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Unlocking China’s Consumer Power

April 05, 2010 by Hubert Hsu and Jeff Walters
April 05, 2010

In 2005, a consumer company doing business in 70 locations (cities and counties) in China could reach 70 percent of consumers in the middle and affluent classes. To achieve the same coverage today, a company must be in nearly 240 locations. By 2020, that number will exceed 400.

A dramatic shift in the geographic distribution of consumer spending power is under way in China. The middle classes are expanding out beyond the largest cities more rapidly and in greater numbers than any market has ever witnessed.

Such a dynamic environment has implications for companies at all levels and positions. Companies currently enjoying growth need to ensure that their economic model is sustainable. Laggards can capitalize on market dynamics and catch up to the leaders by winning in newly important locations.

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