Smaller cities’ big ap­petite fu­els deals at Shang­hai expo

China Daily (Hong Kong) - - FRONT PAGE - By JING SHUIYU in Shang­hai jing­shuiyu@chi­nadaily.com.cn Shi Jing and He Wei con­trib­uted to this story.

The in­creas­ingly pros­per­ous pop­u­la­tion of Chi­nese con­sumers liv­ing in smaller cities has driven a deal-mak­ing boom at the first China In­ter­na­tional Im­port Expo in Shang­hai.

Home­grown com­pa­nies’ pur­chases of im­ported goods were fu­eled by the strong ap­petite of smaller cities. Th­ese mar­kets, ac­cord­ing to the es­ti­ma­tion of in­vest­ment bank Mor­gan Stan­ley, will cre­ate a $9.7 tril­lion con­sump­tion mar­ket by 2030.

Dur­ing the CIIE, which ends on Satur­day, Sun Lin, a di­rec­tor of Guizhou Heli Busi­ness and In­vest­ment Group, led a team to search for new prod­ucts for the re­tailer’s 80 super­mar­kets lo­cated in Guiyang, Guizhou prov­ince in South­west China.

In a sin­gle day, Sun pur­chased about 30 mil­lion yuan ($4.3 mil­lion) worth of com­modi­ties, in­clud­ing milk pow­der, edi­ble oil and ce­re­als from Aus­tralia, and peanut but­ter orig­i­nat­ing in the United King­dom.

“Th­ese new prod­ucts will be avail­able to cit­i­zens in Guiyang by the end of this year,” Sun said, adding that lo­cal con­sumers have up­graded their de­mand for daily ne­ces­si­ties.

“The na­tional-level im­port expo makes it con­ve­nient for us to se­lect and pur­chase high­qual­ity goods and ser­vices world­wide,” Sun said.

For con­sumers in East China’s Fu­jian prov­ince, a new type of anti-can­cer medicine will be avail­able soon. Feng Ling, gen­eral man­ager of Guan­hua Med­i­cal Corp, said it will be the first time that Fu­jian com­pa­nies in­tro­duce for­eign medicine to the lo­cal mar­ket, and pur­chases are ex­pected to reach $29 mil­lion an­nu­ally.

Ac­cord­ing to Mor­gan Stan­ley, lower-tier cities make up 59 per­cent of China’s nom­i­nal GDP.

The spend­ing power of con­sumers in th­ese cities has been revving up. For ex­am­ple, in the sec­ond quar­ter, the Con­sumer Con­fi­dence In­dex — which partly mea­sures the will­ing­ness to spend — climbed to 116 points in third-tier cities, from 112 in the pre­vi­ous quar­ter, ac­cord­ing to Nielsen, a global per­for­mance man­age­ment com­pany.

Nielsen said it was the most sig­nif­i­cant growth among all cities. In com­par­i­son, the in­dex in first-tier cities re­mained sta­ble at 111.

Maeck Can Yue, founder of Miji, a Ger­many-based man­u­fac­turer of cook­ing ap­pli­ances and sys­tems, said Chi­nese con­sumers liv­ing in lower-tier cities, like those in big­ger cities, show a ten­dency to pur­sue a qual­ity life­style. The com­pany will start to sell some of the new prod­ucts ex­hib­ited at the CIIE on Sun­day, she said.

Ocean King, an Aus­tralian man­u­fac­turer of nu­tri­ents and skin care and honey prod­ucts, made its Chi­nese de­but at the expo and hopes to tap the huge con­sump­tion po­ten­tial of third-tier and lower-tier cities.

“Ma­jor in­ter­na­tional brands have al­ready made a strong pres­ence in ma­jor cities like Bei­jing and Shang­hai, mak­ing it dif­fi­cult for us to pen­e­trate as a late­comer,” said com­pany di­rec­tor Wil­liam Ma.

BI XIAOYANG / XIN­HUA

Lob­sters are dis­played at the China In­ter­na­tional Im­port Expo in Shang­hai on Fri­day.

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