In the first quarter of 2006, the Chinese economy grew by 10.2%. With increasing growth in the Chinese market and steady and continued growth forecast for the future, it is wise for Western companies to research what the Chinese market wants and needs before diving into the Chinese market. These are the current trends in the Chinese market:
food
With such masses of people in China and a constantly growing population, it is no wonder that food and catering is one of the largest markets in China. From fancy restaurants to fast food, supermarkets and specialty food stores, almost every type of food is available in China. The biggest Western food names have already entered the Chinese market, including Walmart, Pizza Hut, KFC and, of course, McDonald’s. There is also a huge market for all kinds of food and even catering services.
Banking and financial services
Many foreign financial firms, including Merrill Lynch and The Royal Bank Of Scotland, have already bought stakes in Chinese banks. With the lifting of more restrictions on foreign financial companies in 2006, the banking industry should see even more foreign investment.
Luxury articles
High-end products, including foreign-branded watches, clothing, jewelry, electronics, and automobiles, are markets that continue to grow. The rise in the number of wealthy people in China continues to fuel demand for high-end and luxury items of all kinds.
Cell phone
With an estimated 440 million cell phone users in China, there is a huge market for cell phones, cell phone service, and cell phone accessories.
malls
Large shopping malls and malls are springing up across China, most offering a wide range of imported goods, particularly stores from the US and Europe, including Chanel, Papa Johns Pizza, Gucci, Burberry and Ralph Lauren. Retail sales in China have risen a staggering 50% in the past four years, with much of the credit going to the mall construction boom. Over the past six years, more than 400 shopping malls have been built in China, and that number will continue to rise. In Dongguan, you’ll find what is now the world’s largest shopping mall, the South China Mall. It has 6.5 million square feet of total floor space and space for 1,500 stores.
western brands
More than ever, the Chinese crave the most famous Western brands. From fast food restaurants to soft drinks, coffee, clothing, shoes and entertainment, many of the biggest Western names already have a large presence in China or are investigating how to get involved. Walmart, the largest US retailer, already has dozens of stores in China, including three Sam’s Clubs and Neighborhood Markets. Coca-Cola is already ubiquitous in China, and McDonald’s intends to have more than 1,000 stores open across the country by 2008.
Regardless of the industry you are in, you should be careful to do proper research before delving into the Chinese market.