...But Chinese consumers are different. For one thing, they are poorer

Since the global crisis hit China´s  growth, i have been thinking about the response of consumers patterns that, at least to me, looks odd. Now i see that there isn´t any good reason for expect the behavior of Chinese consumption patterns are equal or even similar to all we know. Consider the fact that they almost don´t use credit cards and saves 30% of their wages. That means that the impact of cutting rates by the Central Bank has much lesser impact that we thought. 

Chasing China's Shoppers Link

Median household income in Chinese cities was about $13,400 in 2010, according to Moody's Analytics, about a quarter the U.S. figure.

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But Chinese consumers are different. For one thing, they are poorer. Median household income in Chinese cities was about $13,400 in 2010, according to Moody's Analytics, about a quarter the U.S. figure

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The Chinese middle class also is at a different stage of development. Many Chinese want appliances and basic TV sets to fill their first apartments. Chinese on average also save more than 30% of household income, vastly more than Americans, and rarely use credit cards. And many Chinese shoppers expect to haggle over prices—a foreign concept for the U.S. company.

Last year, Best Buy shut its China outlets, figuring that opening U.S.-style stores had been a mistake, and focused exclusively on building the Five Star brand.

Five Star targets China's lesser-known cities, where some people are just beginning to develop consumer habits. About 70% of its customers are young families earning around 5,000 yuan, or roughly $800, a month and looking for products that a decade ago only the rich could afford.

The moment a customer starts browsing a big-ticket item, a Five Star sales clerk will offer the shopper cherry tomatoes, a cup of hot water to sip or some time in a massage chair. Later, the clerk will try to persuade the customer to buy the chair.

The chain also offers the services of "solution experts," who help customers sort through the conflicting claims of manufacturers' representatives who work in the stores, where goods are organized by manufacturer, rather than by product.

Five Star's experts give out their telephone numbers so customers can call at any time. The goal is to build a web of loyal shoppers through referrals, borrowing from a Chinese custom of relying on a network of trusted acquaintances for advice.

One Five Star shopping expert, Wang Bo, says he has been invited to a half-dozen customer weddings. "I earn their trust and give them the smile and service of an angel," he says.

Growing sophistication among some Chinese middle-class customers has led Five Star to upgrade in some cities. The Qingdao store has higher-priced electronics than older outlets—for example, cameras and high-definition video equipment for a first voyage overseas or a road trip across China.

Tan Peng and her fiancé, Hou Huimao, have a combined monthly income of 4,000 yuan. On a recent visit to Five Star's Qingdao outlet, they purchased a washing machine, a refrigerator and a flat-screen TV for their new two-bedroom apartment.

On their way out, the 28-year-olds stop to pore over an iPad but decide the time isn't right.

"We have to go to where we can get the best bargains," Ms. Tan says. "After all, we're not in the upper class."

Tan Peng and her fiancé, Hou Huimao, have a combined monthly income of 4,000 yuan. On a recent visit to Five Star's Qingdao outlet, they purchased a washing machine, a refrigerator and a flat-screen TV for their new two-bedroom apartment.

On their way out, the 28-year-olds stop to pore over an iPad but decide the time isn't right.

"We have to go to where we can get the best bargains," Ms. Tan says. "After all, we're not in the upper class."

On their way out, the 28-year-olds stop to pore over an iPad but decide the time isn't right.

"We have to go to where we can get the best bargains," Ms. Tan says. "After all, we're not in the upper class."

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Following its parent's lead, Five Star opened a small research department last year to conduct consumer surveys. When it learned that some customers considered the chain stodgy, Five Star developed a new icon: cartoon characters that appear to be drawn by Hollywood animators.