Largest Consumer Market in the World

One of the things that amaze me most about China is the strength of consumer demand. Economic difficulties fail to derail the will of Chinese consumers, they simply keep spending as they bum rush glitzy shopping malls. As for the shopping malls, they keep springing up all over China. I am not one for shopping, but I do enjoy poking around these places when I am there. They are multi-storied, have all matter of goods and services available (my favorite aspect is the plethora of food stands and restaurants), are teeming with Chinese and expats alike, and some even have full size movie theaters on the top floor (in which you can watch the latest Hollywood blockbuster no less).

To show the sheer magnitude of this consumer market, ingest these facts: China Mobile, which is state-owned and one of two major providers in China, has just seen their customer base cross the half billion mark. As a result, it is easy to comprehend that China Mobile has the world's largest mobile network and the most subscribers. China has also recently become the world's largest automobile market as well.

I must admit, this news does not really surprise me all that much. However, what does surprise me is during China's trouble economic period (let us not forget that China's exports are down at the moment) this rampant consumerism has not only sustained but is increasing. This is good news for China as it tries to diversify and boost domestic demand, a key element of Beijing's economic strategy.

Despite all the positive indicators, many economists and skeptics are not buying the surge. Beside the concern about the sustainability of such a robust consumer push, they are also concerned about the data itself. Many contest that the figures in play also account for government expenses and purchases. Like the United States, China is also employing a stimulus program of sorts.

While these factions can go back in forth all they want, I believe that while the growth may not be as high as Beijing purports, it is still nonetheless growth! All over China in various slices of life, things have been happening rapidly. More rural and provincial Chinese are getting into the mix, albeit some of this is on account of incentives in place by the Chinese government (much like the United States "Cash for Clunkers" program), still, this information is still telling. In Chinese urban society, incomes are rising and so is the pollution from new automobiles clogging the roads and highways.

I've mentioned before in earlier posts the vitality of China's consumer market. There is of course an element of risk. There could be a drop off in spending or the bubble may burst. I am no economist, but if I had a thriving business and a marketable product, I would bet all the chopsticks in China that this will happen later rather than sooner and that profits could be made. The key is to understand the nature of the Chinese and find that next untapped market.