By 2020, Chinese consumers will join the ranks of the worldâ€™s choosiest and most sophisticated consumers. In the March 2012 report “Meet the 2020 Chinese Consumer” Yuval Atsmon, Max Magni, Lihua Li and Wenkan Liao of McKinsey China contemplate the profile of the Chinese consumer in 2020.
“Most large, consumer-facing companies have long realized that they will need Chinaâ€™s growth to power their own in the next decade. But to keep pace, they will also need to understand the economic, societal, and demographic changes that are shaping consumersâ€™ profiles and the way they spend. This is no easy task, not only because of the fast pace of growth and subsequent changes being wrought on the Chinese way of life, but also because there are vast economic and demographic differences across China. These are set to become more marked, with significant implications for companies that fail to grasp them. In the next decade, we believe yawning gaps could open up between companies that have similar sales turnover today but display different levels of focus on the best growth opportunities for the future.
Since 2005, McKinsey has conducted annual consumer surveys in China, interviewing in total more than 60,000 people in over 60 cities. The surveys have tracked the growth of incomes, shifting spending patterns, rising expectations sometimes in line with the respondentsâ€™ western counterparts and sometimes notâ€”and the development of many different consumer segments. Those surveys now provide insights to help us focus on the future. We cannot, of course, predict it with certainty. And external shocks might confound any forecast. But our understanding of consumer trends to date, coupled with our analysis of the economic and demographic factors that will further shape these trends in the next decade, serve as a useful lens through which to contemplate 2020. We do not claim to paint a complete picture of the 2020 consumer. Rather, this report points to those traits likely to influence the way companies ride the next wave of growth in Chinaâ€™s consumer market.