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Consumer Lifestyles: China's Middle Class - China - June 2012

INTRODUCTION
To understand China’s retail consumption boom is to meet China’s new middle class
Definition
Consumer research survey – definition
EXECUTIVE SUMMARY
A history of the middle class in china
Defining the middle class
How the middle class has emerged
Figure 1: Region lived in during childhood, by city, April 2012
Attitudes towards property ownership
Figure 2: Household composition, April 2012
Education is the core foundation
The connected middle class – smartphones and smart shopping
Figure 3: Brand of smartphone owned, by city, April 2012
Middle class spending habits
Figure 4: Purchase of luxury items abroad, April 2012
A HISTORY OF THE MIDDLE CLASS IN CHINA
Summary
Definitions influenced by political influence
Defining China’s middle class – the economics
Figure 5: Defining the China middle class – household income parameters, 2003-12, per annum income required to be middle class in Tier 1 China
Defining China’s middle class – the caveats
HOW MUCH HAS CHINA’S MIDDLE CLASS GROWN?
Summary
Only a small proportion of households are middle class
Figure 6: China’s shrinking demographics, 2000-12
Why has the middle class grown so quickly?
Urbanisation
Wage growth
Subsidies and taxation
Expansion of chain retailing
Figure 7: The continued growth of organised chain retailing in china, 2007-11
The edge-city middle class – to the ’burbs
Savings and credit
Greater ‘freedom’ of press drives consumerism
HOW THE MIDDLE CLASS HAS EMERGED
Summary
The rapid ascent from blue collar backgrounds
Emergence of women as ‘equals’ accentuates growth
Figure 8: Father’s/mother’s working background, April 2012
The rural-urban migration
Figure 9: Region lived in during childhood, by city, April 2012
Figure 10: Region lived in during childhood, by age group, April 2012
Financial prudence laid foundations for consumerism to flourish
Figure 11: Living situation during childhood, April 2012
Figure 12: Living situation during childhood, by city, April 2012
ATTITUDES TOWARDS PROPERTY OWNERSHIP
Summary
Property is highly desired by the middle classes
Figure 13: Type of primary residence, April 2012
Figure 14: Type of property ownership, by city, April 2012
Figure 15: Number of bedrooms in property, April 2012
Ageing population sets future challenge for middle classes
Figure 16: Household composition, April 2012
EDUCATION IS THE CORE FOUNDATION OF MIDDLE CLASS CHILDREN
Summary
Education has the highest priority across all of China
Figure 17: Type of children’s education, April 2012
Figure 18: Financial impact of children’s education, April 2012
Figure 19: Further education currently undertaken, by city, April 2012
Figure 20: Type of further education currently undertaken, April 2012
FINANCES – SAVING FOR RAINY DAYS BUT LEARNING TO LOVE CREDIT
Summary
Savings dominate financial behaviour
Figure 21: Monthly savings rate, April 2012
Figure 22: Monthly savings rate, by gender, April 2012
Figure 23: The propensity to save and pay down debt, April 2012
Figure 24: Credit card possession, by city, April 2012
THE CONNECTED MIDDLE CLASS – SMARTPHONES AND SMART SHOPPING
Summary
High repeat sales due to poor quality of goods
Figure 25: Monthly expenditure on appliances, April 2012
Figure 26: Technology ownership - household, April 2012
Figure 27: Technology ownership - personal, April 2012
Figure 28: Brand of smartphone owned, April 2012
Figure 29: Brand of smartphone owned, by city, April 2012
Use of technology drives online engagement
Figure 30: Online shopping, April 2012
MIDDLE CLASS SPENDING HABITS
Summary
Range and frequency of leisure activities undertaken is extensive
Figure 31: Leisure activities, April 2012
Car ownership indicative of aspiration levels
Figure 32: Monthly expenditure on cars, April 2012
Figure 33: Monthly expenditure on cars, by gender and age group, April 2012
Figure 34: Monthly expenditure on cars, by city, April 2012
Discretionary spending reflects value of this consumer group
Figure 35: Discretionary spending, April 2012
Luxury market in China is increasingly competitive
Figure 36: Luxury brand possession, April 2012
Figure 37: Luxury brand possession, by age and gender, April 2012
Figure 38: Luxury item buying intention, April 2012
Many luxury items are purchased outside of China
Figure 39: Purchase of luxury items abroad, April 2012
EXPANSION IN TRAVEL CHANGES MIDDLE CLASS PERSPECTIVE
Summary
International and domestic travel is rising rapidly
Figure 40: Holidays taken in the last 12 months, April 2012
SOME ISSUES WORTH THINKING ABOUT…
The loss of the little guy – the growth of organised retailing
Monoculture – China’s globalised middle class
When it comes to the middle class bulge, is China the new Japan?
