Consumer markets beyond Shanghai

November 2007

Much of the focus of attention of the corporate world over the past five years has been on China and, in particular, amongst China's cities, on Shanghai. And with reason: galloping overall Chinese economic growth, even faster development of the coastal areas, and the confirmation of Shanghai as the country’s commercial centre of gravity have all contributed to the emergence of a substantial – and lucrative – cohort of consumers in that city. The growing purchasing power of this hitherto impoverished group of shoppers is making them an attractive target for international consumer goods and services companies.

However, in their rush to secure a foothold near the Bund, companies should not lose sight of a trend that is present in other emerging markets as well: the rise of the middle class consumer. From China’s provinces to parts of Latin America and the markets on the European Union’s horizon, disposable incomes are increasing, aspirations are Westernising and shiny new credit cards are buying air conditioners, couture jeans, internet-ready phones and the latest fuel-efficient vehicles.

To enhance our understanding of the future consumption hot spots, PricewaterhouseCoopers (PwC) has developed a city wealth quantitative model that estimates the number of households within different income brackets in a given geographic location, and produces forecasts of future consumption capacity for these locations. The model is based on income distribution, demographic and macroeconomic data for emerging markets across the world. It allows for a detailed and location-specific analysis of the levels and concentrations of wealth. In doing so, it points to the population clusters where the economic dynamism described above is most prevalent.

PwC also provides in-depth and consistent coverage of 40 countries and regions on its client website. The team behind this report specialises in advising clients on market demand, business environment, and business impact issues.