Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept & Close

Marketing to the Middle Classes - China - June 2013

“China’s vast area, different levels of regional development and varied cultures mean that the middle class cannot be regarded as a single segment but represents multiple segments. These multiple markets present opportunities and challenges for companies, especially multinationals. In order to understand middle class needs and aspirations, companies need to understand their behaviour, demographic and socio-economic profile, and how these impact on their lifestyles, social positions and future plans.”

– Lui Meng Chow, Research Analyst

Some questions answered in this report include:

  • What are the different middle class segments, what are their priorities and what are they looking for?
  • What is the best way of mixing Western and Chinese products and branding in order to target the middle class?
  • How much of a role does status and conspicuous consumption play in middle class spending habits?
  • How can companies target those who are belt tightening but also who would like products and services that offer a compromise with price, quality and brand?
  • What are the Chinese middle classes doing to improve their living in terms of happier and healthier lives? What are their key lifestyle aspirations?


Report Introduction:

Mintel predicts that there will be 35 million middle class households in China by 2015. Building on Mintel’s Consumer Lifestyles: China’s Middle Class – China, June 2012 report, this report offers an in-depth analysis of how marketers can target this consumer group. China’s cities are already home to a huge market of increasingly affluent consumers. The market will continue to grow over the coming years, meaning that it is essential to understand China’s new middle class and the various transformations ongoing in China in terms of financial reform, global competitiveness, social development and even environmental sustainability.

China’s vast area and different levels of regional development also mean middle class consumers cannot be regarded as a single segment. Instead, they represent multiple segments that think differently depending on their socio-economic and demographic profiles. China’s Eastern coastal region for example is home to the most affluent consumers, while the Central and Western regions, which are experiencing rapid GDP growth, have a rising number of less affluent but still important middle class consumers. Many multinationals face difficulties in understanding the unique attributes of these different middle class segments.

Some Chinese middle class consumers feel financially insecure. They worry about how best to move up the career ladder, and are keen to make sure that they have enough savings put aside to provide a comfortable retirement, and to obtain the best possible medical care and education for their family. They enjoy spending but at the same time are looking for ways to safeguard their assets and to save as much as possible. Financial companies need to innovate further in terms of products offered in order to unlock the spending power of the Chinese middle classes.

Many foreign companies have set up shop in China since economic reform in the 1980s. What’s more, the influence of Western culture has been spreading even more rapidly in China as more and more students and travellers return from abroad. These digitally savvy, individualistic and sophisticated middle class consumers present opportunities and challenges for companies wanting to target them. But middle class consumers will not indiscriminately embrace any Western brand and culture. It is critical that companies balance the localisation of their brand and product values with a hint of Western elements.

Some middle class consumers are spending freely, but the feeling of financial insecurity means that others are cutting down on unnecessary purchases or replacing big brands with products and brands that balance quality and price. In order to cater to different middle class segments and penetrate lower tier and inland cities, companies will need to balance brands, price and quality. They will also need to recognise the fact that the Chinese middle class is becoming much more sophisticated in their spending and priorities. They are aware of the environmental problems that sometimes accompany economic development. At the same time, they are increasingly interested in ways to address health issues caused by heavy pollution and food scares. There are a lot of opportunities for companies to cater to these middle classes concerns, and there are risks to any marketers who make lazy assumptions about materialism and the appeal of conspicuous consumption.

 

Liqueurs - UK - January 2012

Take a look inside a sample report

Mintel’s consumer reports deliver insight and expert analysis into key consumer trends and behaviour in your marketplace, in addition to an overview of the market data and key brands. Mintel’s consumer reports provide you with easily digestible information to guide your future innovation and move your business forward.

