OK, so we all know that the Chinese economy is growing at a breakneck pace. But what are the latest trends and must-have items in this growing economy? Recently, McKinsey & Company took a closer look at Chinese shopping habits to determine where potential growth spots may be.
shops till it drops
It turns out that the Chinese love to shop, with those surveyed shopping 9.8 hours per week (as a comparison, the average American shops 3.6 hours per week). 41% of the Chinese shoppers surveyed said that shopping was their top leisure activity. Chinese shoppers are looking at shopping as an experience, with 60% looking for top brands in stores (even if the prices were way out of reach). 69% would buy these aspirational products if they could afford it. But just because the Chinese like to shop, that doesn't mean that they're buying, does it?
Well, it looks to be a little bit of both. McKinsey estimates that the Chinese market was No. 3 in retail sales last year -- behind only the U.S. and Japan, with $800 billion in sales -- and estimated to jump by more than 60% in the next five years, reaching $1.3 trillion annually by 2012. Yes, the Chinese are daydreaming about beautiful things that they can't afford (aren't we all?), but they are increasing their overall purchasing power in the process.
And the Chinese are not just looking to buy the cheapest thing out there. 52% of respondents thought that low price equals low quality, so only 12% of Chinese shoppers purchased the cheapest food available, no matter what the actual quality was.
Add retail stocks to your shopping list?
With the U.S. economy lagging, now is as good a time as any to start adding stocks with international growth prospects to your portfolio. Considering that power shopping is the newest Chinese trend, it isn't a bad idea to think about retail stocks with long-term global business opportunities as a way to boost your earnings.
High-end retailer Tiffany
Consider Avon Products
A revived Just Do It campaign has helped Nike
A nation of shoppers
Of course, Chinese economic growth will be affected by the same factors that are slowing the U.S. economy right now, including fuel prices, which are federally regulated and have just jumped by 18%. But as wealth continues to steam ahead, so will the retail-based investing opportunities in this nation of power shoppers.
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