The China people need to spend more money!! That was the clear statement from the China government several years back. Or at least that is what I heard. For any right-minded business person this is an invitation of a life time. So we ask,
Why did the government issue this statement? Also, with sales of western products, with the exception of highend, largly falling short of expectation, what can we do different?
The answer to the first question:
- The average Chinese consumer saves 90% of their earning wage
- The China economy and their middle class are, arguably, the fastest growing in the world
- China has the largest population and by logical extention the largest potential consumer market by country
- The trade imbalance between China and the west is huge and unlikely to be sustainable
- Growing the Chinese consumer market will help in buffering against a weakening of orders from the west
- Spending puts more money back into the economy Well hell, spending is just so much more fun than saving!
(This video was done by a friend of mine, Patrick Carr a film maker in Shanghai, and provides an excellent look into the emerging consumer market in China with an angle on the easier to penetrate highend brand market – please note my interview!)
Well all of this sounds pretty easy, if the China consumer is buying then all there is to do is sell. It must be as easy as falling off a barstool. Well, many Western brands have thought that and not succeeded. The solution lies simply in having a better understanding of the Chinese consumer.
Simply put there is no China consumer and therein lies the problem! The China consumer has not had access to consumer goods or freedom to enjoy lifestyle and luxury products. Therefore the problem lies in knowing how, what and why to buy rather than to buy or not.
There is a significant opportunity to provide guidance to the emerging China consumer on shopping behaviour. Providing the confidence to spend their money and showing them how it will enhance their lives is an important first step to energising the China consumer.