According to research by China Internet Watch (CIW), mainland China is now home to 33.2 million middle-class households. The majority of middle-class households are based in East China, accounting for over 40% of the total.
Over 10 million out of the 33.2 million Chinese households belong to the ‘new middle class’ which refers to people who own a high level of consumption capacity and a certain amount of discretionary income. For the first tier cities that means that annual income per household should be at least 300 thousands yuan (US$43.5k, or 200 thousands yuan (US$29k) in other cities.
The average age of the new middle class in China is 35. They have a Bachelor degree or higher education level, 94% of them are married and 79% are having at least one child.
For this generation, consumption has become a way of showing your lifestyle, and the new middle class is more focused on quality and the additional value that product and services can bring, instead of frictions and higher price tags which it used to be. They are no longer satisfied with just a car, house or consumption capacity and they want to pay more attention to improve self-cultivation and life quality.
Traveling is the most popular entertainment activity among China’s new middle class and they spent an average of 74 thousands yuan (US$10.73) a year on exploring the world. During the holiday of Spring Festival 2019, Australia, Thailand and New Zealand were the top three destinations for Chinese outbound travel.
Providing their children with a good education is the top concern after work, with Chinese parents spending 90 thousands yuan (US$13.05k) on average on their children’s education in the past year. Furthermore, 93% of the middle-class parents have a plan or already prepared to send their child to study abroad.
China’s new middle class is growing quicker than anyone could have estimated and it is highly significant for companies to adapt to their needs - or risk watching competitors succeeding as the market shifts beneath them.
