Recently Wei Jianguo, former deputy minister of the Ministry of Commerce of China, declared that he expects, for the end of 2020, China’s market to be worth 45 Trillion RMB in total, potentially overtaking the US and becoming the largest market worldwide. In 2019 China’s market was worth 40 Trillion RMB, so it’s an expected growth of 12,5%.
Last year many analysts pointed out that China would overtake USA as the biggest consumer market due to the average growth of China being far higher than USA’s, but eventually it did not happen.
USA’s consumer good market reached 45,21 Trillion RMB in 2019, so it will depend on how both USA and China manage their post-coronavirus recovery.
One of the reasons for the expectations of growth are the increases in purchasing through new advertising methods such as livestreaming combined with the increase of money privately lent, which mean that the desire for consumer goods is increasing even during the crisis. Furthermore, he believes that one of the keys to this growth will be finding the solution to reach the one type of consumer that the e-commerce is having a hard time with worldwide: elder people.
As the chart above shows, with the coronavirus crisis, China experienced a 20% shrinking of its consumer goods market between January and February, and it’s trying to reverse the course: in March the decline was reduced to 15,8%, and in April to 7,5%. Following this trend, positive results should be close.
According to the slow recovery of the consumer good market, it is to be expected that companies focused on premium and luxury products and services will recover their momentum later on, around the second half of the year. This is a good news for high-end brands, especially from other countries. Those who are struggling more with the coronavirus crisis and seeing a general decrease of the sales need a market to help them stabilize the balance. For some, there may be no better time than this to get into the Chinese market.