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Sunday July 02, 2006

Chinese consumer numbers

In a front page article of the China Daily today, it looks at the income of Chinese people buying luxury goods, such as digital electronics devices, fancy watches, etc. The column article goes on to break up surveyed consumers into 3 groups - first-world, second-world and third-world.

In their survey of 40 million people across 10 cities, the breakdown was roughly 15%, 80% and 5% respectively. The average annual income is 218,000RMB (US$27,250) for first-world spenders, 19,680RMB (US$2,460) for second-world spenders and the third-world group are those who are poverty stricken. Compare that with numbers for the USA, where the average income fell in 2001-2004 but is still at least twice what the top group in China earn.

So when you're preparing that business plan for expansion into China and thinking about those 1.3 billion people, remember that unless you're selling food, currently your target market is less than 200 million.