The China Opportunity
“Sell your products/services into the second largest (and growing) market in the world.”
Rapid Economic Growth
China’s economy has expanded exponentially since Deng Xiaoping’s economic reform. After opening up to the world in 1978, China’s GDP has risen from $150 billion to a whopping $11.2 trillion in 2016. This growth, with an average of 10 percent per year, has lifted more than 600 million people out of poverty and now China has the world’s second largest GDP, just behind the United States.
After joining the WTO in 2001, China achieved great milestones.
China has become the world’s largest merchandise exporter
The world’s leader in Foreign Direct Investment among developing countries
The world’s fourth largest commercial services provider.
Large Focus On Consumption
China’s consumer economy has grown by 10 percent per year, which is the fastest in the world. By 2021, China will add $1.8 trillion in new consumption, which is more than one-fourth of the total consumption growth in all major economies.
A huge reason for China’s consumerism boom is due to the rise of a large middle class (over 300M) and a younger population eager to spend on all kinds of goods and new experiences. For both groups, authenticity and high quality remain a major buying decision.
An interesting facet of Chinese consumption is its reliance on the digital platform, more so than any other country in the world. E-commerce sites such as Taobao, TMall, and JD.com dominate the Chinese Market, delivering items right to the consumer’s door. International brands have just started to make their own stores on Taobao and Tmall.
By 2021, 90% of purchases in China will be digital at any given point in the purchasing process. This includes browsing for items online, comparing prices, or making the actual purchase. Besides the purchasing experience, Chinese social media is a huge part of the digital economy. WeChat, a social platform is used by seemingly everyone with a smartphone in China, is frequently trafficked. The photos, posts, and other information relating to specific goods are shared by people to the outside world, which further stimulates the consumption.
China’s economy is evolving into a consumer driven economy, and consumers are becoming much more diverse in their spending — wanting the highest quality and unique goods.
Unprecedented demand exists, and American companies need to get in the game.