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China Catalyst: Powering Global Growth by Reaching the Fastest Growing Consumer Market in the World

China Catalyst: Powering Global Growth by Reaching the Fastest Growing Consumer Market in the World

David M. Holloman

ISBN: 978-1-118-66127-7

Sep 2015

192 pages


Maximize your presence in the China market

To drive the next round of global growth, companies will need to transition their operations and focus to one that serves the Chinese consumer. China Catalyst examines in-depth the transition currently underway in China from an export-led economic machine to a consumer-driven market. It outlines the economic imperative proving that greater consumer reach in China is a requirement in today's globally competitive market. China Catalyst also provides analysis that segments the market, helping you understand the hotbeds of emerging consumer demand helping prioritize your company's growth expansion in the market.

  • Provides a current view of the growth and channels of modern retail now growing across the entire market
  • Considers the importance of understanding China's 'Digital World,' the unique online universe that is critical to reaching new consumers
  • Explores the current distribution as well as the supply chain trends and challenges that will help form the basis of a distribution strategy fundamental to market expansion

Leaders of Fortune 500 companies are beginning to realize that tapping the full growth opportunity in the China market is a requirement. Those companies that successfully make this transition will be among the winners in the next era of global competition. China Catalyst will enable you to be at the forefront in understanding this transition and capitalize on this historic shift.

Preface ix

Acknowledgments xiii


CHAPTER 1 Into the Light: China’s First Economic Miracle 3

A System Spirals Out of Control 6

Chaos Returns 7

Riding South to Reignite Reform 12

The Rise of Shenzhen and a New China 13

Notes 15

CHAPTER 2 Economic Transition 17

Wage Rates Are Increasing Signifi cantly 17

Foreign Direct Investment Is Evolving 20

Export-Directed Growth Is Being Challenged 21

Demographic Megatrends 22

The Rise of the Chinese Consumer 25

Notes 28

CHAPTER 3 Catalysts for Consumption 31

Build It Quickly: The Physical Infrastructure to Move Goods and People 33

Incentives to Increase Consumption 38

The Free Flow of Capital 40

Notes 43


CHAPTER 4 One Country, Many Markets 47

Disposable Income: Who’s Got the Most? 50

Urban Income Growth Rates: Emerging Consumers 50

Getting a Fuller Picture 52

Consumer Demand Clusters 57

Notes 64

CHAPTER 5 Channels to a Growing Market 65

An Overview of China’s Major Channels to Market 66

A Closer Look at China’s Top Brick-and-Mortar Retailers 75

Notes 81

CHAPTER 6 Guan Xi Goes Online 83

An Overview of China’s Digital World 85

The E-Commerce Rocket 87

E-Logistics: The New Core Capability 90

The Infl uence of Social Media 91

Go Where the People Are 95

Notes 96

CHAPTER 7 Distribution Issues and Trends 99

Overview of the Distribution Structure 100

Closing the Consumer Trust Gap 105

Distribution Trends 110

Retailer-Supplier Partnerships 114

Notes 117

CHAPTER 8 Hefei: Home of the World’s Next-Generation Consumer 119

Life in the Middle 119

China’s Sibling 122

Hefei Rises 124

Big Retail Moves In 127

Notes 130


CHAPTER 9 Go Deep: The Emerging Go-to-Market Retail Model 135

The Emerging Go-to-Market Model 138

Targeting Demand Clusters and Expanding Out 138

Expanding In 140

The Implications for Retailers and Manufacturers 142

IT as an Enabler 145

Notes 148

CHAPTER 10 The New Export Machine 149

Two Examples of China-Based Innovation: Kraft Foods and the Coca-Cola Company 150

Switching the Innovation Gear 152

Digital Culture 156

Multichannel Innovation 157

Notes 158

CHAPTER 11 The Path Forward 161

Challenges at a Crossroad 162

Final Thoughts on Strategy 164

Conclusion 166

Notes 168

About the Author 169

Index 171