“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.” -
Lui Meng Chow, Research Analyst.
This report looks at the following areas:
- What opportunities can help the middle class to achieve a healthy
lifestyle?
- How can financial service companies retain the Affluents?
- How do leisure services companies target middle class consumers?
- How do premium products/services appeal to middle classes?
Building on Mintel's reports Consumer Lifestyles: China's Middle Class -
China, June 2012 and Marketing to the Middle Classes - China, June
2013 , this report offers an extension of in-depth analysis from different
angles on how marketers can target the evolving middle classes in terms of
their health, financial and leisure perspectives. Various perspectives in
terms of how middle classes perceive premium priced products and marketing
messages towards different typologies of middle classes are also covered.
These perspectives are crucial as China's growth model shifts from being
export to consumption-based, with the burgeoning middle classes holding the
key to sustainable economic growth over the long term.
Companies/brands/marketers are thus closely observing the emergence of the
middle classes, especially from the lower tier cities and the younger
generation also known as the second generation of the rich. Understanding
these middle class people's purchasing power and preferences could potentially
bring in more innovation in terms of products and marketing communications,
which in turn could potentially reshape future trends and the economy.
Table of Contents
1. Introduction
- Definition
- Methodology
- Limitations
- Abbreviations
2. 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?
3. Chinese Middle Class - The Background
- 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
4. 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
5. Trend Application
- Trend: Edutainment
- Trend: Help Me Help Myself
- Mintel futures: Generation Next
6. 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
7. 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)
8. 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
9. 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
10. 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
11. 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
12. 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
13. 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
14. 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
15. Understanding Different Types of Middle Class Consumers in China
- 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
16. 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
17. Appendix - Car Ownership
- Figure 58: Car ownership, by demographics, March 2014
- Figure 59: Car ownership, by demographics, March 2014
18. Appendix - Current Financial Situation
- Figure 60: Current financial situation, March 2014
- Figure 61: Current financial situation, by demographics, March 2014
19. 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
20. 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
21. 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
22. 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
23. 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
24. 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
