HOME > Growth Strategy > Future Developments: Overseas Operations > Conditions in the shopping center business [Overseas: China and ASEAN economies]
Growth Strategy
Strong economic growth in China has sparked two trends-suburbanization and widespread car ownership. In addition, ASEAN economies are seeing expansion in the number of middle- and upper-income households. These trends together indicate to us that the time is ripe to begin our full-scale entry into the Asian shopping mall market.
China’s nominal GDP growth rate for 2009 dipped briefly below its long-maintained 10% level, reflecting the impact of the global economic recession in 2008. From 1995 to 2010, however, Chinese GDP had been growing at around 10% annually. China’s growth rate, though, is expected to remain high over the medium to long term, with the International Monetary Fund (IMF) forecasting GDP growth of 9% for China over the next five years.
Per capita income levels have risen markedly in China on the back of strong economic growth. There has been a corresponding shift in personal consumption too, with cars now replacing consumer electronics as the biggest consumer durable on household shopping lists. Indeed, demand for cars has been so impressive that in 2009, China overtook the US to become the world’s largest market for automobiles by volume. Forecasts expect China to maintain a level of growth in excess of 10% for the foreseeable future, with car ownership spreading from the affluent coastal regions inwards into the country’s interior
In the ASEAN region, the number of households with a certain amount of purchasing power has expanded steadily since 2000. The percentage of the ASEAN population with over $5,000 in disposable income, the main purchasers of cars and other consumer durables, is now over 50% in Malaysia and Thailand, and is approaching that figure in Indonesia, the Philippines, and Vietnam.
By 2020, the number of people in the ASEAN region with $5,000 in disposable income is estimated to be near 400 million. This figure is double the number present in 2008. By country, Indonesia, which has a huge population, will see this number nearly double from 91 million in 2008 to 180 million in 2020. Meanwhile, Vietnam is projected to see this population more than triple, from 13 million in 2008 to 46 million in 2020.
China’s Nominal GDP and Economic Growth |
Demand for automobiles in China |
Percentage of ASEAN Population with Disposable Income over $5,000 |
Middle and Upper Income Population in the ASEAN Region: Future Trends |