Marketing to the Middle Class - China - June 2014
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“As a result of the government’s plans to reduce income disparity and also the living quality gap between rural and urban areas, the minimum wage has been rising in order to encourage China’s domestic consumption. Also, as the government is investing to upgrade the transport infrastructure throughout the country, this not only provides more employment opportunities in the Central/Western part of the country, but also stimulates income growth as there is increasing demand for technical jobs especially in the automotive and communications industries. The increase in wages, as a consequence, has allowed various lower income earners, typically those in the lower tier cities, to achieve middle class status.
– Lui Meng Chow, Research Analyst
In this Mintel exclusive survey, the definition of middle class is primarily based on the respondent’s income level, without any consideration of their property or car ownership. The income criteria are slightly raised compared to Mintel’s Marketing to the Middle Classes – China, June 2013 report due to the increased average income of Chinese consumers.
There is still much debate on defining middle class consumers through their professions in China. However, as China’s economy has been growing rapidly over the past three decades, the social status of Chinese people is also fast-evolving and as a result, social status and income do not always correlate with profession or employment status. There is fierce competition in China for various skilled technicians and workers particularly engineers and R&D technicians in the communications and automobile industries. As a result these technicians often receive higher salaries than ‘white collar’ office workers, and are considered to belong to the middle class as a result.
There are also many fuerdai (second generation of the rich, which refers to young adults, mostly the only child in their families, born after the mid-1980s), some of whom are still students, graduates who may work part-time, and who enjoy a comfortable lifestyle, being very willing to spend money due to their financially-supportive parents and who often act as the influencer/purchaser for their family.
The emergence of the property privatisation market and internet has also offered numerous opportunities for Chinese consumers to generate extra income outside of their own professions.
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