The Chinese Consumer Culture Phenomena

Consumption Behavior in China since the Regime of Mao China has one of the most attractive markets in the world. A report by Weightman (78) shows that many investors have considered venturing into this country because of a number of reasons. The first reason why this market is extremely attractive is the population. China is home to about 1.3 billion people, making it the most populous country in the world.Advertising We will write a custom essay sample on The Chinese Consumer Culture Phenomena specifically for you for only $16.05 $11/page Learn More Brandt (8) says that this population forms a massive market that can be targeted with different products. The economy of this country has also contributed to making it an attractive market. China has the second largest economy in the world, after the United States based on purchasing power. The country’s leadership has made a concerted effort to improve the infrastructure. It has some of the best mean s of transport and communication systems in the world. Consumer culture in this country has attracted attention of many scholars. Schoppa (87) defines consumer culture as the relationship that exists between an individual and material good. According to Gerth (93), consumer culture is a social set up where buying and selling of products not only defines daily life activities, but also considered part of the social organization. Consumer culture can also be defined based on its two main constituents, which include consumerism and materialism. Consumer culture in China can be traced back to the Han Dynasty, which approximately 206 BC to 220 AD. As early as this time, the Chinese had developed strong cultural values that dictated most of their activities. Trade was one of the main activities practiced in this dynasty and trade was heavily affected by various cultural practices. Ming Dynasty of 1368 had profound effects on consumer behavior, some of which are felt even today. During thi s time, Chinese people became exceedingly prominent in artistry. Most of the products that were presented to the market were beautiful pieces of art. The love of arts became one of the defining cultures of this society. As Vogel (112) says, Chinese still admire beautiful flower items because it defines their past. As such, consumer culture had started developing in those earlier days. Mao Regime made an impact on consumer culture of people of this nation. According to Gerth, the consumer culture in China was being used to promote nationalism during the Mao regime and post Mao regimes (4). At this time, the main aim of this initiative was to link consumption and nationalism by introducing the issue of national products and brands. Consumption of national products was highly encouraged. The government’s attempts to establish a link between nationalism and consumer culture was evident. It supplied Chinese products, including fashion products and food additives in its museums and departmental stores and encouraged local advertising. This movement tremendously influenced all aspects of China’s burgeoning consumer behavior and culture.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More It was at this time that the ambitious desire of China to create its own national brand in nearly every product emerged. It surfaced from this time that the consumer behavior was more of a nationalized one, in which the government heavily influenced consumer behavior in the market. With the advent of globalization and liberalization, the trend shifted from a nationalized consumer culture where the government economic activities of people to an economy where consumerism was permitted (Li 84). Li says that, â€Å"Unlike the nationalized consumer culture, consumerism allows consumers to make a free choice on what they would like to purchase.† (4). In addition, it allows them to embrace thousands of new services, brands, and products with ease. China remains one of the most attractive markets in the world. The middle class makes an attractive market segment that has not only attracted the Chinese investors, but also other investors from overseas nations. This has seen various firms across the world make an entry into this market. The Chinese Consumer Culture Phenomena China is one of the fastest developing economies in the world. The runaway developments taking place in China has seen the income for most people soar especially in the coastal provinces of China. According to Croll, these coastal provinces form the heartland for the growing Chinese middle class, which presently numbers about 100 million (31). Despite the fact that this economic boom has exacerbated regional disparities, new consumer classes (categories of consumers based on their income) have arisen. The classes of consumers in China are blue-collar factory workers; the pink-collar flight at tendants, secretaries, and other service workers; White-collar office workers; and the gold-collar executives working in the multi-national corporations across China. The reform era had a massive impact on individual Chinese, and on the country at large. As the country became liberalized, there was an emergent of an era of entrepreneurs. Private entrepreneurs were motivated to come up with various business ideas. The government had allowed private investors to come up with business opportunities. At whichever levels, their capacities would allow them. China was getting liberated economically. There was the emergence of Ge-ti-hu (individual private