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Marketing to the Middle Class - China - June 2014

Published By :

Mintel

Published Date : Jul 2014

Category :

Advertising and Marketing

No. of Pages : 213 Pages


As a result of the government’s plans to reduce income disparity and also the living quality gap between rural and urban areas, the minimum wage has been rising in order to encourage China’s domestic consumption. Also, as the government is investing to upgrade the transport infrastructure throughout the country, this not only provides more employment opportunities in the Central/Western part of the country, but also stimulates income growth as there is increasing demand for technical jobs especially in the automotive and communications industries. The increase in wages, as a consequence, has allowed various lower income earners, typically those in the lower tier cities, to achieve middle class status.
Table of Content

Introduction
Definition
Methodology
Limitations
Abbreviations

Executive Summary
The middle class consumer
Current financial situation
Figure 1: Current financial situation, March 2014
Financial products: Currently own or plan to buy
Figure 2: Financial products: currently own or plan to buy, March 2014
What the middle class most care about
Figure 3: What the middle class pay most attention to, March 2014
Changes in health-related activities
Figure 4: Health-related activities that are done now compared to last year, March 2014
Changes in leisure-related activities
Figure 5: Leisure related activities that are done now compared to last year, March 2014
Changes in discretionary spending
Figure 6: Discretionary spending compared to last year, March 2014
Attitudes towards health
Figure 7: Attitudes towards health, March 2014
Attitudes towards leisure lifestyles
Figure 8: Attitudes towards leisure lifestyles, March 2014
Financial perceptions and attitudes towards spending
Figure 9: Financial perceptions and attitudes towards spending, March 2014
Understanding different types of middle classes in China
Figure 10: Target groups, March 2014
Affluents – low financial pressure and high willingness for discretionary spending
Stressed-outs – high financial pressure and willingness for discretionary spending
Chill-outs – low financial pressure and willingness for discretionary spending
Entrants – high financial pressure and low willingness for discretionary spending
Key issues
What opportunities can help the middle class to achieve a healthy lifestyle?
How can financial services retain the Affluent?
How do leisure products/services target middle class?
How do premium products/services appeal to the middle class?

Chinese Middle Class – The Background
Key points
Continuous income growth breeds the middle class
Figure 11: Per capita income level in rural and urban areas, China, 2008-13
Middle class definition is evolving over time as the country’s economy develops
White collar workers constitute the bulk of the middle classes
Figure 12: Breakdown of the profession of the surveyed respondents, March 2014
Emergence of the young fuerdai (Rich 2G)
Car ownership and property ownership
Figure 13: Property ownership, March 2014
Figure 14: Car ownership, March 2014
High living pressure in tier one cities; low living pressure in tier two/three cities
Figure 15: Consumer attitudes towards financial pressure, by tier-one cities, December 2013
Figure 16: Income growth (CAGR 2008-12) and property affordability measure in 2012, by cities
Emerging middle classes in Western/Central region and lower tier cities
Figure 17: GDP, CAGR of GDP and growth measure, by cities, China 2008-12

Issues and Insights
What opportunities can help the middle class to achieve a healthy lifestyle?
The facts
The implications
How can financial service companies retain the Affluents?
The facts
The implications
How do leisure services companies target middle class consumers?
The facts
The implications
Figure 18: Attitude towards full service restaurants, by demographics, October 2013
Diversified holidays/activities offer to middle class families with children
How do premium products/services appeal to middle classes?
The fact
The implications
Figure 19: Important factors for paying a premium price, by income groups, December 2013
Figure 20: Top 5 sub-categories with environmentally friendly product claims, China, April 2010-14
Figure 21: Top 10 sub-categories with environmentally friendly product claims, China, UK and US, 2010-14 (April)
Figure 22: Selected shopping habits statements, March 2013

Trend Application
Trend: Edutainment
Trend: Help Me Help Myself
Mintel futures: Generation Next

