The advent of towering office buildings, glitzy malls and unending super highways will quickly capture the eye of any traveller looking for signs of the new China. Yet beyond the glamour and scale, the day-to-day lives of China’s people best signify the huge advancement of the nation since its reformative years four decades ago.
In 1979, the average Chinese person lived in 9 metres of space with a shared tap, kitchen bench and neighbourhood john. Over the next 38 years the average living area has grown by almost 400%, and with it kitchens adorned in shiny appliances and bathrooms of a much more private nature.
The average Chinese home is no longer just a functional place to sleep but a valued feature of their lives. This evolution has been embraced by Chinese consumers and has seen living spaces across the country transform into increasingly comfortable and aesthetic abodes. This is reflected by some of the fastest-growing categories in last quarter’s robust 10.9% retail growth. Building and decoration materials purchases rose 17.8%, furniture increased 13.8% and home appliances grew over 12% in the year to March. The growth contributed to the overall rise in consumption which accounted for close to 80% of China’s higher-than-expected 6.9% GDP growth.
Freshly painted walls, plush new armchairs and smart appliances are all representative of a trend which is seeing more Chinese eating at home, entertaining at home and even baking at home. A few years ago consumption of most premium food items took place in public. Premium purchases were a chance to display your superior status, and consuming one privately would just be a waste. However today’s consumers can happily power through a tub of Haagen Dazs on the sofa just for the pleasure of it, and many more consumers are driven to more discrete locales for indulgence following Xi Jinping’s anti-graft campaign. All these elements culminate in a significant shift in home consumption.
Another contributing factor is the abundance of products available to consumers and finding their way into more and more fridges and pantries across the country. An average of 160 new consumer products hit store shelves every day for the past 12 months according to Mintel. Add that to the host of new apps, cross border commerce listings, new restaurants, cinemas, theme parks and airline routes, and Chinese have never had more to choose from. It is little wonder they keep spending more.
The good: Chinese consumers just keep buying more. The bad: direct and indirect competitors all vying for a share of China’s wallets are growing too. The prize is getting bigger, but it is also much harder to obtain. Something that may assist is China Skinny’s free five day email course to ensure that you have the main areas covered, know what to watch out for, and it may just help you tap into that increased spending, both in the home and out. The course starts on 2 May, so best to sign up today. For our Dubai-based readers, China Skinny’s Mark Tanner looks forward to meeting some of you at the Dubai Chamber’s Navigating China’s B2C e-Commerce Landscape workshop next Monday on 1 May. Go to Page 2 to see this week’s China news and highlights.