Issue link: https://read.dmtmag.com/i/1500748
40 tobaccoasia Issue 3, 2023 May / June Mencius (Mencius (l. 372-289 BCE, also known as Mang-Tze or Mang-Tzu) was a Confucian philosopher during The Warring States Period in China (c. 481-221 BCE) and is considered the greatest after Confucius himself for his interpreta- tion, formulation, and dissemination of Confucian concepts, said, "The people are the way, and those who have permanent property have perseverance, and those who do not have permanent property have no perseverance." This means people with stable incomes and fixed property seek a peaceful living environment, and vice versa. This type of group is often referred to as the middle class in foreign countries, and the "middle-income group" in China. Their consumption ability and new con- cepts have provided many opportunities and mar- kets for the rise of brands. According to national statistical data, the middle-income group in China has reached 400 million, accounting for nearly one-third of the to- tal population and nearly 50% of the total con- sumption proportion. The rapid growth of the group has driven the continuous growth of high- end consumption, becoming the main force of high-end product consumption. The most direct impact they have brought to the cigarette market is twofold. Firstly, they have promoted the increas- ing prosperity of the high-end cigarette market, and secondly, their high demand for products has further promoted the leap of high-end brands in terms of culture and quality. Booming high-end cigarette market In 2022, China's general tier-1 class of cigarettes (retail price at RMB*190-300/carton) continued the good trend of the previous two years, achiev- ing almost double-digit year-on-year growth rate in 2022, providing over 70% of sales and over 60% of growth for tier-1 class cigarettes (retail price above RMB190/carton). Undoubtedly, Chi- nese cigarette consumption has quietly moved up the mainstream price band in the market. The mainstream consumption price range of ciga- rettes has gone through multiple price ranges such as RMB60, RMB100, RMB130, RMB170, and RMB200/carton. Nowadays, cigarettes priced at RMB20/pack have almost become regular con- sumption for smokers, but cigarette prices are Targeting China's Middle-Income Market By TobaccoChina Online China's 400 million- strong middle-income group is the main force driving high-end product consumption. * US$1.00 = RMB7.05