entrepreneurs) who came with brilliant business ideas within the country Clark (67). They established restaurants, departmental stores, beauty salons among others. This led to the rise in consumer culture.Advertising We will write a custom essay sample on The Chinese Consumer Culture Phenomena specifically for you for only $ 16.05 $11/page Learn More Chinese now purchase various products from many of firms that came into existence. The local economy also became stronger. The emergence of Chinese Ge-ti-hu meant that the purchasing power of them improved. They can afford to buy consumer goods such as television, music system, and cars Schoppa (21). According to Brandt and Rawski, globalization and the increased abundance of money has led to the emergence of another category of middle class consumers known as the monetary elite (35). The emergent monetary elite are classified under Dan shenguizu, Bo puzu, Yueguang zu, and You pi. Weightman defines the Dan shen zu as referring to the â€Å"single aristocrats† most of whom are women over the age of thirty or are working as bankers or managers for foreign firms (312). These women often purchase high-end clothing and use many cosmetics like Shisido and Lancome. This category of middle class citizens can afford to take beach vacations on t heir own with their friends. Bo pu zu refers to well-off intellectuals who indulge in studies and books. Yue guang zu is the category of middle-class earners who spend their money as fast as possible. This category is often considered as the â€Å"tapped-out class† (Weightman 312). You pi or yuppies, also known as the xiao zi or the â€Å"little capitalists† workers, are the category of middle class citizens who own apartments and cars and spend their off-hours in cafes. Apart from this classification, the Chinese consumers can also be categorized as pragmatic, commercialized, social, and conservative (Brandt and Rawski 38). The pragmatic consumer seeks practical aspects of the consumer goods he purchases and ignores its commercial information. This consumer category forms 50.8% of all consumers in China. This consumer category is only interested in the functional attribute of the products they purchase. Pragmatic-type consumers are thrifty and adhere to Chinese tradit ional values. Pragmatic-type consumers were common during the periods preceding Deng Xiaoping’s economic revolution. Vogel states, â€Å"This period saw consumer culture used to promote nationalism and patriotism,† (39). National products and brands were introduced during this era, and their consumption was viewed as a sign of patriotism. Shoppers who stocked and sold locally manufactured products were given preferential treatment by the government. Shoppers and consumers who consumed foreign products were considered unpatriotic since they were going against the maxim that stated that Chinese ought to consume goods made in China (Gerth 4).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More In order to encourage patriotism in the consumer culture the government supplied Chinese products ranging from fashion, food additives, and electronics among others in its departmental stores and museums. Additionally goods were clearly branded as ‘foreign’ or ‘Chinese’ with the consumption of the former being highly discouraged (Gerth 4). In essence, the government heavily influenced consumer behavior in the market. Although the government does not give direct support for the local products, the incentives given to the local firms leaves no doubt to the fact the government prefers the local brands. The incentives allow the firms to charge lesser prices in the local market. The price charged by the local firms is more attractive as compared to that of foreign firms. The middle class consumers are sensitive of the price charged on the products they purchase. Any slight difference in price of the product they purchase would always affect their decision. As su ch, the government has swayed the decision of the consumers towards the purchase of local products. The other category of middle class consumer is the commercialized type consumer. The commercialized consumer-type emerged at the onset of liberation and globalization when consumerism began to be embraced as nationalized consumption began to lose meaning. This consumer type pursues brand name products and is more concerned with the product’s commercial information. They have awareness of the availability of different brands of products. They would demand a brand they have been using. The commercialized-type consumers became extremely common in China after the period of reforms. Li asserts that this category is bound to increase in line with the economic developments taking place in China (â€Å"CHINA IN 2000† 45.) This consumer category comprises the white-collar workers, the young, and the educated. The sociable consumer gets information about products mostly from frien ds and relatives. They like information sharing amongst themselves as a way of enhancing their understanding towards products. The conservative consumer, on the other hand, resents commercial information and dislikes social changes. This group of consumers presents radical changes, most of which are brought about by the emerging technologies. They take time to adjust to changes and, therefore, prefer changes that happen gradually. This category of consumers mostly comprises the older portion of the population who find it challenging to manage radical changes brought about by emerging technologies (Wang 