IAG March 2015 - page 9

March2015
inside
asiangaming
9
Cover Story
class, by 2022 more than 75% of China’s urban consumers will
be earning US$9,000 to $34,000 a year, which, in purchasing-
power-parity terms, ranges between the average income of Brazil
and Italy. In 2012, some 68% of urban Chinese households
were already within that range, compared to just 4% in 2000,
reveals the study. “The evolution of the middle class means that
sophisticated and seasoned shoppers—those able and willing to
pay a premium for quality and to consider discretionary goods
andnot just basic necessities—will soon emerge as the dominant
force,” states an article in theMcKinseyQuarterly titled “Mapping
China’smiddle class.”
The article outlines the division of China’s middle class into
different generations, “themost strikingof whichwe call Generation
2 (G2). It comprised nearly 200 million consumers in 2012 and
accounted for 15% of urban consumption. In ten years’ time, their
shareof urban consumer demand shouldmore thandouble, to 35%.
By then, G2 consumers will be almost three times as numerous as
thebaby-boomer population that hasbeen shapingUS consumption
for years.”
The article goes on to describe this fast-growing consumer
group: “These G2 consumers today are typically teenagers
and people in their early 20s, born after the mid-1980s and
54,688
57,711
57,911
57,633
64,689
64,917
54,458
46,746
45,959
3%
10%
11%
13%
18%
12%
-6%
-19%
-29%
68%
68%
67%
65%
65%
64%
60%
56%
61%
20,297
24,011
24,772
28,004
31,680
33,352
32,816
32,373
26,491
31%
30%
31%
37%
40%
39%
32%
16%
-16%
28%
28%
29%
31%
32%
33%
36%
39%
35%
3,591
3,562
3,480
3,547
3,747
3,930
3,613
3,736
3,128
16%
6%
6%
13%
7%
10%
4%
5%
-17%
4%
4%
4%
4%
4%
4%
4%
5%
4%
80,827
85,284
86,163
89,185
100,116
102,199
90,887
82,855
75,579
14%
15%
16%
20%
24%
20%
5%
-7%
-25%
4Q ‘12 1Q ‘13 2Q ‘13 3Q ‘13 4Q ‘13 1Q ‘14 2Q ‘14 3Q ‘14 4Q ‘14
MassMarket’sUnbrokenRunEnds
|MacauGamingRevenuebySegment
China’sMiddleClassEmerges
250
225
200
175
150
125
100
75
50
25
0
Chinesehouseholdswith incomegreater thanUS$10,000
Source:
Economist IntelligenceUnit,A.T.Kearneyanalysis
2000
2010
2020
3
60
230
+1,900%
+283%
Millionsof households
1,2,3,4,5,6,7,8 10,11,12,13,14,15,16,17,18,19,...48
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