Posts tagged ‘children’

18/03/2016

Here comes the modern Chinese consumer – McKinsey & Co

Despite concerns about economic growth, the country’s consumers keep spending. Yet our latest survey reveals changes in what they’re buying and how they’re buying it.

Cooling economic growth, a depreciating currency, and a gyrating stock market are making political and business leaders concerned that China’s economic dream may be ending. Yet Chinese consumers remain upbeat. In fact, consumer confidence has been surprisingly resilient over the past few years as salaries have continued to rise and unemployment has stayed low.

 

However, our latest survey of Chinese consumers reveals significant change lurks beneath the surface. Reflecting 10,000 in-person interviews with people aged 18 to 56 across 44 cities, our 2016 China consumer report found that the days of broad-based market growth are coming to an end. Consumers are becoming more selective about where they spend their money, shifting from products to services and from mass to premium segments. They are seeking a more balanced life where health, family, and experiences take priority. The popularity of international travel is astounding among Chinese consumers, as is their adoption of trends such as mobile payments. And despite many similarities, consumer behavior can vary significantly among the country’s 22 city clusters.

In short, our latest research suggests we are witnessing the modernization of the Chinese consumer, and that will only make the market more challenging for consumer-goods companies. But for those able to get it right, the rewards may be substantial. In this article, we’ll examine the evolving behavior of Chinese consumers through three lenses: how willing they are to spend, what they are buying, and where they are buying.

How willing they are to spend

When asked about their expectations regarding future income, 55 percent of consumers we interviewed were confident their income would increase significantly over the next five years—just two percentage points lower than in 2012. (By comparison, just 32 percent of consumers in the United States and 30 percent in the United Kingdom agreed with the same statement in 2011.)

That’s not to say that Chinese consumers are unaware of the deteriorating condition of the economy. A growing number are seeking to save and invest, and we found differences in consumer confidence widening at a regional level. While confidence about income growth during the next five years rose to 70 percent in the Xiamen–Fuzhou city cluster, for example, it decreased to as little as 35 percent in Liao Central.

What they are buying

We found that consumers are generally becoming more selective about their spending. They are allocating more of their income to lifestyle services and experiences—over half plan to spend more on leisure and entertainment (the 50 percent surge in box-office receipts in the past year is just one indicator of that trend). At the same time, spending on food and beverages for home consumption is stagnating or even declining.

Chinese consumers are also increasingly trading up from mass products to premium products: we found that 50 percent now seek the best and most expensive offering, a significant increase over previous years. It’s no surprise that the growth of premium segments is outpacing that of the mass and value segments, and foreign brands still hold a leadership position in that premium market. What’s more, a rising proportion of Chinese consumers focus on a few brands, and some are becoming loyal to single brands. The number of consumers willing to switch to a brand outside their “short list” dropped sharply. In apparel, for instance, the number of consumers willing to consider a brand they hadn’t before dropped from about 40 percent in 2012 to just below 30 percent in 2015.

Becoming part of the closed set of the few brands that consumers consider, or even the one brand that consumers prefer, is increasingly challenging. Fewer consumers are open to new brands, and promotions are becoming less effective at encouraging consumers to consider them.

With a few notable exceptions, such as Huawei’s growing share of the premium-smartphone market, Chinese brands have not gained much traction in many premium segments, such as skincare, cars, sports, and fashion. That contrasts starkly with the mass segment of the market, where local brands are winning market share from foreign incumbents by offering a much stronger product proposition.

Where they are buying

Although China is the world’s largest e-commerce market—generating revenue of about 4 trillion renminbi ($615 billion) last year, around the same as Europe and the United States combined—and consumers increasingly purchase online, physical stores remain important. Consumers engage with brands both online and offline, and satisfaction with physical stores remains higher than with online ones. But the gap is narrowing, especially as satisfaction with hypermarkets declines.

One trend that is helping maintain interest in physical stores is “retailtainment.” Two-thirds of Chinese consumers say that shopping is the best way to spend time with family, an increase of 21 percent compared with three years ago. Malls—which combine shopping, dining, and entertainment experiences the entire family can enjoy—have benefited most from this trend, at the expense of big-box retail outlets such as department stores and hypermarkets.

Consumers also reinforce family ties through travel: 74 percent of consumers say it helps them to better connect with family, and 45 percent of international trips were taken with family in 2015, compared with 39 percent in 2012. More than 70 million Chinese consumers traveled overseas in 2015, making 1.5 trips on average, and shopping is integral to this experience. Some 80 percent of consumers have made overseas purchases, and nearly 30 percent actually base their choice of a travel destination on shopping opportunities. Among international travelers, around half of their watch and handbag purchases are made overseas, while apparel and cosmetics are the most frequently purchased categories.

Overall, Chinese consumers are adopting new products, services, and retail experiences at rates unseen in developed markets. To take one example, mobile-payment penetration in China went from zero in 2011 to 25 percent of the population in 2015. At the same time, there are still differences in how Chinese consumers in various regions spend. While new highways, high-speed-rail links, and mobile Internet access have strengthened connectivity between neighboring clusters over the past few years, we found that differences across the country’s 22 geographic clusters1have grown even more pronounced. For instance, 35 percent of consumers in the Shanghai city cluster have purchased apparel online in the past six months, compared with just 4 percent of consumers in the Chengdu city cluster.