83). The current trend in consumer behavior has seen consumers moving towards becoming commercialized consumers. Initially, the aspect of seeking for commercial information and loyalty to brands were not the norm in the Chinese consumer market given that the government heavily influenced consumer behavior in the market. In the contemporary China, consumers can make a choice on what pr oduct to buy. They have the freedom to choose from a variety of products in the market (Ling 90). Li perceives that the modern day Chinese consumer has embraced consumerism, which has been encouraged by the Deng economic reforms and the onset of globalization (â€Å"CHINA IN 2000† 84.) Consumerism enables the Chinese to make a free choice on what he would consume from a plethora of choices. Consumerism in addition, it allows consumers to embrace a variety of new services, products, and brands with ease. Consumerism has its origin in the west where majority of the consumers tend to consume more than what they possess, with the hope of paying the debt incurred at a future date. Although the Chinese do not spend as much as consumers in the west do, their expenditure is sustainable enough, making it an attractive market (Mars and Adrian, 39). Gerth argues that average Chinese saves nearly 30% of their household income (54). This rate in the western nations and the United States w ould be considered shocking and absurd since they save an average of one to two percent of their incomes (Lu 82). Wu claims that this saving and parsimonious culture developed because of China’s unstable economic and political history, which exposed Chinese to extreme levels of poverty (84). In this regard, Chinese are not spent thrifts because they want to save much and shield themselves from poverty and medical problems especially after their retirement. This saving culture is further motivated by the poor health policies that comprise the health care coverage system and the pension scheme. Chinese Middle Class Li observes that the concept of middle class began to be used in China in the late 1980s after the implementation of the reform and opening up policy (â€Å"CHINA IN 2000† 34.) The middle class category in China has been referred to as the category of citizens who have their own capital to invest. In Li’s view, the middle class refers to a group of peop le who productively contribute to the making of new lifestyles and commercial mores (â€Å"CHINA IN 2000† 104.) The concept and idea of middle class originated from the West where it referred to bourgeoisie or a social stratum that does not have a clear definition, but if found in between the upper and lower classes. Consumerism has transformed China. They have moved from the concept of only buying Chinese products, to a liberalized approach of buying brands, irrespective of the country of origin. This transformation has had a positive impact on the Chinese middle class. This class happens to have the largest number of consumers. Chinese middle class has received different definition from different scholars based on the approach they use to define this term. However, all these definitions seem to agree on the fact that the class involves individuals who are not extremely rich, but have enough money to purchase most of the items they need in their lives (Chevalier and Pierre, 98). The Chinese middle class definition is rather vague as different people categorize themselves in this group using different criteria. Li observes that the middle class are the drivers of the economy. This is because of their purchasing power and their number (104). He further notes that it is more appropriate if they were referred to as the middle-income group, given the fact that their population drives the economy (104). The middle class concept was derived from the West, and a significant number of the citizens in this class do not believe that they belong there (Tsang 56). The middle class generally love leisure. They like going on tours, spending some time in recreational activities or simply watching movies. According to the Chinese National Bureau of Statistics, the urban middle class should have an annual income of between sixty thousand and five hundred thousand Yuan (which is about $9600- $80,000) (Gerth 148). Apparently, there are several types of middle classes, and they differ from province to province depending on income and other factors. For example, earning sixty thousand Yuan in the western province of Qinghai can qualify a person to be in the middle class category while in Beijing 60 000 Yuan is a basic and cannot automatically qualify a person to this category. The middle class feels intensely insecure economically. In addition, the middle class is fragile given that the social security system in place is suboptimal, this could be the reason why a majority of the people refuse to be identified with this category (Cheng and Kara 118). The middle class in China cannot be compared to the middle class populations in the United States. This is because of the high population and limited arable land that consequently make them live under low economic standard levels. Croll gives one of the best definitions of the middle class by describing them as a set of ordinary people, which makes the largest percentage between the poor and the rich (101) . Croll further suggests that they should have a monthly income of at least five thousand Yuan and has received a university education (101). The middle class can also be considered as a state of mind, where