China's Rural Consumers Look to the Future

China's Rural Consumers Look to the Future

          
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China's Rural Consumers Look to the Future

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    In This Article
    • Roughly half of Chen Yi’s $250 monthly income is devoted to her children, in the form of tuition payments and pocket money.
    • Chen Heyin has a good understanding of nutrition, which is why she purchases premium milk and fortified biscuits for her children.
     

    Although China’s rural consumers are poorer on average than their urban counterparts, they can still represent an attractive market for some consumer-goods companies. Incomes of only a few hundred dollars a month may seem low, but rural consumers are already buying home electronics and appliances, and they are investing heavily in anything that will better their children’s future, from education to nutritional supplements.

    China’s rural consumers are far from a homogeneous group, and their spending habits and level of sophistication can vary considerably from place to place. To address the complexities of this market, in The Keys to the Kingdom: Unlocking China's Consumer Power, we present a flexible and field-tested methodology that helps companies expand their footprint according to their specific needs and competitive dynamics.

    Read about two typical rural consumers, similar in income but very different in attitudes and sophistication.

    Chen Yi, a 35-year-old mother of three, is a typical resident of Lianhua village, located in a southern county in Guangdong province. Although the county ranks in the top 10 percent of rural incomes, it is relatively remote, with the nearest city about two hours away. This remoteness limits Chen Yi’s exposure to large retail stores and even to major news reports—for example, she had never heard of the melamine milk scandal. Her unfamiliarity with brands means that in most product categories, Chen Yi does not have a favorite. Roughly half of her $250 monthly income is devoted to improving her children’s lives, in the form of tuition payments and pocket money.

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    Chen Heyin is a 23-year-old mother of two in rural Jiangxi province. When she was younger, she worked in a garment factory in neighboring Fujian province and was exposed to a wide variety of consumer brands and products. Compared with Chen Yi, she is much more informed about brands, such as Minute Maid, Wahaha, Uni-President, Danone, Mengniu, and Yili. She also has a fairly sophisticated understanding of nutrition, which is why she purchases premium milk as well as calcium tablets and fortified biscuits for her children.

    Chen Heyin’s home is a new three-story house that was just completed last year. Although her only major purchases to date have been a cathode-ray-tube TV, a DVD player, and a refrigerator that is used only during the summer, she plans to buy a washing machine soon, and she is saving money to upgrade the furniture in her home.

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