Summary of the Article, “chinese Consumers: Doing It Their Way”

China’s once-drab and Mao-suited interior is not so far behind. It is surprisingly that China’s cosmopolitans now know at any given moment what movies are playing in New York and what fashions are on the Paris runways. The passion for fashion is astonishing.

There has been a movement towards fashion and high-tech. For example a migrant worker, earning less than 830$ a month is willing to spend a month’s wages on a new Apple iPhone.

As a matter of fact, China is very likely to become the next consumption superpower. It has already overtaken Japan, which makes China the second biggest consumer economy in the world. The massive push towards urbanizing the countryside, which should produce tens of millions of richer citizens seeking retail therapy has made it possible that China contributed more then any other country to he growth in global consumption between 2011 and 2013.

8% of he world’s total consumption is coming from China. This is caused by the government’s actions to boost people into spending more money on consumption. China’s leaders try to raise government spending on health care and pensions to make the people save less and help the Chinese economy grow. Although this makes household debt growing very fast, China still has relatively little compared to countries like USA and Germany.

China’s become one of he worlds most sophisticated consumer markets, heavily skewed towards expensive goods. Even people without big incomes are becoming big shoppers. With some 29% of purchases last year, Chinese are the biggest buyers of expensive items. Therefore it is no surprise that half the world’s new shopping malls were set up in Chinas cities and rural areas. This lead to an explosion in Chinese luxury sales; Increasingly aspirational and conspicuous consumers formed newly middle-class types who are keen to try out new products, but try to evolve as fast as possible from low-end to high-end products. The affluent consumers are, in contrary to Westeners, keen to know the history and cultural background of foreign brands. Therefore big brands like Coach, Prada and Bottega Veneta continued to expand, and so did Apple. Not only that there are more IPhones sold in China then in the USA but also there are more Apple stores in Shanghai then in San Francisco shows clearly the importance of China as a consumer. The goal of the companies is to capture both the upwardly mobile and the „post-luxury“ elites in the cities, who want less flashy brands, by offering them affordable luxury.

However, that’s not it. With Chinese people always being online, the world’s largest e-commerce market is located in China.

Because buying online saves time and money, Chinese are furious about online shopping. That made a lot of western companies like Amazon start to offer direct delivery to China for certain products. But also local e-commerce giants like Alibaba try to catch the wave by providing cross-border services.

The online awareness and because of Chinese customers being online from the start the impact on the global market is huge. Every thing can be posted online and the Chinese population writes and acts on online reviews far more then Westeners. Recommendations are posted nearly every day on social-media sides with the effect, that the likes and dislikes on those platforms can make or break products.

This shows that the Chinese market is driven by the young urban customers who are demanding something new and have no taboos and according to Andrew Keith, the president of Lane Crawford, „we are not teaching them, they are teaching us“.

Moreover, Chinese people are not only consuming on the mainland, but being the world’s biggest shoppers abroad, caused by the arrival of cheap air travel which is making the Chinese more discerning shoppers. Until the year 2020 the number of outbound Chinese tourists will double and their spending will even triple over that period, according to a report by CLSA. Traveling to Hong Kong and Jeju Island in South Korea is becoming more and more popular, even to the ordinary folk because they can visit without visa and shop tax free.

The reasons for shopping abroad are different. On one side, there is the big price gap between the mainland and foreign countries. Furthermore Chinese costumers try to avoid the counterfeit goods so common on the mainland. On the other hand, stated the most important point, is the variety and freshness of the products available overseas. The Chinese population is keen to try out new products, especially the ones they have seen on foreign television shows. This leads to Chinese citizens spending some two-third on luxury goods outside the mainland; a fifth of it in Europe.

However, the Western invaders must not only cater the world’s most demanding shoppers, but also start to deal with the increasing homegrown competition. Chinese brands are aspiring to become global brands and are catching up with their foreign rivals. They way into the global market was paved by the Korean brands and lead to a global acceptance of Chinese brands. China is not only seen as the biggest consumer, but also as the biggest producer of smartphones making the forecast that China will become the biggest „mobile-commerce“, too.

That way, Huawei, a telecoms-equipment giant, is making a big push into branded consumer electronics. Furthermore, Xiaomi, a startup smartphone manufacturer, has developed a hugely popular phone-and-app system, inspired and shaped by western brands like Amazon as well as Apple, bringing the world China’s first global innovation powerhouse.

But leading all the way is Lenovo, an electronics firm who just bought the western