Over the past decade, China has witnessed a remarkable increase in its household incomes, according to the 优蜜传媒Poll of China. Accompanying this overall income growth has been the emergence of an important and attractive segment of affluent households -- one that is likely to command as much attention from marketers in China as affluent consumers do elsewhere around the globe. (See "Chinese Far Wealthier Than a Decade Ago -- But Are They Happier?" and "Marketing to the Mass Affluent" in the "See Also" area on this page.)
In China, the relatively well-to-do are found mainly, although not entirely, in urban areas. These upscale consumers, with a minimum annual income of 30,000 RMB (approximately $3,600), represent the top 12% of China's households -- a percentage that has doubled in just five years.
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But despite their comparatively high incomes, affluent Chinese don't seem particularly satisfied with their jobs, their lives, or even their current incomes. In 1997, 24% of those making 30,000 RMB or more annually indicated that they were "very satisfied" with the way things were going in their lives. In 2004, that percentage had dropped by a third, to 16%. (See graphic "Are Affluent Chinese Satisfied?")
It seems that increased affluence has been accompanied by greater requirements and heightened expectations. While the "new affluents" may well have more resources and possessions, they are clearly not content with what they have.
More, more, more
Well-to-do Chinese don't seem all that happy with what they've achieved, even though they've managed to acquire many of the consumer goods that represent "the good life." The typical affluent household already possesses what the rest of China wants: color televisions, refrigerators, washing machines, and telephones. And they're also well on the way to owning what others in China only dream about: microwaves, air conditioners, stereos, and computers. (See graphic "Keeping up With the Zhangs.")
What's more, the rapid growth in ownership of some consumer products, such as mobile phones and microwaves, reflects affluents' ability to acquire what they truly want. Only automobile ownership remains a rarity -- no doubt because the price tag price still greatly exceeds the annual incomes of all but the "super affluent." There may be a microwave in every affluent kitchen and a mobile phone in every affluent briefcase. But even the well-to-do are still a long, long way from the two-car garage.
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And marketers, take note: Although the new affluents have already acquired a lot, they're still planning to buy more. Many are actively seeking to upgrade or add to what they already own. For example, even though ownership of a color television is already universal among the relatively well-to-do, one-third of Chinese affluents plan to buy another television within the next two years. An even larger number (42%) plan to buy a mobile phone in the next two years.
These numbers may reflect a desire to stay current with what's "hot" and fashionable, as well as a belief that new and attractive product enhancements will soon become available. Thus, there's little evidence of product or market saturation, and the upscale Chinese household remains a crucial target audience for marketers of all sorts of manufactured goods, both imported and domestic. (See "China's Global Opportunities -- and Domestic Challenges" in the "See Also" area on this page.)
Gallup's product purchase data indicate that Chinese affluents have been on a buying spree. And even though it hasn't enhanced their satisfaction with their standard of living, it still shows no sign of abating. In affluent Chinese households, the next decade may be marked by "keeping up with the Zhangs."
Results of this survey are based on a total of 3,597 hour-long, in-person, in-home interviews that were conducted across China -- 3,074 during June and July and an additional 523 in November 2004. Interviewing was conducted throughout the country -- that is, across each of China's 22 provinces, 3 municipalities, and 5 autonomous regions. For more information on this survey, see the "The 优蜜传媒Poll of China" in See Also.