china - Consumer Lifestyles in China 10 Nov 2008 CONSUMER...

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Consumer Lifestyles in China 10 Nov 2008 CONSUMER TRENDS China’s grey population China has undergone tumultuous changes in the last few decades, many of which have come together to completely transform China’s age demographics and family composition. Increasing life expectancies and much-improved health conditions have led to rapidly increasing numbers of older people in China, who numbered a staggering 170 million in 2007 and are projected to reach over 230 million by 2015. This, combined with the effects of the ‘one child’ policy, which has dramatically decreased the size of Chinese families over the three generations affected by this policy, has driven a trend in China which is having an enormous impact on consumer behaviour today, and promises even greater effects over the forecast period. The traditional Chinese family is largely becoming a relic of the past. Looking after elderly parents and grandparents is increasingly problematic and financially unviable. Caring for older family members is important to the Chinese and there are cultural as well as social reasons for this (the lack of a comprehensive pension system being one). But due to the ‘one child’ policy, the demographic model today closely resembles an inverted pyramid. Two married adults need to look after four parents, up to eight grandparents and maybe even some members of their great-grandparents’ generation. With young Chinese increasingly following a trend of flying the family nest to set up homes of their own, proximity also becomes an issue and hands-on elder care is largely neglected. The effects of this altered demographic in part answers the much-discussed question of why the Chinese save so much. Incomes are on the rise in China but a corresponding level of consumption has so far been absent across China’s markets. The strains of providing for an ageing population are felt across all age groups, be it provision for one’s own retirement, parents’, grandparents’, or all of the above. These repercussions are felt across all consumer markets and are even going some way in informing life decisions such as marriage and family planning. The rising age of marriage can be attributed to the more career-driven mindset of the men and women of China but this ignores the very real financial burdens associated with settling down, not least of which is the rearing of a child. In China, which is not a religious country, marriage is essentially seen as the first step in the building of one’s own family and little more. Chinese consumers today are very aware of the future costs they will incur in their own retirement as well as in that of their older family members, and against this backdrop it is unsurprising that the Chinese save rather than increase consumption. Better social security and healthcare provisions are essential in order to tackle the huge savings ratio and stimulate domestic consumption in China. Government investment in the healthcare system is being bolstered by Beijing’s recent openness in allowing foreign
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This note was uploaded on 10/15/2009 for the course MKT 450 at USC.

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china - Consumer Lifestyles in China 10 Nov 2008 CONSUMER...

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