China’s growing upper middle class to drive consumption by 2020, research finds
Households with between US$24,000 and US$46,000 in disposable income to account for most of incremental growth in five years time, report by BCG and AliResearch says
The dramatic rise of China’s upper middle class and affluent families is expected to become a major driver for domestic consumption, which will grow fast despite the nation’s sluggish economy.
A report released by consulting firm BCG and AliResearch, the research arm of China’s largest e-commerce company Alibaba Group, said the combined number of upper-middle class households, whose annual disposable income ranges from US$24,000 to US$46,000, and affluent households, with disposable income over US$46,000, would double to 100 million by 2020.
Read More - How online shopping is revolutionising China’s e-conomy ... and even its villages
By then, they will account for 30 per cent of urban households, up from 17 per cent today and only 7 per cent five years ago.
“During the past few decades, China’s consumer economy has been powered by the ascent of hundreds of millions of people from poverty to an emerging middle class,” said Kuo Youchi, a principal with BCG Greater China who helped draft the report.
“But China is entering a new era. The real driver for the future will be upper-middle class and affluent shoppers.”
The report projects that affluent and upper-middle class consumers will account for 55 per cent of China’s urban consumption and 81 per cent of its incremental growth by 2020.
