“We should have confidence in the Chinese market,” Ding Lei, founder and CEO of NetEase, a Chinese gaming powerhouse among many other things, told audience while he was delivering a speech at the first China International Import Expo (CIIE) conference.
This year’s economy downward trend has made everyone slightly stressed, said Ding Lei during his speech. He added that the discussions on consumption downgrade never stopped, and that what the market lacks is not money nor the desire to consume, but rather confidence.
There are several reasons why people should have confidence in the Chinese market, he went on to explain.
Externally, the global economy has recovered. Internally, China has always had a good self-adjusting ability. People should believe in the market’s ability to improve.
To Ding, one thing is certain: China will remain the best market in the world for the next decade or longer for a three-pronged reason.
First, China has a huge consumer market made up of numerous consumers who are eager to buy and a wide range of goods options. Brands shouldn’t miss out on this market.
Ding took Chinese consumers’ huge demand for donkey-hide gelatin as an example.
Traditionally used as an ingredient in Chinese medicine, the gelatin made out of donkey skin by soaking and stewing have driven the price of donkey meat to grow by hundreds of times over the past almost two decades. As a result, suppliers have to make the procurement from around the world.
Ding concluded that his point is: “Do not ignore China, or you are ignoring 1.4 billion consumers. No company or brand should make such a mistake.”
Secondly, Chinese consumers have high demands for “new consumption”.
China has a between 200 and 300 million middle-class population, which is still growing. Their huge demands for quality goods requires a steady supply of premium brands from around the world.
Data shows that in the first three quarters of 2018, China’s cosmetics, smart appliances, apparel and other premium products have maintained a relatively high rate of growth. This also proves that Chinese consumers’ enthusiasm hasn’t been deterred by an economic downslide.
On the other hand, compared with countries such as the United States and Japan, China is still in the early stage of its consumption upgrades, meaning that domestic demand is still far from being fully met.
Thirdly, the government’s continuous efforts to boost demand and cross-border e-commerce provide guarantees for the continued development of the Chinese market.
Editor: Elaine Huang & Ben Jiang