The speed of change in China can be breathtaking. Consumer goods companies trying to keep pace can easily lose sight of the big picture as they focus on operational necessities. But failing to understand the ever-changing dynamics of this market can all too quickly result in being left behind, and the price to get back at the front of the race may be crippingly high.

McKinsey's China Consumer Center has interviewed about 5,000 to 6,000 consumers annually since 2005, providing the broadest and deepest overview of consumer attitudes and behavior in China. Our sample is representative of 90 percent of China's GDP, 80 percent of its disposable income, and 60 percent of its population, with in-depth views across city tiers, income groups, ages, and regions.

This report delves into four critical areas that consumer-facing companies need to understand in order to fully appreciate fundamental shifts in evolution of China's consumer landscape: the rising importance of regional differences, the growth of the premium market, the new look of winning brands, and new ways to connect with consumers.