Thinking about China Market Size

China market is attractive to many global industry leaders. However, during my internship, it became clear that not all customers in different regions can afford quality goods and services. So why is China market attractive to those multi-national companies? For example, the customers we visited in Beijing and Shanghai have a higher disposable income level, and the demand for high quality goods is strong, even the foreign brand products are expensive considering the costly R & D expense and all taxes during the import. We saw that the products purchased every day by the customers are in the mainstream catalog in the US market, keeping pace with the global technology update. Although it is still rare to observe cutting-edge products here, it is understandable considering those new technologies did not originate in local markets and the adoption will take some time. However, China market is huge and definitely segmented. When we visited the Tire 2 cities, things changed. The popular products are often one generation or two older. The customers are quite price-sensitive. The distributors are seeking not the best products, but cheap ones that can just do the same job. From our observation, it can be concluded that there are three types of markets co-existing in China. One is high-end, one is middle-end and the last is low-end. With a big population and great difference of social development between regions, business people can find in China market similar to developed countries, market of medium profit potentials and market of poor countries. Although only high-end market in Tier 1 cities are the targets for global players and they already penetrated these market quite well, the growing medium market is quite attractive to them as well. They can develop medium quality products with better price to explore the market now, and also build brand names and roll out high quality products when this market matures in the future. This promising medium market of high volume should be the shining point that attracts global companies.