Download now

 

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. Introduction

      • In this report we answer the key questions
        • Defining the Middle Class
          • Consumer research
            • Abbreviations
            • Executive Summary

                • Key issues
                  • The impact of regional development on the Chinese middle class
                    • Attitudinal differences across key middle class segments
                      • Balancing financial security and material wealth
                        • Adapting Western lifestyles in the home, leisure and entertainment and social dining
                          • Figure 1: Discretionary spending on household items, by target groups, March 2013
                          • Figure 2: Discretionary spending on dining out, by target groups, March 2013
                        • Polarisation of middle class consumption – tightening belts on the “nice-to-have” luxuries
                          • “LOHAS”: promoting health and sustainability
                            • What we think
                            • The Emerging Middle Class

                              • Key points
                                • Chinese middle class on the rise
                                  • Figure 3: The growth of china’s middle class, 2000-15
                                • Increasing average incomes and a high savings rate
                                  • Figure 4: Growth rate of incomes and expenditure of urban households, by region, 2009-11
                                • High savings rates in China…
                                  • The incentive to reduce the savings ratio
                                    • Figure 5: Changes in lifestyle habits – “I put more money into savings”, by monthly personal income, February 2013
                                  • Home ownership on the rise
                                    • Figure 6: Type of primary residence, April 2012
                                  • Middle class consumers prioritise clearing their mortgage
                                    • Figure 7: Middle class housing situation, March 2013
                                  • Increasing car ownership
                                    • Figure 8: Middle class car ownership and plan to purchase of cars, March 2013
                                  • Multinational and local private companies are lifting consumers into the middle class
                                    • Figure 9: Employment status, March 2013
                                • Key Issue: The Impact of Regional Development on the Chinese Middle Class

                                  • Issues at a glance
                                    • Economic growth in Central and Western region drives middle class growth
                                      • Figure 10: GDP and growth rate in Eastern region, 2012
                                    • The Northeast starts to shine
                                      • Figure 11: GDP and growth rate in Northeast region, 2012
                                    • Henan leads the way in Central China
                                      • Figure 12: GDP and growth rate in Central region, 2012
                                    • “Go West” initiative attempts to boost growth in Western China
                                      • Figure 13: GDP and growth rate in Western region, 2012
                                    • What it means
                                    • Key Issue: Attitudinal Differences Across Key Middle Class Segments

                                      • Issues at a glance
                                        • Psychographic and demographic profile of China’s middle class consumers
                                            • Figure 14: Consumer segments amongst the middle class consumers, March 2013
                                          • Progressive affluent spenders
                                            • Trendy-aspirers
                                              • Value-led buyers
                                                • Conservative spenders
                                                  • What it means
                                                  • Key Issue: Balancing Financial Security and Material Wealth

                                                    • Issues at a glance
                                                      • Regardless of personality type, the middle class share several key traits
                                                        • Financial products for today and for the future: to enjoy and to safeguard
                                                          • Figure 15: Factors that lead to a happy life, March 2013
                                                        • A desire to plan for the future shapes the middle class’s priorities
                                                          • Figure 16: Current financial situation, March 2013
                                                        • Emotional needs must be balanced against financial security
                                                          • Figure 17: Proportion of cash that spend on different expenditure items, by household income, 2011
                                                        • Opportunity to offer variety of insurance plans to customise according to middle class’s lifestyle risks
                                                          • Figure 18: Insurance in China, by value, 2009-11
                                                          • Figure 19: Investment/planned investment for future security, October 2012
                                                        • Middle class investing in their children’s education
                                                          • Figure 20: Type of children’s education, April 2012
                                                        • Multigenerational support for education costs
                                                          • Figure 21: Financial impact of children's education, April 2012
                                                        • A need to understand that education is an obligation, not just an option
                                                          • Figure 22: Examples of education planning products offered by HSBC, June 2013
                                                        • Consumer finance sets off along with the growth of the middle class
                                                          • Poor customer service is holding the market back
                                                            • Credit card rewards can potentially benefit different middle class profiles
                                                              • Figure 23: Credit card ownership, April 2012
                                                            • What it means
                                                            • Key Issue: Balancing Western Culture and Local Acceptability

