Table of Contents
Executive Summary
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- Overview of the Chinese economy and people in 2015
- The economy
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- Figure 1: Annual GDP (RMB billion) and year-on-year growth rate, 2006-15
- The people
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- Figure 2: Total China population and trends, by urban and rural, 2006-15
- Consumer expenditure
- Consumer spending in 2015
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- Figure 3: Consumer expenditure, by sector (RMB billion), 2015
- Market dynamics: Mass markets vs niche markets
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- Figure 4: % change in total expenditure, by market sectors, 2014-15; % of surveyed consumers who claim to have spent more in 2015 as compared to 2014, by market sectors, January 2016
- Forecast for the next five years
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- Figure 5: Best- and worst-case forecast total value sales, 2010-20
- Consumer trends in lifestyle and spending habits
- Consumers evolving into healthier lifestyles
- Overall happiness is yet to be lifted
- Majority of consumers have increased spending
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- Figure 6: Changes in spending, January 2016
- Experiential discretionary spending drives overall expenditure
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- Figure 7: Most common ways used to reward oneself, January 2016
- Online shopping booms
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- Figure 8: Changes in the amount spent in different shopping channels, January 2016
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- Figure 9: Shopping habits – Internet usage, January 2016
- Overseas shopping rises as threat to domestic spending
- What we think
China Today – The Economy
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- Tertiary industry leads economic growth
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- Figure 10: Annual GDP (RMB billion) and year-on-year growth rate, 2006-15
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- Figure 11: GDP contributions by industrial sectors, 2011-15
- Moving towards a technology-driven, environmentally-friendly economy
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- Figure 12: % increase in fixed asset investment, by industries, 2014-15
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- Figure 13: % increase in the output of selected industrial products, 2014-15
- Domestic consumption drives economic growth
- Online retailing acting as a main driver of domestic consumption
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- Figure 14: Retail sales of consumer goods (RMB billion), by online and offline channels, 2011-15
China Today – The People
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- Urbanisation continues
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- Figure 15: Total China population and trends, by urban and rural, 2006-15
- Increasing disposable income drives demand for higher living quality
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- Figure 16: Annual disposable income and trends, 2011-15
- Figure 17: Kitchen and bathroom of a rural household, 2015
- The internet brings urban life to rural consumers
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- Figure 18: Internet penetration, by urban and rural, 2011-15
- Offsetting the aging problems
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- Figure 19: Age structure of the Chinese population, by gender, 2014
Expenditure Overview
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- Sector breakout
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- Figure 20: Consumer expenditure, by sector (RMB Billion), 2015
- Steadily slowing growth expected to continue
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- Figure 21: Best- and worst-case forecast total value sales, 2010-20
- Winners in the next five years
- Holidays
- Leisure and entertainment
- Trading-up in food and beverages
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- Figure 22: Fastest-growing market sectors, at current prices, by % growth, 2015-20 (est)
- Slower growth sectors for the next five years
- Alcoholic drinks
- Foodservice
- Home and household
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- Figure 23: Slower-growing market sectors, at current prices, by % growth, 2015-20 (est)
In-home Food
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- What you need to know
- What we think
- Rising food prices drive steady year-on-year growth
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- Figure 24: Chinese in-home food expenditure, 2010-15
- Opting for more convenient and healthier food drives further growth
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- Figure 25: Best- and worst-case forecast for in-home food, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Consumers spend more on food for healthier diets
- Treat food reveals opportunity to trade up
- Natural ingredients and healthy processing methods are key attributes of healthy food
Foodservice (Eating out and Takeaways)
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- What you need to know
- What we think
- Demand for experiential consumption can outweigh the impact of the economic slowdown
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- Figure 26: Chinese foodservice expenditure, 2010-15
- Eagerness for healthier diets will drive future growth
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- Figure 27: Best- and worst-case forecast for foodservice market, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Dining out is the number one leisure activity
- Consumers are willing to invest for healthier diets, while seasonal and organic ingredients remain influential
- Expanding into more non-mainstream dining period and snacking varieties
Non-alcoholic Drinks
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- What you need to know
- What we think
- Category structure changes towards healthier and category-blurring products
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- Figure 28: Chinese non-alcoholic drinks expenditure, 2010-15
- Continuously increasing spending for healthy non- alcoholic drinks
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- Figure 29: Best- and worst-case forecast for non-alcoholic drinks, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Most consumers are keeping the same spending habit on non-alcoholic drinks
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- Figure 30: Changes in the amount spent in food and drink sectors, by demographics, January 2016
- Flavoured water has an inherently unhealthy image but this could be reversed if flavours are sourced naturally
- Looking for category-fused options
- Interest in demographic-specific soft drink products
Alcoholic Drinks Out of Home
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- What you need to know
- What we think
- Wine and beer growth help on-trade consumer expenditure
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- Figure 31: Consumer expenditure on alcoholic drinks out of home, 2010-15
