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If I could just get each one of China's 1.2 billion people to buy one bar of Lux soap, .....
WRONG! Let's get real! China's market potential is amazing but a successful marketing plan in China will look beyond those numbers and find some startling statistics.
The largest 36 cities- 6.8% of the total population - accounts for 39% of the total income earned in China!
The largest 10 cities - just 4% of the population - accounts for 22.4%!
Given the challenges involved in distributing your product throughout China, doesn't it make more sense to roll out where the income is?
Still, the actual incomes of most Chinese are still amazingly low.
Per capita average income in major cities was only RMB 5,059 or US$610. (US$8.3 = 1 RMB)
Urban per capita average income (1995) was only 3,855 RMB or US$464.
Rural per capita average income (1995) was only 1,550 RMB or US$187.
Taking a closer look at the population:
- Population growth is about 1% per annum, that's 2 Hong Kongs extra per year
- However, China's elderly population (over 60) is growing at 3.32% per annum and will climb to 374 million people by 2040, a full 24.48% of China's estimated population.
- Urban areas account for 29% of the population while rural is 71%. An average 550,000 people live in China's 622 official cities.
- Urban China encompasses 107.5 million households, averaging 3.28 persons each, (more households than either the USA or Europe)
- The population of the largest 10 cities, approximately 13% of the total urban population, is about 45.5 million!
This concentration of population and wealth in large urban areas offers major opportunities for successful and efficient product launches.
The Economy
- Latest economic statistics reveal that China has achieved a 'soft landing' in its economy.
- GDP should finish '96 at just under 10% and inflation should come down to about 9% from it's 1994 high of 24.2% (as measured by CPI)
- Nationally, retail sales of consumer goods are growing at a brisk rate of over 13% but some places like Shanghai are growing at over 21%
All indications are that 1997 will continue to show a trend of rapid GDP growth, increases in per capita income, and declining inflation. Overall, a highly favorable economic environment for a wide variety of consumer goods.
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