Influencing the nation – the middle class as inspiration
THE FUTURE OF THE MIDDLE CLASS
China’s middle class created by Shengshi…
The future growth of the middle class will come from tier 2 and tier 3 cities
APPENDIX – A HISTORY OF THE MIDDLE CLASS IN CHINA
Figure 41: Defining the middle class in China, 1999-2015
Figure 42: Defining the middle class in China, 1999-2015 (continued)
APPENDIX – BACKGROUND AND CURRENT LIVING SITUATION
Figure 43: Region lived in during childhood, April 2012
Figure 44: Region lived in during childhood, by demographics, April 2012
Figure 45: Living situation during childhood, April 2012
Figure 46: Living situation during childhood, by demographics, April 2012
Figure 47: Father's/Mother's working background, April 2012
Figure 48: Most popular father's working background, by demographics, April 2012
Figure 49: Next most popular father's working background, by demographics, April 2012
Figure 50: Other father's working background, by demographics, April 2012
Figure 51: Most popular mother's working background, by demographics, April 2012
Figure 52: Next most popular mother's working background, by demographics, April 2012
Figure 53: Other mother's working background, by demographics, April 2012
Figure 54: Type of primary residence, April 2012
Figure 55: Most popular type of primary residence, by demographics, April 2012
Figure 56: Number of bedrooms in property, April 2012
Figure 57: Number of bedrooms in property, by demographics, April 2012
Figure 58: Type of property ownership, April 2012
Figure 59: Type of property ownership, by demographics, April 2012
Figure 60: Household composition, April 2012
Figure 61: Household composition, by demographics, April 2012
Figure 62: Type of children's education, April 2012
Figure 63: Most popular type of children's education, by demographics, April 2012
Figure 64: Next most popular type of children's education, by demographics, April 2012
Figure 65: Financial impact of children's eductaion, April 2012
Figure 66: Most popular financial impact of children's eductaion, by demographics, April 2012
Figure 67: Next most popular financial impact of children's eductaion, by demographics, April 2012
Figure 68: Further education currently undertaken, April 2012
Figure 69: Further education currently undertaken, by demographics, April 2012
Figure 70: Type of further education currently undertaken, April 2012
Figure 71: Type of further education currently undertaken, by demographics, April 2012
Figure 72: Monthly savings rate, April 2012
Figure 73: Most popular monthly savings rate, by demographics, April 2012
Figure 74: Next most popular monthly savings rate, by demographics, April 2012
Figure 75: Credit card possession, April 2012
Figure 76: Credit card possession, by demographics, April 2012
APPENDIX – PRODUCT OWNERSHIP – TECHNOLOGY
Figure 77: Technology ownership – Household, April 2012
Figure 78: Most popular technology ownership – Household, by demographics, April 2012
Figure 79: Next most popular technology ownership – Household, by demographics, April 2012
Figure 80: Other technology ownership – Household, by demographics, April 2012
Figure 81: Technology ownership – Personal, April 2012
Figure 82: Technology ownership – Personal, by demographics, April 2012
Figure 83: Smartphone ownership, April 2012
Figure 84: Smartphone ownership, by demographics, April 2012
Figure 85: Brand of smartphone owned, April 2012
Figure 86: Most popular brand of smartphone owned, by demographics, April 2012
Figure 87: Next most popular brand of smartphone owned, by demographics, April 2012
APPENDIX – SPENDING HABITS
Figure 88: Monthly expenditure, April 2012
Figure 89: Monthly expenditure – Add to my savings, by demographics, April 2012
Figure 90: Monthly expenditure – reduce non-mortgage debts (credit card, personal loan, overdraft etc), by demographics, April 2012
Figure 91: Monthly expenditure – book a holiday, by demographics, April 2012
Figure 92: Monthly expenditure – buy major domestic appliance (washing machine, fridge etc), by demographics, April 2012
Figure 93: Monthly expenditure – buy new electrical equipment (television, PC, games console etc), by demographics, April 2012
Figure 94: Monthly expenditure – buy/replace my car, by demographics, April 2012
Figure 95: Monthly expenditure – spend money on my home (new kitchen, redecorate, new furniture etc), by demographics, April 2012
Figure 96: Monthly expenditure – dine out in a higher priced restaurant (ie no take away or fast food restaurants), by demographics, April 2012
