100 million new consumers?
There’s still a lot of future growth in demand to come in China’s seafood market. China’s urbanization plans – a favorite government tool for driving economic growth – suggest 100 million currently rural Chinese will be living in cities by 2020, creating all kinds of demand for goods and foodstuffs. Urbanization has led to a big boost in spending on packaged and convenience foodstuffs. But Chinese savings rates are very high by Western standards –something related to the relative absence of government-funded services like medical care and education.
Crucially, average household incomes in China are higher relative to other developing countries, and these incomes may be even higher given the extent of unreported income in China and drive steadily rising consumption. Even with slower overall GDP growth, China’s consumer economy is expanding exponentially. Whereas consumption in developed countries has stalled in recent years, consumption is rising 14 percent a year among those under the age of 35, according to a McKinsey study. The survey also found that 55 percent of consumers in China are confident that their incomes will rise significantly over the next five years. Most forecasts agree on GDP growth of six percent and above until at least 2020, creating future demand for discretionary categories of goods like transport and recreational dining. This is a big opportunity for foreign brands which still have the edge in a market characterised by thousands of small, poorly trusted local firms.
