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Last year, Chinese consumers bought $9 billion of luxury items — the second highest in the world. Retail sales there soared 18 percent with firms like Apple and Yum! generating billions in revenue in the same year.
The Chinese consumer is the greatest growth story of the next decade as rising incomes, greater access to credit and financial services and a drop in household savings spurs more consumption.
But even as Western brands rush in to cash in on China's massive spending power, not all of them will be as successful as the likes of Nike, which earned around $800 million in profits on nearly $2 billion in revenue.
Many may well end up retreating from the market as Home Depot did, or fail to live up to expectations like eBay,because they've failed to understand the evolving Chinese consumer habits.
So, what are the common misconceptions about the Chinese spender?
For one, Western brands need to understand there is no Chinese middle class in the American context. In the United States, the middle class tends to be a fairly static socio-economic group. People are born into it and their children and grandchildren tend to retain similar middle class habits like shopping at Macy's , driving Ford cars and visiting the Disney theme parks during vacations.
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