Exploding consumption! World’s largest market! More confirmation this week from two surveying agencies.
The Women’s Federation released a study this week through its Huakun data arm on the shopping habits of urban women. Some tasty info for advertisers and marketers - women aged 31 to 40 are the largest consumer group, outspending other groups on beauty, entertainment, travel, cosmetics, clothing, and books. And married women spend quite differently from singles - the biggest expenses for women overall were travel, a computer, a cell phone, education, and cosmetics, while for married women the top expenses were a house, appliances, and interior decorating.
There were other interesting results. All but a foolhardy 2% were concerned about consumer safety, with food safety unsurprisingly topping the list of 40.5% of women surveyed. Fashion, too, is a concern, in that apparently most urban Chinese women feel that they should be more fashionable then they are. Most respondents rated other cities as more fashionable than their own. Even in Shanghai, rated as the most fashionable Chinese city by the vast majority of women surveyed, local women rated it at the bottom. Nanjing produces the most pride in its residents; 42% of women from Nanjing felt that they were “very fashionable.”
These women, evidently, will be the driving force behind the upsurge in luxury consumption China will experience over the next decade. According to a Goldman Sachs study, China will seize the top spot from Japan in 2015, when it will consume 29% of the world’s luxury goods.
Just three years ago, China accounted for 1% of world luxury consumption, but last year consumers spent US$6 billion on luxury goods, not including the odd yacht or private jet. It’s strange that given the dominance of 31-40 year old women in the Huakun study, consumers aged 20-30 propel luxury sales, according to Goldman Sachs. China does, however, have eight times as many of these consumers as Japan, so like other sectors, it’s inevitable, really, that China will eventually become the World’s Largest Market.
In the scandal of the week, one of China’s richest people, Zhou Yiming, denied reports that he had been detained by police shortly before the authorities confirmed that he had been detained. Zhou, a 30-year-old corporate executive who was on the rich list in 2003, had invested his Minglun Group in Sichuan’s Mingxing Electric Power a few years back, and had apparently used his position as CEO to misuse company assets and apply for fraudulent bank loans.
A local paper, the Chongqing Economic Times reported his detainment, as well as the takeover of the company by the local government of Suining City. Another local paper, Chengdu Economic Daily, reported the denials, going so far as to interview Zhou by telephone. Shortly afterward, the national press confirmed the initial reports.
Another Sichuan-based company had better luck this week. Changhong, the television giant, took a step into the European market with the establishment of a plant in the Czech Republic. A US$30 million venture, the facture will work with R&D, manufacturing, and sales.
Also in the news this week:
- China Business News says that Sohu’s victory over Sina in the race for Olympic sponsorship may be meaningless since Olympic restrictions on advertising may prevent Sohu from profiting off of any increased traffic. And since the Olympics have never issued credentials to Internet journalists, Sohu really has nothing unique to offer apart from the official Olympic website.
- Convenience stores are generally money-losing operations, China Business reports in an analysis of the profitability prospects for Seven-Eleven following Wangfujing’s buy-in announcement
- Carrefour bought one of Shanghai’s NextMart superstores after months of rumors that it would acquire the company. Apparently the French giant is still navigating the labyrinthine ownership structure of NextMart’s seven locations.
These summaries were collected from the The China Perspective, which covers major business news and trends in the China marketplace.
By Joel Martinsen