While the US is still the biggest economy globally, they have some steep competition in the form of the Chinese. The growth of the middle class in China has put their economy on a fast track to dethrone the mighty dollar.
This is something that many American businesses have taken note of, but many people are still clueless as to how this can impact their business.
Many people still live with the idea that anything that comes from China is a knockoff or of poor quality, but that stigma is slowly losing its validity. So what do the Chinese middle-class growth and the growth of their economy have to do with American businesses?
Looking at the retail power
Many people associate China with sweatshops and cheap labor, but their middle class is one of the biggest groups in the world. It is estimated that their middle class will have grown to a mammoth 550 million people by 2022. This means that their middle class will be one and a half times bigger than the entire US population.
When one combines that figure with globalization and the development of the online retail market, then it spells one thing, massive buying power. When you look at it from that perspective, getting in on the action seems very attractive.
Luckily, the market is open and all that businesses need to do is get listed on Tmall. The easiest and safest way to do that is by partnering with WPIC, seeing that they have established connections to Tmall.
Buying habits
China has evolved into a super-consumer country and that is largely due to the ever-growing middle class. As they enter their new economic status, they immediately have an urge to splurge.
This creates a robust consumer market and propels the Chinese market even further. If big retailers like Walmart have been investing in China, then it must point to something bigger.
Looking at the signs
Retailers the world over have taken notice of the massive buying power of the Chinese middle class. It is not just the buying power of the middle class that is piquing their interest, but entertainment and education as well.
Retail, entertainment and education are three of the most lucrative industries in China and as the middle class grows, they also feel the need to tap into these industries.
Not only have companies like Walmart invested millions of dollars, but entertainment giant Dreamworks partnered with the Chinese film studio, Pearl Studio. Together, they created the movie Abominable and Over the moon, both of which were massive hits.
Made in China is a good thing nowadays
Now that the local Chinese middle class has some money to throw around, it seems as though several local brands are starting to outperform some of the western giants. Nike has always been big in China, but a local brand, Huili, has outperformed Nike by quite a margin.
Their products have heavy Chinese influence, but when one takes hands with one of their local brands, it could develop into a massive sales market. Now, when the locals speak, the global market needs to listen or miss out on millions.
Looking back and ahead
In 2000, the Chinese middle class made up only around 3% of the country’s population, but through constant economic development and investment, that number has grown considerably.
Today, more than half the country is considered to be part of the middle class and their growth is not looking to slow down any time soon. It took less than two decades to uplift more than half the country out of poverty and those numbers are only going to grow faster in the years to come.