Jessica Yang

Sr. Business Analyst

January 16, 2015

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Automobile popularity drives growth of suburban consumption activities in China

Easier access to remote places leads to changing shopping patterns

In China, the lifestyle of shopping and dining in suburban began more and more popular. Restaurants with fresh local ingredients as a selling point showed up along the highways. Foreign-invested companies such as Ito-Yokado and major retailers began to set up commercial facilities in urban areas. With the rapidly growing popularity of private cars, China’s “Highway Consumption” will catch up the standards as United States and Japan’s. Meanwhile, retail and service industry are expected to be highly developed.

Li Wei, a professor in Sichuan University, quoted a statistics saying that “In China, retailers began to develop and expand in a suburban area when GDP reach over 10,000 US dollars.” He also believes that China is in the early stages of the big-city development now. In next three to five years, there might be a large shopping center boom in the suburban.

In addition, major US retailer Wal-Mart are closing stores which are under performance in core cities, but proactively opening new stores in the suburbs or emerging small cities. In China, there has not appeared lots of food chain stores and menswear shops along the suburban roads which is opposite to in Japan. Yet, internet companies with keen vision have taken action on expanding the “Highway consumption.”

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With improved transport and development of suburbs, people are allowed to live in low density residential areas far from city centers. In China, the outward growth of cities like tier 2-3 cities are speed up. Compared to the living standards of developed cities, cost and pressure in urban areas are relatively lower. The prospect of these emerging cities are brightening. We can expect that major retailer will focus on expanding footprints to large suburban towns.

In fact, there are leading companies, both foreign-invested and local-invested, already opening stores in tier2, tier 3 cities. However, how to target the right cities to grow your business and where (which trade zone) to dig out next business opportunities in untapped cities? It’s crucial for retailers to find the potential customers and decide how many stores to open when entering a new market. Utilizing value-added demographic and business POI data to conduct an in-depth analysis of business trend, consumer behaviors, and micro-market study will help brand owners gain a thoughtful insight of market entry plan.

 

Ethan Li

Project Manager

December 26, 2014

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Power of spending in Asia

How spending patterns have changed the business landscape

According to the latest financial study, the high-growth market in Asia will lead global trade in the next decade, and its proportion of consumption in the whole world will raise from less than 14% in 2010 to 25% in 2020. Asia has gradually transformed its role from the world factory to the consumer market with high potential. Most international brands have already set foot in Asia markets by partnering with local distributors, holding exhibition events periodically, expanding their store network or show rooms to promote their brands.

Additionally, the M-type society trend in Asia also creates a segment of affluent consumers with enormous purchase power far greater than the others. “Who are these people? And how is their consuming pattern?” These are the million-dollar questions every business want to know.

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Another fact is that the age of target customers is elder than before. In East Asia, the average life length has increased from less than 45 years in 1950 to 72 years (China: over 71; India: 64) recently. Moreover, the population aging and retirement extension happening in most Asian countries also greatly impact the whole society, and indirectly change the business landscape in the market.

Traditionally, the stereotype of the elder life in Asian countries is that women stay at home taking care of grandchildren for younger generations, and men leisurely play chess and drink tea with friends in the same age. There is no way they are the active consumer segment in business market before. However, it turns out that the trend rolls to the opposite direction: these growing elder customers in Asia, especially the baby boom generation, would raise and become an important driver in the market. They have not only more financial freedom in terms of the retirement compensation, investments, savings etc, but also more free time to enjoy life by luxury spending than the younger generation with the burden to put food on the table now. Some still maintain the passion to willingly explore new experiences in new products and technology, and also live longer due to the good healthy system support nowadays, even active and valuable in job market.

Therefore, it is crucial that enterprises spend time studying more about where they are and their shopping behaviors, to innovate the business model, products, and services to go with the inevitable flow in Asia market right now.

Jason Lee

Market Researcher

September 18, 2014

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4 Athletic Apparel Trends In China Retail Now

Current apparel trends that retailers need to address now.

Increasing purchasing power and rapid lifestyle changes provided a big opportunity to major athletic apparel companies to expand in the market over the past few years. The 2008 Beijing Olympics gave international and domestic companies more reasons to be optimistic about the industry segment. Read the rest of this entry »

April Wu

China Market Strategy

June 11, 2014

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Banking News This Week – June 11

The top 5 banking news stories in emerging markets this week.

1 – Singapore overtakes London as top RMB offshore clearing centre

SWIFT data shows that Singapore’s RMB payments value increased by 375% between March 2013 and March 2014, making Singapore number one in terms of RMB world payments value, excluding China and Hong Kong. >>

Read the rest of this entry »

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