Affluent Chinese consumers will double in number by 2020
22/11/2012
Much attention has been paid to China’s middle-class and high-net-worth individuals, BCG has explained. But the affluent—richer than members of the middle class but not as wealthy as the super-rich—have spending habits and attitudes that are distinct, it argues. With annual household disposable incomes of at least $20,000, these consumers are set to become an important driver of growth, especially for premium product and service categories.
“Today, the affluent are 120 million strong, and their annual buying power is $590 billion. By 2020, this group will number 280 million—35% of China’s urban population or 20% of its total population,” the consultancy said on releasing the report. “Additionally, the annual buying power of the affluent will reach $3.1 trillion. That will be nearly the equivalent of Japan’s total consumption in 2020, 28% more than Germany’s, and three times more than South Korea’s total consumption.”
Businesses that aspire to continued success in China—and in their home markets—need to deepen their understanding of this complex, diverse, and rapidly growing group, it concluded.
Vincent Lui, a BCG partner and a co-author of the report, explained: “Reaching the affluent is important not only because of their sheer numbers but also because they have the financial resources and willingness to purchase premium goods and services.”
The categories most poised to grow are those with products and services that are differentiated and those that have higher thresholds for affordability. These categories include cars, overseas travel, and luxury goods such as leathergoods, watches, jewellery, apparel, accessories, skin care, and cosmetics.
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