- Aspiration for high-quality products and sociable lifestyles will drive future growth
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- Figure 32: Best- and worst-case forecast value sales of the alcoholic drinks out of home, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Majority spent about the same on on-trade alcoholic drinks compared with last year
- Dining out and entertaining are key drivers for alcoholic drinks out-of-home consumption
- Lack of category competitiveness according to consumer segmentation and targeting
Alcoholic Drinks In Home
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- What you need to know
- What we think
- E-commerce helps off-trade consumer expenditure
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- Figure 33: Consumer expenditure on alcoholic drinks in home, 2010-15
- Aspiration for category premiumisation and shopping habits of convenience will drive future growth
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- Figure 34: Best- and worst-case forecast value sales of the alcoholic drinks in home, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Consumers have increased spending priority and switched shopping habits online
- Price comparison and brand loyalty are key drivers for upgraded consumption and spending
Beauty and Personal Care
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- What you need to know
- What we think
- The beauty sector is resistant to economic slowdown
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- Figure 35: Chinese beauty and personal care expenditure, 2010-15
- Booming mobile shopping will support future growth
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- Figure 36: Best- and worst-case forecast for beauty and personal care, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Spending on beauty remains strong
- Women love to reward themselves with beauty goodies
- The contrast between the lowest income and highest income groups presents great opportunities for the beauty market
- Take a holistic approach of beauty
OTC and Pharmaceuticals
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- What you need to know
- What we think
- Widening access and big health awareness fuel growth
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- Figure 37: Chinese OTC pharmaceuticals expenditure, 2010-15
- The aging population will continue to fuel future growth
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- Figure 38: Best- and worst-case forecast for OTC pharmaceuticals, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Spending on health stands strong
- Healthcare services have great potential amongst women
- Consumers show awareness of the importance of both mental health and body health
Clothing and Accessories
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- What you need to know
- What we think
- Greater competition as consumers go casual
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- Figure 39: Chinese clothing & accessories expenditure, 2010-15
- Aspiration for healthier and trendier lifestyles will drive future growth
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- Figure 40: Best- and worst-case forecast for clothing & accessories, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Consumers have spent more on clothing and accessories than any other segment
- Clothing and accessories the leading self-reward purchase type
- Menswear buying veering towards more stylish looks
Household Care
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- What you need to know
- What we think
- A steadily-growing market thanks to the increasing number of households
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- Figure 41: Chinese household care expenditure, 2010-15
- Consumers’ evolving living standards will drive future growth
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- Figure 42: Best- and worst-case forecast for household expenditure, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Opportunity for imported and premium household care products
- Females no longer the sole target of household care products
Technology and Communications
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- What you need to know
- What we think
- Steady growth within the technology and communications sector
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- Figure 43: Chinese technology and communication expenditure, 2010-15
- Steady growth expected in the next five years
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- Figure 44: Best- and worst-case forecast for technology and communication expenditure, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Consumers are spending more on technology and communication
- No significant difference across tier one, two and three cities
- The premiumisation of technology products
- The rise of domestic brands
Leisure and Entertainment
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- What you need to know
- What we think
- Evolving spending priorities drove leisure spending in recent years
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- Figure 45: Chinese leisure and entertainment expenditure, 2010-15
- Cultural sophistication will drive future growth
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- Figure 46: Best- and worst-case forecast for leisure and entertainment expenditure, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Consumers prioritising spending on leisure and entertainment
- Increased frequency of taking part in out-of-home leisure and entertainment activities
- Consumers would like to be connected rather than alone during leisure time
- Leisure activities targeting families are popular
- Consumers getting used to pay for virtual leisure products
Home
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- What you need to know
- What we think
- E-commerce helps to trade up home expenditure
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- Figure 47: Chinese home expenditure, 2010-15
- Aspiration for healthier and trendier lifestyles will drive future growth
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- Figure 48: Best- and worst-case forecast for home expenditure, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Consumers deprioritise trading up in household appliances
- Increased varieties bought and upgraded consumption are key drivers for household appliance spending
- Home furnishing rises to be amongst the most popular online shopping product categories
- Affluent households are more likely to buy household appliances online
Transport
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- What you need to know
- What we think
- The growth of transport market slows down due to decreasing demand for new passenger cars
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- Figure 49: Chinese transport expenditure, 2010-15
- Chinese enthusiasm for cars will drive future growth
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- Figure 50: Best- and worst-case forecast for transport, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Running errands for family and daily-commuting are the top two reasons for first car purchase
- Safety is the top reason pushing consumers’ car replacement behaviour
