McKinsey partner Yougang Chen explains how rising middle-class wealth and a new generation of sophisticated young consumers are changing the rules for China’s consumer market and the companies that serve it.
The image of China as a place to sell only low-cost, unsophisticated mass-market products is changing as dramatically as its demographics. Lifted by a wave of growing middle-class wealth, the country’s economy is undergoing significant shifts in consumption dynamics as a new generation of young, prosperous, and individualistic shoppers moves to the fore. Our latest research suggests that within the burgeoning middle class, the upper middle class is poised to become the principal engine of consumer spending over the next decade.
As that happens, a new, more globally minded generation, born after the mid-1980s, will exercise disproportionate influence in the market. In this video, Yougang Chen, a principal in McKinsey’s Greater China office, explores the rise of these Generation-2 (G2) consumers, their buying preferences, and the impact on Chinese and multinational companies as niche product categories and luxury goods become the hallmarks of China’s consumer evolution.