The Chinese consumer is evolving. Gone are the days of indiscriminate spending on products. The focus is shifting to prioritizing premium products and living a more balanced, healthy, and family-centric life. Understanding and responding to these changes in spending habits will be decisive in determining the companies that win or lose, whether international or domestic competitors. And while scale, speed, and simplicity proved advantageous in the past 15 to 20 years, the changing shape of Chinese consumption seems sure to topple some giants of the past and elevate new champions. Which will your company be?

Source: http://www.mckinsey.com/Industries/Retail/Our-Insights/Here-comes-the-modern-Chinese-consumer?cid=other-eml-alt-mip-mck-oth-1603

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15/12/2014

The Chinese Military’s Response to Unannounced Drones: Blow ‘Em Out of the Sky – China Real Time Report – WSJ

Earlier this year, a court in suburban Beijing said it was preparing to try employees of a Chinese drone company on charges of “negligently endangering public safety” after an unmanned aircraft disrupted commercial flights and led the air force to scramble helicopters in response.

The drone flight in question happened on Dec. 29, 2013, in the eastern Beijing suburb of Pinggu. Operated by employees of Beijing UAV Sci-Tech Co., the drone forced several commercial flights to alter their flight paths and caused others to be delayed. According to reports in October, the People’s Liberation Army dispatched helicopters to force the drone down.

In Sunday’s report, the People’s Liberation Army Daily said the drone was in fact shot out of the air.

The shooting came after an unidentified object showed up on military radar, according to the report. Air force commanders ordered several regiments to prepare for battle and dispatched six ground teams to the area where the object was detected. Minutes later, the air force identified the object as a small aircraft and immediately notified the Beijing Military Area Command, as well as the public security bureaus in Beijing and neighboring Hebei province.

A military helicopter was dispatched to investigate further. “The drone continued to ignore warnings and fly in the direction of  Beijing Capital Airport,” the newspaper said. “The Beijing Air Force commander made a firm decision: Avoid densely populated areas and use a shotgun to bring the target down.” (It wasn’t clear from the report what sort of weapon that would be, leaving China Real Time to wonder whether they used a shotgun-like weapon attached to the helicopter or whether a crewmember popped off a 12 gauge through an open window.)

After the helicopter opened fire, the drone fell. As the helicopter descended to check on the drone, it discovered the three operators next to a car. The trio and their car were immediately taken into custody, the newspaper said.

via The Chinese Military’s Response to Unannounced Drones: Blow ‘Em Out of the Sky – China Real Time Report – WSJ.

03/12/2014

China’s Left-Behind Children are Lonely, Underperforming, and Sad – Businessweek

China has an estimated 61 million “left-behind children”—youths in the countryside who grow up separated from migrant worker parents. A survey has just detailed the problems facing an alienated generation whose members are usually raised by relatives, educated in rural boarding schools, or even forced by circumstance to live alone.

China's Left-Behind Children Are Lonely, Underperforming, and Sad

Without proper attention, many regularly suffer injuries, says a report released on Nov. 30 by the China Youth & Children Research Center. Almost half of the group’s members (known in Chinese as liushou ertong) has been injured in accidents involving cuts, burns, animal bites, traffic accidents, and electric shocks. That was 5.3 percent higher than the rate of injury experienced by other children, the study said.

With most attending underfunded, overcrowded rural schools—or even dropping out—the academic problems facing left-behind children are particularly severe. More than four-fifths reported problems with declining scholastic performance, and 43.8 percent were not interested in studying.

Just under 70 percent of left-behind children reported being unable to understand their class lessons. About one-half had problems finishing homework, 40 percent were late for classes, and 5.5 percent were often absent—all higher rates than those experienced by children raised by their parents.

Without access to adequate social support, many reported experiencing negative feelings. Almost one-half were irritable, while around 40 percent said they were unhappy. One-fifth said they had problems losing their temper without good reason.

Left-behind girls were even more vulnerable than boys, repording higher rates of problems in each of these areas, as well as a lower sense of self-worth than their male counterparts. As for loneliness—a problem experienced by all the left-behind children— girls again suffered more: Some 42.9 percent of left-behind girls said they often feel lonely. That’s 6.2 percent higher than their male counterparts reported, and it’s 6.7 percent higher than girls who live with their parents.

via China’s Left-Behind Children are Lonely, Underperforming, and Sad – Businessweek.

24/11/2014

China’s rich want to send children abroad for education – China – Chinadaily.com.cn

An overwhelming majority of China’s richest people are likely to send their children abroad for education, the United States and the United Kingdom being their first choices, according to a Hurun Report on education.

China's rich want to send children abroad for education

A Chinese student at the 2014 International Education Exhibition in Beijing on October 25, 2014. [Photo/IC]

The report said that some 80 percent of the country’s rich people have plans to send children abroad, the highest ratio in the world. By contrast, Japan has less than 1 percent and Germany has less than 10 percent of its rich people having such plans, said the report.

