What will Make China’s Economy Continue to Grow Up To 2050
China’s economy would continue to grow extensively up to 2050 because the countries decided to embrace technology by inventing new things (World Bank, 2019). Through the efforts by the government to increase the purchasing power of the people, the country attracts foreign investors who contribute to the growth of the country’s economy. The purchasing power of the people has increased over the years—most of the consumers in China are shifting their tastes to virtual products. Investors are attracted to the Chinese markets because the consumers have increased consumer purchasing power, creating a demand for foreign goods (Frank, 2017). The low production cost achieved by international companies in China increases their efficiency in China’s market. China’s growth can be attributed to the foreign investment in the country.
However, foreign companies have declined in investing in China because of the consumers’ cultural solid grounds, making it challenging for them to operate. The country is also facing a demographic challenge. The country was affected by the one-child policy, which has contributed to the slow birth rate. Despite a change in the policy, China continues to face the challenge of the population (World Bank, 2019). People also find it hard to have many children because of the high living costs such as housing and education. These challenges have forced the country to look for other strategies to promote its economy, such as innovation.
Through the continued rise of invention in the country, China will manage to promote the sustainability of its economy by driving development (World Bank, 2019). The country has invested heavily in innovation through research. The government has also increased its exports which contribute significantly to building the country’s economy. The country has heavily invested in exporting innovative technological products which have a high demand in the market. Thus, China’s strategy will help it promote economic growth and increase the middle and upper-income earners in the country by 2050.
How China’s Growth will Influence Best-Buy Performance in China
If the country’s purchasing power increases from $17million to $200 million by 2020, it means that Best Buy can continue to be operational by maintaining a share of the Chinese market. The company’s strategy would still be applicable when the purchasing power increases through the middle and upper income-earning citizens. Best Buy can prevent the challenges it faced in the past, such as cultural shock. Bets Buy needs to understand the needs of the Chinese consumers by embracing the brands they like and prefer, such as the Apple brand. It will increase the people’s consumption of their products. By embracing famous brands like Apple, Best Buy would effectively meet the demands of the Chinese markets by selling to them what they need. Most of the Apple brand products are sold at high prices. Since the purchasing power of the customers will increase their consumption of these product’s sold by Best Buy.
Best Buy needs to understand the culture of the Chinese customers to enable it effectively in Chinese markets. Cultural observation will help the company know the marketing trends and understand how they can meet the needs of its customers. The company would also create unique products that would make it easy to sell in the market instead of selling products easily pirated by the Chinese people. Pirated products in the market create a highly competitive environment for Best Buy. It makes the customers prefer to buy affordable pirated products from its competitors. The scenario faced by Best Buy entry into the Chinese market will be different when they decide to understand the culture of the Chinese people. The company will operate profitably because it would meet the needs of its market since its purchasing power is also high. Thus, the Chinese customers would manage to buy the product’s from Best Buy in the 2020s when the company fully understands the cultural aspect of the Chinese.
Western-Based Online Shopping
Alibaba has created a competitive environment for business such as e-Bay which deal in online shopping. Alibaba’s ownership of Tmall and Taobao has made the company more interactive with its customers by providing instant communication services not available on eBay. The platforms created by Alibaba have shaped the Chinese’s buying culture by increasing their shopping ativities into online shopping, which is a culture of the Western people. eBay has found it challenging to survive in the Chinese market because its focus was mainly on providing online purchasing services for its customers. It failed to understand the need to establish communication platforms to make it easy for the company to communicate with its customers. Through Alibaba’s creative idea, the business provides services that eBay failed to identify and solve. Alibaba’s Tmall and Taobao platforms have increased 80% of the Chinese consumer’s for online products. eBay will improve its performance by integrating the instant messaging services in their system like Alibaba.
The Western online based shopping activities will increase in the Chinese market because companies such as Alibaba are creating new technology system that attracts customers to online shopping. The Western online-based shopping system will infiltrate the Chinese markets because of their culture of online shopping. eBay will increase its performance if it incorporates instant messaging services in its business because the Chinese people are moving towards a new trend in shopping online. The built-in system of instant messages creates a solution to the challenges foreign companies face to penetrate progress in the Chinese market. The minor difficulties faced by foreign companies in the Chinese market, such as cultural shock, needs to be analyzed to enable the companies to operate effectively in the Chinese markets.
References
Frank L. ( 2017). “China Marketing: Five Keys for a Crowded Market,” Forbes.
World Bank. (2019). Innovative China: New Drivers of Growth. https://documents1.worldbank.org/curated/en/833871568732137448/pdf/Innovative-China-New-Drivers-of-Growth.pdf
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