In recent years, people have seen many news articles about Chinese citizens shopping abroad in newspapers and social media. Coupled with the real estate boom in first and second-tier cities, it seems that Chinese people are wealthy and have entered a stage of consumption upgrade.
During this year’s Two Sessions, Premier Li mentioned that there are still nearly 600 million people in China with a monthly income below 1000 yuan, which left everyone astonished. Especially in first and second-tier cities, it feels like everyone around is earning over 10,000 yuan a month.
The following two tables show the statistical data on the distribution of per capita monthly income among different regions and population at various income stages.
What we see around us is that many products only target that 1-2% of the population, while the needs of the 70% of users with an income below 2000 yuan remain unmet, and the surplus of quality still exists for them.
It seems that we are surrounded by college students, but in reality, the proportion of college students in China is less than 1%. This is a cognitive bias; we tend to use our surroundings and what we see as a reference. But the actual situation is even more dire than imagined.
Xiaomi, with its reasonably priced and heartfelt products, meets the aspirations of the 400 million people in the middle for a better life, but what about the 900 million at the bottom?
China has 800 million internet users, which means that there are still 600 million people who are not online at all. The discussions about consumption upgrades and social anxiety may truly be a hallucinatory phenomenon.
While everyone is focusing on the current stock market, that 600 million population could be the new blue ocean. There is still a huge market space for disruptive products that can meet the needs of the sinking market with low prices and adequate quality.