The rich people are most likely to send their children to the United States and the United Kingdom while other countries such as Australia, Canada, Switzerland, New Zealand, Singapore, France and Germany attract most of the rest.

The report also found that the students tend to get younger. The average age of the millionaires’ children is 16 years old when they were sent abroad.

Rupert Hoogewerf, publisher of the report, said ten years ago, Chinese rich people could only send their children to Canada and Australia because large number of Chinese people there. “Now, the Chinese rich people have a much broader social network, as a result of which they can find trusted people anywhere in the world and can rest assured sending children to any country.”

“Long time overseas study of these students can definitely do good to the globalization of China’s economy,” said Rupert.

via China’s rich want to send children abroad for education – China – Chinadaily.com.cn.

07/11/2014

Myopia: Losing focus | The Economist

SPARKLY, spotted or Hello Kitty: every colour, theme, shape and size of frame is available at Eyeglass City in Beijing, a four-storey mall crammed only with spectacle shops. Within half an hour a pair of prescription eyeglasses is ready. That is impressive, but then the number of Chinese wearing glasses is rising. Most new adoptees are children.

In 1970 fewer than a third of 16- to 18-year-olds were deemed to be short-sighted (meaning that distant objects are blurred). Now nearly four-fifths are, and even more in some urban areas. A fifth of these have “high” myopia, that is, anything beyond 16 centimetres (just over six inches) is unclear. The fastest increase is among primaryschoolchildren, over 40% of whom are short-sighted, double the rate in 2000. That compares with less than 10% of this age group in America or Germany.

The incidence of myopia is high across East Asia, afflicting 80-90% of urban 18-year-olds in Singapore, South Korea and Taiwan. The problem is social rather than genetic. A 2012 study of 15,000 children in the Beijing area found that poor sight was significantly associated with more time spent studying, reading or using electronic devices—along with less time spent outdoors. These habits were more frequently found in higher-income families, says Guo Yin of Beijing Tongren Hospital, that is, those more likely to make their children study intensively. Across East Asia worsening eyesight has taken place alongside a rise in incomes and educational standards.

The biggest factor in short-sightedness is a lack of time spent outdoors. Exposure to daylight helps the retina to release a chemical that slows down an increase in the eye’s axial length, which is what most often causes myopia. A combination of not being outdoors and doing lots of work focusing up close (like writing characters or reading) worsens the problem. But if a child has enough time in the open, they can study all they like and their eyesight should not suffer, says Ian Morgan of Australian National University.

Yet China and many other East Asian countries do not prize time outdoors. At the age of six, children in China and Australia have similar rates of myopia. Once they start school, Chinese children spend about an hour a day outside, compared with three or four hours for Australian ones. Schoolchildren in China are often made to take a nap after lunch rather than play outside; they then go home to do far more homework than anywhere outside East Asia. The older children in China are, the more they stay indoors—and not because of the country’s notorious pollution.

via Myopia: Losing focus | The Economist.

07/08/2014

One lakh children go missing in India every year: Home ministry – The Times of India

On February 5, 2013, a Supreme Court bench, angry over 1.7 lakh missing children and the government’s apathy towards the issue, had remarked: “Nobody seems to care about missing children. This is the irony.”  (Ed note: 1 lakh = 100,000)

English: Children in Raisen district (Bhil tri...

English: Children in Raisen district (Bhil tribe), MP, India. Français : Enfants dans le district de Raisen (tribu Bhil), M.P., Inde. (Photo credit: Wikipedia)

Close to one and a half years later, government data show over 1.5 lakh more children have gone missing, and the situation remains the same with an average of 45% of them remaining untraced.

Data on missing children put out by the home ministry last month in Parliament show that over 3.25 lakh children went missing between 2011 and 2014 (till June) at an average of nearly 1 lakh children going missing every year.

Compare this to our trouble-torn neighbour Pakistan where according to official figures around 3,000 children go missing every year. If population is an issue, then one could look at China, the most populous nation, where official figures put the number of missing children at around 10,000 every year.

National Crime Records Bureau, in fact, deciphers missing children figures in India in terms of one child going missing in the country every eight minutes.

More worryingly, 55% per cent of those missing are girls and 45% of all missing children have remained untraceable as yet raising fears of them having been either killed or pushed into begging or prostitution rackets.

Maharashtra is one of the worst states in terms of missing children with over 50,000 having disappeared in the past three and half years. Madhya Pradesh, Delhi and Andhra Pradesh are distant competitors with all recording less than 25,000 missing children for the period.

Worryingly, however, all these states have more missing girls than boys. In Maharashtra, 10,000 more girls went missing than boys. In Andhra Pradesh, the number of girls missing (11,625) is almost double of boys (6,915). Similarly, Madhya Pradesh has over 15,000 girls missing compared to around 9,000 boys. Delhi, too, has more girls (10,581) missing compared to boys (9,367).

via One lakh children go missing in India every year: Home ministry – The Times of India.

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