Chinese cities like Foshan, Wenzhou, or Changsha may not be considered to be among the country’s luxury epicenters, but a new study by The Economist Intelligence Unit finds that by 2030, lower-tier cities like these will have more “high-income” consumers than Beijing has now.
According to the “Chinese Consumer in 2030” report released this week, 35 percent of China’s population is predicted to be “upper-middle class” or above by 2030. This will amount to about 480 million people, marking a massive increase from the current estimate of 132 million upper-middle class people in China (10 percent of the population).
The Economist defines a concept of “upper-middle class” as anyone with disposable income of at least US$10,000. Meanwhile, luxury retailers will be especially interested in tracking the growth of “high-income” earners, which it categorizes as those with RMB200,000 (almost US$30,000) in disposable income—a group that will surpass 10 million people in Shanghai by 2030 (up from around 4 million now).
But it’s not just the staggering Tier 1 city growth in high-income consumers that is especially of interest to luxury brands—it’s also their populations’ rapid expansion in smaller cities across China. The report finds that Shanghai, Beijing, Shenzhen, and Guangzhou will continue to dominate as the top four cities for number of high-income consumers, respectively, in 2030. But a staggering number of smaller cities will also have passed up where the top tier is at now, which is set to have a dramatic impact on the ways retailers target consumers in these cities.
Tianjin is expected to surge to fifth place by 2030 as the government works to incorporate it into the “Jing-Jin-Ji” metropolis. Meanwhile, southern cities Hangzhou and Suzhou will be sixth and eighth, while Sichuan powerhouses Chongqing and Chengdu will come in seventh and ninth. The 2030 high earner population projections for all of these cities are higher than Beijing’s number as of 2015, which is about 2 million people. Many other smaller cities ranking after Chengdu will surpass this 2 million benchmark, including Wenzhou, Nanjing, Foshan, Changsha, Qingdao, and Ningbo. Rounding out the list of top 20 cities for high-income individuals will be Wuhan, Wuxi, Jinan, Xiamen, and Xi’an.