Figure 97: Monthly expenditure – go to a concert/sporting event/theatre, by demographics, April 2012
Figure 98: Monthly expenditure – buy new clothes, by demographics, April 2012
Figure 99: Discretionary spending, April 2012
Figure 100: Most popular discretionary spending, by demographics, April 2012
Figure 101: Next most popular discretionary spending, by demographics, April 2012
Figure 102: Other discretionary spending, by demographics, April 2012
Figure 103: Least popular discretionary spending, by demographics, April 2012
APPENDIX – SHOPPING HABITS – LUXURY
Figure 104: Online shopping, April 2012
Figure 105: Most popular online shopping, by demographics, April 2012
Figure 106: Next most popular online shopping, by demographics, April 2012
Figure 107: Luxury brand possession, April 2012
Figure 108: Most popular luxury brand possession, by demographics, April 2012
Figure 109: Next most popular luxury brand possession, by demographics, April 2012
Figure 110: Luxury item buying intention, April 2012
Figure 111: Most popular luxury item buying intention, by demographics, April 2012
Figure 112: Next most popular luxury item buying intention, by demographics, April 2012
Figure 113: Purchase of luxury items abroad, April 2012
Figure 114: Most popular purchase of luxury items abroad, by demographics, April 2012
Figure 115: Next most popular purchase of luxury items abroad, by demographics, April 2012
APPENDIX – HOLIDAY HABITS
Figure 116: Holidays taken in the last 12 months, April 2012
Figure 117: Most popular holidays taken in the last 12 months, by demographics, April 2012
Figure 118: Next most popular holidays taken in the last 12 months, by demographics, April 2012
Figure 119: Other holidays taken in the last 12 months, by demographics, April 2012
Figure 120: Least popular holidays taken in the last 12 months, by demographics, April 2012
Figure 121: Most popular independent holidays taken in the last 12 months, by demographics, April 2012
Figure 122: Next most popular independent holidays taken in the last 12 months, by demographics, April 2012
Figure 123: Other independent holidays taken in the last 12 months, by demographics, April 2012
Figure 124: Least popular independent holidays taken in the last 12 months, by demographics, April 2012
Figure 125: Most popular package holidays taken in the last 12 months, by demographics, April 2012
Figure 126: Next most popular package holidays taken in the last 12 months, by demographics, April 2012
Figure 127: Other package holidays taken in the last 12 months, by demographics, April 2012
Figure 128: Least popular package holidays taken in the last 12 months, by demographics, April 2012
Figure 129: Holiday spending, April 2012
Figure 130: Most popular holiday spending, by demographics, April 2012
Figure 131: Next most popular holiday spending, by demographics, April 2012
APPENDIX – ATTITUDES AND BEHAVIOURS – LEISURE
Figure 132: Leisure activities, April 2012
Figure 133: Eat out at a restaurant, by demographics, April 2012
Figure 134: Visit bars/pubs, by demographics, April 2012
Figure 135: Go to the cinema, by demographics, April 2012
Figure 136: Go to a nightclub, by demographics, April 2012
Figure 137: Go to the theatre/musical/opera, by demographics, April 2012
Figure 138: Visit a cultural venue, by demographics, April 2012
Figure 139: Attend live sports events, by demographics, April 2012
Figure 140: Visit a zoo/wildlife park, by demographics, April 2012
Figure 141: Go to music concerts/festivals, by demographics, April 2012
Figure 142: Do DIY/home improvement, by demographics, April 2012
Figure 143: Tend your own garden/allotment/grow own fruit and vegetables, by demographics, April 2012
Figure 144: Play video games, by demographics, April 2012
Figure 145: Use a public leisure centre, by demographics, April 2012
Figure 146: Use a private health and fitness club, by demographics, April 2012
Figure 147: Do recreational exercises outside of health clubs/leisure centres, by demographics, April 2012
APPENDIX – ATTITUDES TOWARDS SHOPPING
Figure 148: Attitudes towards shopping (any agree), April 2012
Figure 149: Most popular attitudes towards shopping (any agree), by demographics, April 2012
Figure 150: Next most popular attitudes towards shopping (any agree), by demographics, April 2012
Figure 151: Other attitudes towards shopping (any agree), by demographics, April 2012
Figure 152: Least popular attitudes towards shopping (any agree), by demographics, April 2012

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