- People have high purchase intentions when it comes to new energy cars
Holidays
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- What you need to know
- What we think
- Great demanding on travelling still needs to be meet
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- Figure 51: Chinese holiday expenditure, 2010-15
- Outbound travelling will drive future growth
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- Figure 52: Best- and worst-case forecast for holiday expenditure, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Holidays as a reward
- Growing family travellers
- Love for local cuisines continue
Personal Finance and Housing
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- What you need to know
- What we think
- Life insurance boosts growth
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- Figure 53: Chinese personal finance and housing expenditure, 2010-15
- Mild growth for the coming years
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- Figure 54: Best- and worst-case forecast for personal finance and housing, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Insurance products are not only a protection but also a financial tool
- Increased adoption of financial tools
- Rising of financial products
Miscellaneous
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- What you need to know
- What we think
- To-your-door consumer services booming
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- Figure 55: Chinese miscellaneous expenditure, 2010-15
- Aspiration for healthier and trendier lifestyles will drive future growth
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- Figure 56: Best- and worst-case forecast for miscellaneous expenditure, at current prices, 2010-20
- Winners for 2016
- Losers for 2016
- Key consumer findings
- Smartphone-based consumer services apps market booming
- Elderly care services likely to grow strongly in coming years
The Consumer – What You Need to Know
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- Consumers evolving into healthier lifestyles
- Overall happiness is yet to rise
- The majority are increasing their spending
- Experiential discretionary spending drives overall expenditure
- Online and overseas shopping are rising
Changes in General Lifestyle
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- The majority spent more in 2015
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- Figure 57: Changes in spending, by age and income, January 2016
- More items on the shopping list
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- Figure 58: Changes in spending, by demographics, January 2016
- Moving towards healthier and more relaxing lifestyles
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- Figure 59: Changes in general lifestyles, by demographics, January 2016
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- Figure 60: Changes in leisure lifestyles, by demographics, January 2016
- Overall happiness are yet to increase
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- Figure 61: Agreement with statement “I feel happier”, by demographics, January 2016
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- Figure 62: Changes in lifestyles, by agreement with statement “I feel happier”, January 2016
Trends in Spending Priorities
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- Most consumers increased spending on clothing, eating, leisure and technology products
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- Figure 63: Changes in the amount spent in different sectors, January 2016
- Spending on holidays will continue to grow
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- Figure 64: % of consumers who have spent more on selected market sectors, by age and gender, January 2016
- Beauty brands can focus on young females and social occasions
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- Figure 65: % of consumers who have spent more in selected sectors, by income, January 2016
Ways of Rewarding Oneself
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- Clothing and accessories, food and domestic holidays are most common ways used for self-treating
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- Figure 66: Most common ways used to reward oneself, by gender, January 2016
- High income consumers find greater indulgence in travelling
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- Figure 67: Selected ways used to reward oneself, by income, January 2016
Changes of Spending in Different Shopping Channels
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- Online shopping is the big winner
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- Figure 68: Changes in the amount spent in different shopping channels, January 2016
- Convenience of access drives spending via online channels
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- Figure 69: Reason for increased spending in different shopping channels, January 2016
- Shopping for premium products from overseas and department stores
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- Figure 70: Increased spending in different shopping channels due to upgrading, January 2016
- Price increases are more of an issue in brick-and-mortar stores than virtual channels
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- Figure 71: Increased spending in different shopping channels due to price rose, January 2016
Trends in Shopping Habits
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- Increasing loyalty
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- Figure 72: Shopping habits – Loyalty towards retailers/brands, January 2016
- Buy as you like
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- Figure 73: Shopping habits – Impulse purchase, January 2016
- Better product quality will drive online retailers to grow further
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- Figure 74: Shopping habits – Internet usage, January 2016
Meet the Mintropolitans
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- More holidays and exercise to drive lifestyle evolution
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- Figure 75: Changes in general lifestyles, by target groups, January 2016
- Overseas shopping will soon tap into the mass market
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- Figure 76: % of consumers who have spent more in different channels, by target groups, January 2016
- Experiential expenditure to drive discretionary spending
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- Figure 77: Most common ways used to reward oneself, by gender, January 2016
- The next big things
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- Figure 78: Shopping habits, by target groups. January 2016
Appendix – Methodology and Abbreviations
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- Methodology
- Mintropolitans
- Why Mintropolitans?
- Who are they?
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- Figure 79: Demographic profile of Mintropolitans vs Non-Mintropolitans, by gender, age and personal income
- Figure 80: Demographic profile of Mintropolitans vs Non-Mintropolitans, by marital status, city tier and education level
- Abbreviations
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