economic status and knowledge dictate the attitude and values of people within a given society. Croll states, â€Å"This group has grown massively as from the Mao era,† (101). This category did not exist before, given that the Mao era was aimed at creating a united China with no social or economic class. In this united China, the government provided everything to its citizens. Currently, the middle class category comprises sixty four million Chinese citizens. This figure is expected to hit the six hundred million mark by 2020. It is clear that the middle class in Chinese society do not believe that they belong to this class. This is because they feel there are some forces that dictate their actions other than themselves. This social stratum consists of professional people , businesspersons, teachers, and nurses, among other professionals. The middle class is marked by bourgeois values. One of the most distinct aspects of the middle class is its state of mind where acquaintance and fiscal repute characterizes its values and approach to life. This middle class is growing at an accelerated pace, despite the fact that a growing number of researchers are raising questions about who make up China’s middle class. Moreover, questions are being asked on what its disposable income truly means. In this respect, a comprehensible and perfect meaning of China’s middle class has not been easy to obtain. In particularly, it is hard to define the middle class at this moment when its economy has become full-fledged and ranks the second in the globe (Wang 91). The clear definition of a working class is further hampered by the fact that the World Bank still classifies ten percent of China’s population as poverty-stricken. Clark argues this informati on is in harmony with China’s Ministry of Commerce’s report produced in the year 2010, which came clean that slightly over 150 million Chinese citizens subsist under the universal poverty line of one dollar in a day (78). It is apparent that scholars have differed regarding the definition of the middle class. In fact, highly regarded scholars have extremely differed as regards the number of people who fall under the Chinese middle class, their capacity, as well as their buying power and the ramifications associated with it. For example, China’s State Statistics Bureau stated that the middle class revenue standard ranges from 60,000 to 500,000 Yuan in 2005 (Wagner 1). Wagner (1) says, â€Å"Basing an argument on these figures can give an assumption that a near twenty percent of households fell in the middle class group.† New-fangled characterizations of what forms the Chinese middle class vary considerably, from a tenth to nearly fifty percent of the Chine se populace. A research survey performed in 2007 by Goldman Sachs Group discovered that only 100 million Chinese buyers could technically fall under the middle class (Schoppa 37). This research survey further estimated this figure to rise to 650 million by 2015. During the same year, (2007) the Asian Development Bank (ADB) stated that it might take some time for the government of China to elevate the living conditions of the low class to be in the same level with the high class (Schoppa 37). Furthermore, the ADB defined the Chinese middle class as consisting of individuals who earn between two dollars a day and nineteen dollars a day in income. Using these values, the people who belong to the middle class in China could have been close to 200 million people in 2008. This figure has been consistently rising given the attractive growth of the Chinese economy (Ling 47). It is estimated that Chinese middle class makes sixty percent of the national population of the country. This means t hat they are about 800 million people. Grouping people who earned two dollars daily in the middle class is ridiculous, given that the amount is insufficient to buy a chicken burger in the country. Moreover, that amount is inadequate for basic needs such as electricity and water. â€Å"Additionally, the international standards specify that, for a person to fall in the middle class category he should have a daily income of between $4 and $6† (Wagner 1). ADB divided the middle class into several categories of low, middle, and upper-middle class due to this unrealistic categorization of the middle-class. The lower middle-class earn from two to four dollars a day, the middle-middle class earn from four to ten dollars a day, and the upper-middle class earn from ten to twenty dollars a day (Mars 33). ADB also describes the well-heeled Chinese, or the upper class, as individuals who rake in twenty dollars per day on the lower side, which adds up to 7,300 US dollars per year. This aff luent populace consists of 44.8 million residing in the urban areas and 11.1 million residing in China’s rural areas. The Chinese Academy of social Sciences, on the other hand, considers those who use 30-37.3% of their income on food in China, as people of the middle class (Li 34). Li further states that, â€Å"people in households with a per-capita yearly disposable income of 16,300 Yuan to 37,300 Yuan fall in this category† (35). Despite the fact that the definition of the middle class in China is rather relative and vague, the number of people belonging to this category is rising. To broaden the scope of this study, and for clarity purposes, the researcher considers those who earn two and twenty dollars a day to be the middle class. A survey performed in 2010 by Brookings Institution predicted that the number of