Middle Class Consumers – Current Financial Situation
Key points
Figure 23: Current financial situation, March 2014
The 20s and 30s middle classes are likely to face financial challenges
Figure 24: Current financial situation, by age groups, March 2014
Financial situations and home ownership
Figure 25: Property ownership, by age group, March 2014
Tier two/three cities residents have less deep pockets
Figure 26: Current financial situation, by city tier, March 2014
Married middle class have healthier finances
Figure 27: Current financial situation – I have money left at the end of the month (eg for a few luxuries, adding to my savings), by selected demographics, March 2014

The Middle Class Consumer – Financial Products Currently Owned or Planning to Buy
Key points
Figure 28: Financial products: Currently own or plan to buy, March 2014
The middle class currently owns more investment products than insurance products
Figure 29: Current ownership of savings/investment products
Young middle class consumers in their 20s develop interest in futures and collections for a low entry investment point
Different interests in financial products across cities
Figure 30: Financial products consumers plan to buy, by cities, March 2014
Figure 31: Financial products consumers plan to buy, by cities, March 2014 (continued)

The Middle Class Consumer – What They Care About
Key points
Figure 32: What they most care about, March 2014
Improving health comes first across all ages but food safety and healthier diet are more important to those in their 40s
Managing finances is also important, more so for those aged 20-39
Figure 33: Selected what they most care about, by age group, March 2014
Children’s education comes close to health as a top concern for parents
Convenience-driven middle class in tier one cities
Figure 34: What they most care about – better time management, by city tier, March 2014

The Middle Class Consumer – Changes in Health-Related Activities
Key points
Figure 35: Health-related activities that are done now compared to last year, March 2014
Healthy eating is the trend amongst high income earners
Middle classes are looking for anti-pollution products and facilities
Figure 36: Activities that are done now compared to last year – Buying products that can help to protect me/my family against pollution (eg mask, air purifier for household, distilled water for water dispenser), by demographics, March 2014
Figure 37: Activities that are done now compared to last year – Buying products that can help to protect me/my family against pollution (eg mask, air purifier for household, distilled water for water dispenser) , by cities and tiers, March 2014
Extend benefits offered by environmentally friendly products
Figure 38: Activities that are done now compared to last year – Using environmentally friendly products (eg made of recyclable materials, refillable products), by demographics, March 2014

The Middle Class Consumer – Changes in Leisure-Related Activities
Key points
Figure 39: Selected leisure related activities do now compared to last year, March 2014
More participation in a wider range of leisure activities
Figure 40: Selected leisure related activities do now compared to last year, by lifestage, March 2014
Families with children
The young middle class and singletons
Married middle classes without children
More time spent surfing the internet via portable devices by higher earners
Figure 41: Activities that are done now compared to last year – Surfing the internet via portable digital gadgets (eg smartphone, tablet), by monthly personal income, March 2014

The Middle Class Consumer – Changes in Discretionary Spending
Key points
Figure 42: discretionary spending compared to last year, March 2014
Saving is not the top financial priority…
but what’s more critical to assure financial well-being is improving income
Working middle class look for self-development opportunities
Figure 43: Discretionary spending compared to last year – Education for myself or my kid(s), by selected demographics, March 2014
Electrical/digital devices are one of the most spent items amongst 20s and 30s
Figure 44: Selected discretionary spending items compared to last year, by demographics, March 2014
Potential for businesses to market on lifestyle treats/indulgence

The Middle Class Consumer – Attitudes towards Health
Key points
Figure 45: Attitudes towards health related lifestyles, March 2014
Is environmentally friendly claim relevant to the middle class?
Women, parents are more willing to pay premium to keep healthy
Figure 46: Attitudes towards lifestyle, by selected demographics, March 2014
Figure 47: An example of how health products target to women consumers, Taiwan, 2013
Busy middle classes looking for ways to de-stress
Figure 48: examples of how food and beverage brands providing emotional support, South Korea and US, May-July 2013
Express way for busy working middle classes to stay healthy

