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New report reveals vast untapped demand for financial service in China. Could Bitcoin conquer more grounds?
Bitcoin, China, Financial Services
A new Demand Institute's study finds that the demand for expanded access to financial services, which could add an estimated $650bln in Chinese consumer spending over the next 10 years, has been going largely unmet.
The report, A Wealth of Opportunity: Chinese Consumers and Their Shifting Demand for Financial Services, states that there exists an untapped demand among Chinese consumers for household financial services products, including deposit accounts, credit cards and debit cards.
It further elaborates that the evolution of this demand in China would be different to that of other mature markets, citing that China may leapfrog mature economies in the use of electronic payments and may never adopt credit cards at the scale of the United States.
Despite the significant economical developments that have occurred within China, of which has brought hundreds of millions of citizens out of poverty and created a thriving consumer class, of which has made it the second-largest consumer market in the world in aggregate terms over the past several decades, it says consumption still remains a fraction of the level compared to more mature economies on a per-capita basis.
With the estimated $650bln being the most likely scenario and the growth in Chinese financial services likely to add as much as $950bln to Chinese consumption over the next decade, the growing influence of China within the Bitcoin spectrum is going to be much more significant.
Presently China is, presumably, the largest market for the top digital currency and, in coincidence with the findings of the aforementioned report, Bitcoin could be aiming for a more significant ground to expand into. According to Louise Keely, president of The Demand Institute and executive vice president of the global retail vertical at Nielsen, cashless payments can help fill in critical missing knowledge and enable businesses and policymakers to create forward-looking strategies and policies. The population needs more cashless payment solutions to enable online spending and investment products to enable wealth creation.
Nielsen jointly operate the non-advocacy, non-profit organization ‘The Demand Institute’ in conjunction with ‘The Conference Board’.
Other key highlights of the study emphasize that household wealth in China is highly concentrated among urban consumers whom have financial accounts (i.e. credit, savings, checking, etc.), with the top 10% holding nearly two-thirds of assets. In addition, the study found rural, less affluent consumers will drive the growth of entry-level financial services, such as deposit and savings accounts, whilst urban, affluent consumers will drive growth of more complex financial products.It says China-based companies are currently well-positioned to capture the expected growth in financial services demand, including non-financial service companies such as Tencent and Alibaba, which are innovating with online services and investment products. Multinational companies are expected to continue to focus more on existing niches, such as wealth management.
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