As China becomes an increasingly important part of the global economy, no investor or business leader can ignore the increasing influence of its consumers. The tastes and preferences of China’s market of 1.3 billion people has the potential to sway demand and shift the trajectory of global consumer spending.
This is especially true as China’s consumer spending is growing at an average annual rate of 18 percent, according to the National Bureau of Statistics, compared to 2.2 percent gain for the U.S.
As many foreign companies have demonstrated, cracking China's consumer market is easier said than done—and there have been some notable stumbles. U.S. home-improvement giant Home Depot shut down five of its 10 stores since entering the market in 2006, while Best Buy, the world's largest consumer electronics retailer, closed all of its branded stores in China this year. Retail giant Wal-Mart Stores was only able to turn a profit in the country in 2008, 12 years after first entering China.
There have also been some notable successes, such as U.S.-based Yum! Brands, which has become the largest Western restaurant brand in China. Yum! currently has a 40 percent share of China’s fast-food chain market, compared with 16 percent for McDonald's, according research firm Euromonitor.
Some consumer trends in China are well known, such as the increasing demand for luxury goods, but others may surprise you. CNBC.com put together a list of 10 major consumer trends, including the companies and sectors they have the potential to profit from them. The list is based on studies and reports from international organizations such as the United Nations, the U.S. Department of Agriculture, and research firms including Euromonitor International and McKinsey & Co.
Which trends are changing the course of China's consumer economy? Click ahead to find out!
By Rajeshni Naidu-Ghelani
Posted: 28 July 2011