The Middle Class Consumer –Attitudes towards Leisure Lifestyles
Key points
Figure 49: Attitudes towards leisure related lifestyles, March 2014
Middle classes are moving towards more diversified leisure experience
Tier one cities’ middle classes are more likely to cut back on groceries than spend less on leisure activities

The Middle Class Consumer – Financial Perceptions and Attitudes towards Spending
Key points
Figure 50: Attitudes towards finances, March 2014
Middle class consumers in their 20s and 30s more likely to worry about their financial situation
Figure 51: Attitudes towards lifestyles, by age group, March 2014

Understanding Different Types of Middle Class Consumers in China
Key points
Psychographic and demographic profile of China’s middle class consumers
Figure 52: Target groups, March 2014
Figure 53: Overview of four types of middle classes in China, March 2014
Affluents
Finance: Well-managed and highly knowledgeable about financial/investment products
Health: Health is the most concerning element to them
Leisure: Willing to spend more time and money
Opportunity
Stressed-outs
Finance: Invest in broad range of financial/investment products but still feeling pressured with their financial situation
Leisure: Moderate participation in leisure activities
Health: Juggling health and career
Opportunity
Chill-outs
Financial: Low financial pressure due to their accumulation of wealth and the lower cost of living
Leisure: Feel less need to splurge on leisure activities
Health: Low awareness of health products/services
Opportunity
Entrants
Financial: Lowest awareness on financial products
Leisure: Less time, money and energy to spare on themselves
Health: Put more priority on healthy diet than other premium health products/services
Opportunity
Figure 54: Attitudes towards lifestyles, by Target Groups, March 2014

Appendix – Property Ownership
Figure 55: Property ownership, March 2014
Figure 56: Most popular property ownership, by demographics, March 2014
Figure 57: Next most popular property ownership, by demographics, March 2014

Appendix – Car Ownership
Figure 58: Car ownership, by demographics, March 2014
Figure 59: Car ownership, by demographics, March 2014

Appendix – Current Financial Situation
Figure 60: Current financial situation, March 2014
Figure 61: Current financial situation, by demographics, March 2014

Appendix – Financial Products – Currently Own or Plan to Buy
Figure 62: Financial products: currently own or plan to buy, March 2014
Figure 63: Most popular financial products currently own or plan to buy – Currently own, by demographics, March 2014
Figure 64: Next most popular financial products currently own or plan to buy – Currently own, by demographics, March 2014
Figure 65: Most popular financial products currently own or plan to buy – Plan to buy in the next 12 months, by demographics, March 2014
Figure 66: Next most popular financial products currently own or plan to buy – Plan to buy in the next 12 months, by demographics, March 2014

Appendix – What the Middle Class Most Care About
Figure 67: What the middle class most care about, March 2014
Figure 68: Most popular – What the middle class most care about, by demographics, March 2014
Figure 69: Next most popular – What the middle class most care about, by demographics, March 2014

Appendix – Activities Done Now Compared to Last Year
Figure 70: Activities do now compared to last year, March 2014
Figure 71: Activities do now compared to last year – Eating healthy foods, by demographics, March 2014
Figure 72: Activities do now compared to last year – Using environmentally-friendly products, by demographics, March 2014
Figure 73: Activities do now compared to last year – Buying product that can help to protect me/my family against pollution, by demographics, March 2014
Figure 74: Activities do now compared to last year – Dining out, by demographics, March 2014
Figure 75: Activities do now compared to last year – Out-of-home entertainment activities, by demographics, March 2014
Figure 76: Activities do now compared to last year – Going on a holiday for 3 days or more 3, by demographics, March 2014
Figure 77: Activities do now compared to last year – Going on day trips with my family/friends, by demographics, March 2014
Figure 78: Activities do now compared to last year – Cutting down expenditure, by demographics, March 2014
Figure 79: Activities do now compared to last year – Taking out savings/investment products with high return, by demographics, March 2014
Figure 80: Activities do now compared to last year – Buying premium personal care/fashion products, by demographics, March 2014
Figure 81: Activities do now compared to last year – Using premium household care products, by demographics, March 2014
Figure 82: Activities do now compared to last year – Surfing the internet via portable digital gadgets, by demographics, March 2014
Figure 83: Activities do now compared to last year – Providing educational/learning activities for child(ren)^, by demographics, March 2014