people who make up the middle class in the Asian continent is projected to augment from 28% in 2009 to 67 percent by 2030, which is an increase of 236 perce nt in a span of only two decades (Wagner 1). This statement also hypothesizes that the Chinese middle class is anticipated to be composed of more people not only because of the rate of China’s fiscal growth (the growth of a country’s economy within a given year) , but also due to people who are set to get out of their poverty status. It is expected that percentage of Chinese making ten dollars a day will rise to 74% from the present day 11% by 2030 (Lu 72). A research done in 2006 by the China National Research Association (CNRA) came up with six criteria for establishing elements that determine the Chinese middle class status. Li says, â€Å"This criterion is based on education, profession, salary, savings, societal influence, and holidays,† (90). In this respect, it has been argued that, apart from the above stated determinants, there are other criteria for determining class status. For example, not all people who earn US$2,600 to $6,430 per month meet the cri terion to be in the middle class group. This is because it has to be shown whether they own property, can afford regular holidays, and their consumption pattern is in line with the middle-income category ratings (Tsang 117). Appropriate definition of the middle class should include such criteria as living standards, patterns of consumption, career, reputation within the society, and the ability to express oneself (Wagner 1). The middle class will most certainly be small as compared to the estimates of ADB when the above standard is utilized to classify the middle class. Even though China has made notable accomplishments in its scuffle to improve the lives of its poor citizens, it has not made comparable advancements in structuring the middle class. A comprehensive urbanization course of action and a functional civil society are needed to institute an indisputable middle class. Despite the fact that the middle class in Asia has significantly lower spending and income than its Western counterpart, its growth in expenditure has been remarkable. China’s consumption of luxury products has grown rapidly. It could be the reason why most people mistakenly believe that most Chinese citizens are middle class. The definition of middle class in other countries is remarkably different from the Chinese perspective. The United States of America believes that middle class category should comprise of people who earn between 70 to 280 dollars a day. In the American perspective, the middle class is defined by occupation and income. They comprise of households having an annual income of between $25,000 and $100,000 (Wagner 1). The middle class in the United States feels extremely secure. They have good healthcare, job security, good housing, and educational facilities among other benefits. Furthermore, they enjoy a discretionary income that can be utilized on leisure pursuits and vacation. According to Li, this middle class is defined by consumerism and a constant up scali ng of lifestyle standards (90). In addition, this middle class category is willing to pay more for additional quality. The middle class in the United States is hardly considered a distinct faction in view of the fact that a greater part of the US citizens believe they fall under this category. In contrast, citizens in China see the middle class as a high-status group, which many aspire to belong. An individual who falls under this class is expected to live a lavish life. They are also expected to be well mannered. Even as the American middle class families will rather live in the suburbs, their Chinese counterparts fancy living in downtown areas or close to the central business district. In Germany, the middle-income class consists of households having an annual income of between $30,000 and $800,000, which accounts for fifty-five percent of the population. Brandt and Rawski note that, â€Å"In Brazil, the middle class constitute nearly forty-nine percent of the total populationâ⠂¬  (38). The middle class in China is expected to portray certain characteristics, which are unique from other social classes. In addition, they are expected to be people who travel a lot and have at least one vacation every year. Besides, they are expected to engage in relaxation activities such as having fancy feasts in classy restaurants and going to cinemas. They are expected to have a culture of spending that is well above those in low social strata. Furthermore, the Chinese National Bureau of statistics (CNBS) expects them to have a yearly income of nearly sixty thousand to five hundred thousand Yuan (Gerth 148). However, this figure may vary from one province to another based on the living standards of the province. China has several categories of middle classes, which differ from province to province depending on income among other factors. China uses three criteria to classify its citizens as middle class, which is income, occupation, consumption, and education. The middl e class person should be a person that holds a professional or managerial occupation, a businessperson, intellectual elite, or a manager with an extremely high income that can facilitate consumption in Mainland China. The middle class citizen is additionally required to possess higher education certification. He or she should also afford cars and other life-improving products (Ling 69). Mainland China has three types of middle-class