to find out what the Chinese think is the Chinese internet. Most of China’s netizens are urban youth and young professionals, which is the group (of middle class) that many brands are targeting.
Apparently, they have much a higher expectation of the middle class lifestyle. Based on comments Offbeat China compiled from Chinese netizens on Sina Weibo, “the possession of luxury brands (luxury even by Western standards), instead of premium brands, is seen as the symbol of middle class.”
It appears that China’s newly affluent are moving from “I know no brand” to “I want the best brand” directly. With the rapid rise of wealth, many Chinese equate middle class with being rich, “a product is either for the mass market, or for the affluent.”
Alternatively, since China’s rising middle class look to the West for aspiration and are captivated by foreign luxury goods, maybe “being foreign means middle-class.”
Perhaps, middle class is just too elusive for most Chinese.
The Wall Street Journal notes that “middle-class status in China doesn’t confer the same privileges as in the West. In China, basic things such as uncontaminated baby formula, clean air, top-quality schools and private hospitals are luxuries, out of reach of many members of the middle class. Usually, the middle class is the stabilizing force in a society. ”
China’s nascent middle class is still grappling with its identity, yet it holds all sorts of promises.
photo credit: henry jose