                                                              • Issues at a glance
                                                                • The influence of Western culture and “face”
                                                                  • Figure 24: Any agreement with shopping habits, March 2013
                                                                • Cross-cultural differences in brand associations
                                                                  • Middle class’s demand for “Westernised” housing and home environment
                                                                      • Figure 25: Monthly expenditure on household and electrical items, March 2013
                                                                    • A hunt for high-quality products
                                                                      • Figure 26: Discretionary spending on household items, by target groups, March 2013
                                                                    • IKEA successfully targets the middle class’s home living aspirations – Western, contemporary, innovative and price
                                                                      • The lessons to be learned from IKEA’s Western competitors
                                                                        • Promoting Western and international dining experiences
                                                                          • Figure 27: Discretionary spending on dining out, by target groups, March 2013
                                                                          • Figure 28: Agreement with attitudes towards full-service restaurants, by income, August 2012
                                                                          • Figure 29: Monthly expenditure, by target groups, March 2013
                                                                        • Foreign foodservice outlets’ geographic expansion strategies to attract more potential middle classes
                                                                          • Changing restaurant formats to appeal to more sophisticated tastes
                                                                            • Foreign foodservice outlets offer exceptional experiences
                                                                              • A chance to expand Western-style social dining into lower tier cities
                                                                                • What it means
                                                                                • Key Issue: Polarisation of Middle Class Consumption Creates large Market Gap for Mid-level Brands

                                                                                  • Issues at a glance
                                                                                    • Some are spending but financial insecurity and price sensitivity barrier to greater consumption
                                                                                      • Figure 30: Changes in financial situation over the previous year, by target groups, March 2013
                                                                                      • Figure 31: Discretionary spending, by target groups, March 2013
                                                                                      • Figure 32: Agree with shopping habits “I am happy to pay a high price to have the latest gadgets”, by target groups, March 2013
                                                                                      • Figure 33: Father's/ Mother's working background, April 2012
                                                                                    • The battle between conformity and individualism
                                                                                      • Financial insecurity intensifies the need to project status
                                                                                        • Figure 34: Agreement with shopping habits, by target groups, March 2013
                                                                                      • Balancing quality, price and branding and still standing out from the crowd
                                                                                        • Figure 35: Any agreement with shopping habits, by target groups, March 2013
                                                                                        • Figure 36: Agreement with shopping habits, by target groups, March 2013
                                                                                      • Growing demand for small luxury and “masstige” brands
                                                                                        • Figure 37: Any agreement with shopping habits, by target groups, March 2013
                                                                                      • Fast fashion finds a foothold amongst the middle class
                                                                                        • Some international brands are struggling to find a place in the mid-market
                                                                                          • Middle ground brands to fill a market void
                                                                                            • Local companies are starting to build stronger brands
                                                                                              • Chinese brands can appeal to international customers as well as the domestic middle class
                                                                                                • What it means
                                                                                                • Key Issue: LOHAS: Health and Sustainability

                                                                                                  • Issues at a glance
                                                                                                    • Middle class more concerned about health and lifestyle
                                                                                                      • Figure 38: Agree with descriptions of healthy lifestyle, by monthly personal income, November 2012
                                                                                                    • Busy urban lifestyles make the concept of slow living popular
                                                                                                      • Figure 39: Factors that lead to a happy life, by target groups, March 2013
                                                                                                    • LOHAS – emerging awareness of healthy lifestyles
                                                                                                      • LOHAS concept food and beverage and dining to target the middle classes
                                                                                                        • Bringing the LOHAS concept into the restaurant sector
                                                                                                          • Eco-tourism: Middle class looking to get back to nature
                                                                                                            • Eco-resorts start to gain traction in China
                                                                                                              • Moving towards eco-living in the future
                                                                                                                • What it means
                                                                                                                • Appendix – Current Financial Situation

                                                                                                                    • Figure 40: Current financial situation, March 2013
                                                                                                                    • Figure 41: Current financial situation, by most popular factors that lead to a happy life, March 2013
                                                                                                                    • Figure 42: Current financial situation, by next most popular factors that lead to a happy life, March 2013
                                                                                                                    • Figure 43: Current financial situation, by most popular discretionary spending, March 2013
                                                                                                                    • Figure 44: Current financial situation, by next most popular discretionary spending, March 2013
                                                                                                                    • Figure 45: Current financial situation, by other discretionary spending, March 2013
                                                                                                                • Appendix – Changes in Financial Situation

                                                                                                                    • Figure 46: Changes in financial situation, March 2013
                                                                                                                    • Figure 47: Changes in financial situation, by most popular factors that lead to a happy life, March 2013
                                                                                                                    • Figure 48: Changes in financial situation, by next most popular factors that lead to a happy life, March 2013
                                                                                                                    • Figure 49: Changes in financial situation, by most popular discretionary spending, March 2013
                                                                                                                    • Figure 50: Changes in financial situation, by next most popular discretionary spending, March 2013
                                                                                                                    • Figure 51: Changes in financial situation, by other discretionary spending, March 2013
                                                                                                                    • Figure 52: Changes in financial situation, by demographics, March 2013
                                                                                                                • Appendix – Factors that Lead to a Happy Life