citizens, depending on the economic, political, and social factors. These types are the new middle class, the old middle class, and the marginal middle class (Brandt and Rawski 38). The new middle class consists of professionals, managers and the capitalists. The old middle class are the small owners of firms, and businesses and the marginal middle class are the routine workers. The middle class in mainland China can be summarized as a mixture of four groups having different economic condition, socio-political function, and social status. These groups ar e the capitalist class, the new middle class, the old middle class, and the marginal middle class (Brandt and Rawski 39). According to Li, â€Å"The accelerated growth in China has paralleled the materialization of a new urban middle class,† (96). Li argues that presently, fourteen percent of the present Chinese population belongs to the middle class category (96). The citizens in this category are economically stable, well advanced in education and are no longer engaged in industrial or agricultural production. Rather, they are involved in service production and have an outward and modern looking worldview. In addition, they are optimistic about the dazzling opportunities that are availed to them. This new middle class signifies China as a consumer society given that its purchasing power brings durable electric and electronic equipment, cars, international and national tourism and traveling, meat-based diets, and large houses within the reach of the people. This unique purch asing power of the middle class is seen in the growth of car sales, which has been experienced in the past decade. This increase has made China the largest energy user in the world and the biggest car producer. In addition, it has made millions of Chinese move away from the poverty margins, and move to cities to make more money. This means that the demand for goods is rising in China, and companies all over the world are seeing it as an opportunity and a market for their goods (Tsang 87). The new middle class emerging in China is growing and for the first time, people are currently seen buying cars and other expensive goods. In addition, they have washing machines, refrigerators, clothes dryers, and electric ovens. These goods were rare in China nearly twenty years ago. Furthermore, a new service economy is rising in China. The service is identified with the middle class. For the first time, people are using video stores, stockbrokers, internet cafes, insurance companies, travel age nts, real estate agents, and repair services (Lu 132). These businesses have a significant and a growing market, which is substantially composed of the middle class. In addition, middle class families in China can now afford to send their children abroad for education, with their children making up a larger part of the university classes in Europe and the United States. These students will end up as engineers, computer programmers, doctors, and business executives. After their graduation, many of them will bring their skills home to China and increase the middle class category. Furthermore, the modern day middle class Chinese worker can afford to travel abroad, spend their money in foreign cities, shop for souvenirs, visit restaurants, rent hotel rooms, and purchase new clothes (Tsang 30). Consumerism in China China is one of the leading manufacturers of consumer goods in the world. Lately, it has shifted to be the world’s biggest consumer of nearly everything, from mobile ph ones to fast moving consumer goods such as beer. This trend has been widely encouraged by the increasing middle class population who form the majority of consumers countrywide. The government of China continues to encourage a culture of consumption among its citizens. Recently, the government took a considerable decision to stimulate consumer demand in China (Davis 77). This measure was motivated by the fact that most China’s products had already saturated the western markets, leaving it with few unexploited ones. Consequently, the Chinese industry had no other place to turn to, but its own population for purposes of ensuring continued economic growth. Given the present worldwide financial crisis, other western world producers have turned to the Chinese population to help save their economies. These factors among others have created a unique consumer culture that is bound to affect the middle class consumption trends (Tsang 98). Chinese exports to the United States have been declining and have apparently gone down by twenty six percent in 2000 (Davis 78). This fact has forced the country’s policy makers to devise strategies to get the thrifty Chinese citizens, and consumers to start spending. Consequently, the Chinese government announced a five hundred and ninety billion dollar stimulus package for this purpose and offered a thirteen percent rebate on electronics to its rural dwellers. Consumer behavior is always shaped by different factors. A consumer would have a negative perception towards a certain product because of cultural practices or other social factors. Peer is known to be one of the leading determinants of an individual’s behavior. Individual behavior would be shaped by the group behavior. The youth forms a market segment that is influenced by peer pressure. An individual would buy a product based on how his or her peer feels about that product. At this stage of development, the peers are extremely sensitive about what others think about them in society. They