China on a Shopping Spree

photo credit: yogma

There was a telling article yesterday in Time Magazine online about China's recent shopping spree around the world. The Chinese government has a wallet bursting full of cash, $2 trillion to be precise, to buy everything from non-branded commodities to flashy branded cars. In the current economic climate, the Chinese state entourage is a welcome sight for country hosts as all are eager to be lavished with some red Maoist money. I find the picture quite ironic, since here back in China it is the foreigner who casually flicks a coin in the pan of the poor Chinese man. Anyway, here's a quick summary of the top 5 recent spends by country:
1. Russia $25billion (loan to state owned oil co.)
2. Brazil $10billion (loan to state owned oil co.)
3. Germany $10billion (incl. $2.2billion worth of BMWs and Mercedes)
4. Great Britain $2billion (incl. 13,000 Jaguars)
5. Spain $320million (incl. gallons of olive oil)

This is a telling sign where the wealth in the world now lies. The spending at government level is reflected also at consumer level where the majority still say they will spend more this year than last - probably the only people in the world to say this right now! However, the nature of goods and brands spent on will differ. There will be more trading down and looking for more value for money, which could mean in some categories, like home appliances and household daily items, people will switch to reputable brands that offer a more competitive price. However, in times of recession, people do still need the little luxuries in life, so sales of beauty products are expected to continue to prosper, but consumers will be more discerning, which means it is imperitave to get all your marketing and communications right...relying more and more on effective in store which can help drive your bottom line up.