China's Growing Middle Class Drives Demand For Higher-Quality Products

Premiumization, or the demand for better and more expensive variants of products, is growing in China, according to several market and consumer studies. Premiumization is a major factor driving the growth of major FMCG products in China, according to the latest retail and consumer confidence data from market research firm Nielsen. In 2012, for example, sales of premium products contributed as much as 55 percent of overall sales growth for products, such as toothpaste and biscuits, and almost 50 percent of sales of moisturizers and milk. China’s middle class is expanding, and along with it grows consumers’ spending power. Also, the country’s upper middle class is forecast to grow from 12 percent of the total urban population to more than 50 percent.