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Advertisers miss China's middle class

15 November 2013
BEIJING: China's fast-growing middle class is spending more time online and using digital media but advertisers have yet to allocate media budgets accordingly, a new report has said.

The study from ZenithOptimedia Greater China – Discover China's Emerging Middle Class – was based on the findings of a survey of about 17,700 respondents in 150 cities. It identified the emerging urban middle class as a growing group, defined as those with an annual household income of at least 72,000 yuan ($11,815) in tier-one and tier-two cities and 48,000 yuan in tier- three and -four cities.

One tenth of China's population can currently be classified as middle class, reported China Daily, and many more aspire to that status, with the report predicting there will be 356m such consumers by 2020.
 
"The Chinese middle class is not necessarily the richest, as a large number of young people are put into this category," said Steven Chang, CEO of ZenithOptimedia Greater China, "but they definitely promise more wealth with a bigger purchasing power in the near future."

Chang further observed that middle-class households were significantly more likely than the general public to spend time online, with their daily internet use being 34% higher, while their time spent on digital media rivalled that on TV.

"But the advertisers have not invested enough regarding the new habits of the emerging middle class," he said. "About 45% of their time is devoted to the internet, but money invested to that end only takes up about 16%."

He also highlighted a similar gap regarding online video. "The middle class spent about 10% of their time on online video, but only 1.5% of advertising money is targeting this part."

It was clear, he suggested, that advertisers and brands had plenty of room for improvement.

The study said the Chinese middle class had a better understanding of brands than the general public and were enthusiastic consumers. As examples of this, the value of luxury watches bought by this group each year totalled 49bn yuan, while they spent around 300bn yuan on travel.

A separate survey of China's middle class from the insurance group AIA found that health was a priority for most, ahead of wealth and career which have commonly been seen most important for this group.

Data sourced from China Daily, Insurance Insight; additional content by Warc staff

 
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