Experiencing China's 'New Normal'
One of the best benefits of the MAM program is the opportunity to travel abroad during Global Network Weeks and immerse yourself in a new culture at a member university. After taking a great interest in emerging markets while earning my MBA at University of Cape Town and working in an emerging economies lab in India conducting research, I set my sights on one of the most fascinating and dominant markets of all: China. China has experienced incredible changes during the past 20 years (just compare a picture of Shanghai from 1995 to one from 2015), and I wanted to experience “The New Normal” firsthand.
The week at Fudan University was full of sessions on various topics, from consumer behavior to economics to the law. This was accompanied by two company visits and a cultural field trip where we tried our hand at learning the surprisingly difficult skill of dumpling-making (I definitely excelled at the consumption part; no issues there).
I was no stranger to the fact that China has rapidly emerging middle and affluent classes with rising consumption power. What I hadn’t realized, though, was what the Chinese were consuming. My first night in Xintiandi, on my walk to the swanky restaurant I was having dinner at, I passed Louis Vuitton, Gucci, et al., and photographers waiting outside the Shanghai Fashion Week venue entrance—this should have been a tip off that the Chinese love luxury.
The new generation has a taste for the finer things in life and has contributed to China’s becoming the largest market for luxury goods in the world. As one professor divulged, the Chinese even have a nickname for these young shoppers: Little Emperors. These Millennial shoppers were brought up in the times of the Family Planning Policy, which restricted families to only one child. This created a family structure we rarely see in North America: two parents and four grandparents to just one child. With all this attention (love those 6:1 odds!), these children were perceived as significantly more demanding than their more modest parents. Now, in their 20s and early 30s, they are demanding products and services that will increase their social status and remind the world just how special they are.
Fundamental shifts such as these are shaping the New China. I came away from my trip having a new perspective on Chinese culture and, in particular, more insight into their evolving consumer behavior. It’s a captivating country, rich with culture and rapid change. I can’t wait to return to this beautiful country and experience more of “The New Normal.”