                                                                                                                    • Figure 53: Factors that lead to a happy life, March 2013
                                                                                                                    • Figure 54: Most popular factors that lead to a happy life, by demographics, March 2013
                                                                                                                    • Figure 55: Next most popular factors that lead to a happy life, by demographics, March 2013
                                                                                                                • Appendix – Monthly Expenditure

                                                                                                                    • Figure 56: Monthly expenditure, March 2013
                                                                                                                    • Figure 57: Monthly expenditure, by current financial situation, March 2013
                                                                                                                    • Figure 58: Monthly expenditure, by changes in financial situation, March 2013
                                                                                                                    • Figure 59: Most popular have done in the last three months expenditure, by demographics, March 2013
                                                                                                                    • Figure 60: Next most popular have done in the last three months expenditure, by demographics, March 2013
                                                                                                                    • Figure 61: Most popular plan to do in the next three months expenditure, by demographics, March 2013
                                                                                                                    • Figure 62: Next most popular plan to do in the next three months expenditure, by demographics, March 2013
                                                                                                                    • Figure 63: Monthly expenditure – neither, by demographics, March 2013
                                                                                                                • Appendix – Repertoire Analysis

                                                                                                                    • Figure 64: Repertoire of monthly expenditure have done in the last three months, March 2013
                                                                                                                    • Figure 65: Current financial situation, by repertoire of monthly expenditure have done in the last three months, March 2013
                                                                                                                    • Figure 66: Changes in financial situation, by repertoire of monthly expenditure have done in the last three months, March 2013
                                                                                                                    • Figure 67: Monthly expenditure have done in the last three months, by repertoire of monthly expenditure have done in the last three months, March 2013
                                                                                                                    • Figure 68: Repertoire of monthly expenditure plan to do in the next three months, March 2013
                                                                                                                    • Figure 69: Current financial situation, by repertoire of monthly expenditure plan to do in the next three months, March 2013
                                                                                                                    • Figure 70: Changes in financial situation, by repertoire of monthly expenditure plan to do in the next three months, March 2013
                                                                                                                    • Figure 71: Monthly expenditure plan to do in the next three months, by repertoire of monthly expenditure plan to do in the next three months, March 2013
                                                                                                                    • Figure 72: Repertoire of monthly expenditure have done in the last three months, by demographics, March 2013
                                                                                                                • Appendix – Discretionary Spending

                                                                                                                    • Figure 73: Discretionary spending, March 2013
                                                                                                                    • Figure 74: Most popular discretionary spending, by demographics, March 2013
                                                                                                                    • Figure 75: Next most popular discretionary spending, by demographics, March 2013
                                                                                                                    • Figure 76: Other discretionary spending, by demographics, March 2013
                                                                                                                • Appendix – Shopping Habits

                                                                                                                    • Figure 77: Shopping habits, March 2013
                                                                                                                    • Figure 78: Any agreement with shopping habits, by current financial situation, March 2013
                                                                                                                    • Figure 79: Any agreement with shopping habits, by changes in financial situation, March 2013
                                                                                                                • Appendix – Cluster Analysis

                                                                                                                    • Figure 80: Target groups, March 2013
                                                                                                                    • Figure 81: Current financial situation, by target groups, March 2013
                                                                                                                    • Figure 82: Changes in financial situation, by target groups, March 2013
                                                                                                                    • Figure 83: Factors that lead to a happy life, by target groups, March 2013
                                                                                                                    • Figure 84: Monthly expenditure, by target groups, March 2013
                                                                                                                    • Figure 85: Discretionary spending, by target groups, March 2013
                                                                                                                    • Figure 86: Any agreement with shopping habits, by target groups, March 2013
                                                                                                                    • Figure 87: Target groups, by demographics, March 2013

                                                                                                                Companies Covered

                                                                                                                To learn more about the companies covered in this report please contact us.

                                                                                                                Marketing to the Middle Classes - China - June 2013

                                                                                                                £3,195.84 (Excl.Tax)