will always strive to eliminate all forms of negative comments from their age mates. They would also wish to be viewed as trendy individuals. Religious groupings would also affect the behavior of a consumer (Ling 71). Despite the high saving rates, the Chinese consuming patterns have increased with economic booms, and a number of families have steadily acquired more gadgets as their household incomes increases. The rapid economic developments taking place in China have given rise to a striking cross-generational disparity. It has also created a generation that is not prudent in consumption compared to the earlier generations. â€Å"This generation, which mainly comprises youths under the age of thirty-five, seems to have defied the saving culture that was instituted in the earlier generations in the Cultural Revolution,† observes Tsang (93). Another factor that has led to the emergence of this distinct class of spenders is China’s one- child policy. Under this policy, several adults raise up the new generation. Therefore, it enjoys a relatively large margin of spending (Davis 78). In the Chinese rural set-ups, majority still lead a lifestyle that is below the country’s average. However, there is a growing class of spendthrift Chinese, especially in major towns of this country. In addition, Chinese consumers show a strong consideration and loyalty to locally made brands. This means that the foreign companies venturing into the Chinese market have to form alliances with local companies, allocate resources into establishing distribution channels, and ensure their products and brands are accessible to their Chinese consumers (Davis 78).Most of the Chinese consumers in nearly thirteen of China’s cities are very keen on their expenditure (Davis 79). Consumers falling within the age groups of eighteen to twenty-nine years exhibit the highest tendency on this. Buyer behavior in China is mostly influenced by practical reasons, other than emotional reasons common in the west. In this nation, word of mouth recommendation for certain products carries more weight in comparison to advertising mediums. The new generations of Chinese consumers have set their sight on the high end of the Chinese market and have increasingly sought after the luxury market. The earlier generation viewed consumption of luxuries as a waste of money, which could rather have been saved somewhere. This has marked the new generation of consumers’ desire for status. This category is unabashed to flaunt their money on these luxurious items in order to achieve their desired status and reputation (Lu 61). In addition, the corporate culture of gift giving for the aim of building good business relationships has increased spending on luxurious items. Currently, China is ranked the second largest luxury market after Japan in the whole world and is poised to be the largest luxury market by 2016 (Li 157). Apart from the r ise in luxury spending, the Chinese consumer seems to follow a given trend. First, most of the transactions are done on a cash basis with credit cards and checks being used less frequently. As stated above, the government of China has been keen on encouraging consumption among its local populace. The impact of this move is evidently positive. Although the rate of consumption is not as high as the government would wish, the current Chinese market is extremely attractive both to the local and foreign investors. However, most of the middle class Chinese consumers like cheaper products. Haggling and bargaining between the vendor and customer, boss and employee are common, and the person who is more powerful determines their direction. Bargaining and squabbling are common between the Chinese even over minute purchases (Tsang 144). â€Å"Chinese are not successful consumers, buyers, or spenders, as those in the west because they only consume about fifty percent of what they produce,† says Davis (104). This level fell to thirty six percent of gross domestic product in 2000 from forty nine percent in 1990 (Davis 104). However, the twenty-first century has seen most of the Chinese increase their spending on consumer goods. This is part of government’s effort to encourage local consumption. The government has taken a keen interest in ensuring that products are priced fairly. This has motivated Chinese consumers to increase their expenditure. The youth seems to be the best beneficiary from this regulation. They like spending on trendy products, but have limited financial base. Consumer behavior in China comprises some unique features. First, the Chinese consumer market is evolving at a rapid rate and in most instances; new products are accepted before their predecessors even succeed in penetrating the market. The second reason is that the Chinese consumers value brand (Cheng and Kara 89). Consumer spending is apparently high between the age groups of twenty and forty-nine, the category born after 1980 when the economic reforms began to take shape, and they are the driving force of the Chinese consumer economy (Tsang 39). Works Cited Brandt, Loren, and Thomas Rawski. China’s Great Economic Transformation. Cambridge: Cambridge UP, 2008. Print. Cheng, Hong and Kara, Chan. 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China’s Consumer Revolution: the Emerging Patterns of Wealth and Expenditure. Cheltenham: Edward Elgar, 1999. Print. This essay on The Chinese Consumer Culture Phenomena was written and submitted by user Jair H. to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.