Appendix – Things that Extra Money Spent on Currently Compared to Last Year
Figure 84: Things that extra money spent on, March 2014
Figure 85: Things that extra money spent on – Savings, by demographics, March 2014
Figure 86: Things that extra money spent on – Financial products/investment, by demographics, March 2014
Figure 87: Things that extra money spent on – Holidays, by demographics, March 2014
Figure 88: Things that extra money spent on – Education for myself or my kid(s), by demographics, March 2014
Figure 89: Things that extra money spent on – Housewares/household appliances, by demographics, March 2014
Figure 90: Things that extra money spent on – Electrical/digital devices, by demographics, March 2014
Figure 91: Things that extra money spent on – Buying a new car/upgrading the car, by demographics, March 2014
Figure 92: Things that extra money spent on – Going out for an expensive meal, by demographics, March 2014
Figure 93: Things that extra money spent on – Luxury products, by demographics, March 2014
Figure 94: Things that extra money spent on – Out-of-home entertainment activities, by demographics, March 2014
Figure 95: Things that extra money spent on – Beauty treatment/personal care, by demographics, March 2014
Figure 96: Things that extra money spent on – Exercise/sports, by demographics, March 2014
Figure 97: Things that extra money spent on – Health and wellbeing products, by demographics, March 2014
Figure 98: Things that extra money spent on – Gifting for others on special occasions, by demographics, March 2014

Appendix – Attitudes towards Lifestyles
Figure 99: Attitudes towards lifestyle, March 2014
Figure 100: Agreement with the statement ‘I think the changes in China’s economy will impact my life’, by demographics, March 2014
Figure 101: Agreement with the statement ‘I worry about my financial situation when thinking about the future’, by demographics, March 2014
Figure 102: Agreement with the statement ‘It’s worth spending on self-indulgence’, by demographics, March 2014
Figure 103: Agreement with the statement ‘It is difficult to cover my total spending without financial support from others’, by demographics, March 2014
Figure 104: Agreement with the statement ‘China’s current economy makes me feel under big financial pressure’, by demographics, March 2014
Figure 105: Agreement with the statement ‘I would prefer to cut back on other spending rather than spending less on leisure activities’, by demographics, March 2014
Figure 106: Agreement with the statement ‘Income is more important to me than how much leisure time I have’, by demographics, March 2014
Figure 107: Agreement with the statement ‘I would be interested in seeing more diversified entertainment facilities that can offer good experience’, by demographics, March 2014
Figure 108: Agreement with the statement ‘Regular health care treatments are important for keeping relaxed’, by demographics, March 2014
Figure 109: Agreement with the statement ‘It is our responsibility to use more products that can help to protect the environment’, by demographics, March 2014
Figure 110: Agreement with the statement ‘It is worth paying for premium healthcare product/services’, by demographics, March 2014
Figure 111: Agreement with the statement ‘It is worth paying a premium for food that can help improve my health despite its high price’, by demographics, March 2014
Figure 112: Agreement with the statement ‘It is more worthwhile to spend time on career development than on maintaining health’, by demographics, March 2014

Appendix – Further Analysis
Figure 113: Target groups, March 2014
Figure 114: Target groups, by demographics, March 2014
Figure 115: Property ownership, by target groups, March 2014
Figure 116: Car ownership, by target groups, March 2014
Figure 117: Current financial situation, by target groups, March 2014
Figure 118: Financial products: Currently own or plan to buy, by target groups, March 2014
Figure 119: What the middle class most care about, by target groups, March 2014
Figure 120: Activities do now compared to last year, by target groups, March 2014
Figure 121: Things that extra money spent on, by target groups, March 2014
Figure 122: Attitudes towards lifestyles, by target groups, March 2014

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