Fast-Growing Middle Class, More Willingness To Drop Small Fortunes On Shopping Sprees Marks Shift In Chinese Consumer Behavior
The rise of the Chinese consumer class is not new, but an interesting development we’re seeing become far more ubiquitous is more cultural acceptance of the conspicuous consumer in China. Though conspicuous consumption too is not new, up until recently many wealthier individuals still held back on public displays of wealth. Now, according to a new article on Slate, the rise of the Chinese consumer — educated, willing to spend whatever it takes, and relatively young — could have major implications for the global economy and for the future of Chinese culture itself.
Shanghai, where I landed on the same day as President Barack Obama, is no more representative of China than New York is of the United States. But this supercharged financial center offers a glimpse of China’s consumer-oriented future. When Stephen Green, chief economist at Standard Chartered Bank, first came to Shanghai in 2000, the foreigners were rich. “Now the Shanghainese are rich, and the foreigners are poor by comparison,” he says. The biggest change over the last several years: “More Porsches.”
Shanghai’s economy grew at a 12 percent clip between 1993 and 2008. And in the wake of the global financial meltdown, while exports fell, the economy continued to expand—largely because of local demand. Xinitiandi Street, home to the building where the first Communist Party Congress was held, has evolved into a place where the bourgeoisie come to spend their money. There are jewelry shops, a Starbucks, and, around the corner, a Rolls-Royce dealership.
Companies that initially came to China to manufacture products for export are now focusing their attention on the rising domestic market as a large middle class takes shape. A sizable portion of the world’s toys are made in China, but Toys “R” Us now has 15 stores—small ones, not big boxes—in the country, too. Best Buy, which has been importing electronics from the region for years, is deploying its Geek Squads to several stores in Shanghai. They came for the cheap labor, but they’re staying for the spending power.