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China's Consumer-Goods Gaps Represent Budding Market Opportunities

by Tao Wu and Steve Crabtree

Half of rural Chinese own a mobile phone; 4% own a computer


PRINCETON, NJ -- Leading China experts and Chinese officials alike have grown increasingly alarmed that the country's current production-intensive and export-oriented growth is unsustainable. Worse, it's bound to produce a number of alarming side effects, including growing trade imbalances, more pressure from rapid rural migration to the cities, and an increase in already-dangerous pollution levels in urban areas.

Making consumer spending a more central element of growth won't be easy. Formidable financial and logistical barriers to increased consumer spending in China remain -- especially rural China. Nevertheless, new Gallup World Poll results give reason to believe market opportunities are growing even there.

Though the urban-rural divide continues to widen, Gallup's 2006 survey results point to a significant rise in the average income among rural Chinese. As consumerism in rural areas begins to grow, the huge gaps between those living in urban and rural areas in terms of consumer product ownership will present lucrative business opportunities for those savvy enough to market to the hinterlands. Currently, about half of rural Chinese (49%) say they own a mobile phone, compared with 82% of urban Chinese. Just 4% of rural residents own a computer, versus about one-third (33%) of urban dwellers.  

Obviously,China is not an easy market to understand. The basic urban-rural distinction made here does not reflect the multiplicity of living conditions and preferences within urban and rural areas. But it does suggest that there are ample opportunities in both environments, and the data point to the idea that reliable assessments of the way consumer behavior is evolving throughout the country can improve companies' odds of success.

Survey Methods

Results are based on 3,730 face-to-face interviews conducted across China in October 2006, with residents aged 15 and older. For results based on the total sample, one can say with 95% confidence that the maximum error attributable to sampling and other random effects is ±2 percentage points. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.


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