Much on the consumer debate in China focuses on the high-income buyers. Time to change that, says retail analyst Shaun Rein, and author of The End of Copycat China: The Rise of Creativity, Innovation, and Individualism in Asia. Spending power of low-income consumers is going up fast, he tells KTUU.
KTUU:
Shaun Rein, the author of The End of Cheap China, said that businesses should work to harness the spending power of Chinese consumers.
Many observers, he said, are “underestimating the purchasing power of low-income Chinese. And more importantly, they’re underestimating how wealthy they’re going to be three to five years from now.”
Rein estimates there are 850 million Chinese workers earning less than $500 a month. Salaries are going up 15% a year, leaving them with more disposable income than ever before.
Rein said toy purchases allow consumers to show off some of their newly-acquired status.
“You have toys, such as Lego, that are doing very well. They’re cheap enough that they’re accessible for low-income Chinese. But they’re expensive enough to get prestige.”
“So instead of buying a Louboutin bag, people buy Lego for their family members,” Rein said.
Lego is beginning to push its brand to second and third-tier Chinese cities, according to Euromonitor. The company has opened stores in 14 new cities — including Xi’an, Dalian and Foshan. Lego has also increased investments in its education arm.
Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.
Are you interested in more stories by Shaun Rein? Do check out this regularly updated list.
Related articles
