Month: March 2012

Trade Between China and North Korea Dramatically Increases

In a fascinating turn of events, North Korea is taking notes from China and starting to create megamarts like Walmart.  Pyongyang will soon have a superstore like Walmart.  The new consumer approach in North Korea is part of an official campaign that they launched three years ago to build up their economy – and to change the image of their leader Kim Jong Un.

The Kwangbok area supermarket in downtown Pyongyang is the first of these examples.  Consumers there can get everything from Minnie Mouse pajamas to popcorn to frying pans.  As shopper Pak So Jong said, "It is very good to come to this shop and buy goods which I like by feeling them and looking over them myself."

The Chinese has been introducing these cheap goods to a small niche market in Northern Korea in the country’s border regions.  Time will tell if it will take off, and if this will be a brilliant economic move for China.

Trade between China and North Korea has been booming for the last few years.  In 2010, North Korea did $3.5 billion in trade with China, which was a 30% increase from the year before. That figure increased to $5.1 billion in the first 11 months of 2011, a 70% increase from 2010.

China: The “Last Untapped Market on Earth”

China consumer spending is on the rise, and it’s showing that China can be a powerhouse for companies selling a vast range of products.  At the Central Economic Work Conference in December, policymakers said that they will "increase the proportion of the middle class" in 2012 and that this will transform the country from one where products are made to one where they are purchased.

Retail sales rose 17% from January through November of 2011.  President Hu Jintao is hoping that retail sales will increase by more than 15% annually over the coming five years and that they will get to 32 trillion yuan by 2015.

In addition, by 2015, China may actually beat out Japan as the world’s center for luxury market goods, according to research that was released by McKinsey & Company.

And companies are starting to follow suit. Apple Inc. recently changed its line that says, “Designed din California, Made in China” to say “Designed in California, Made for China” for its new Shanghai store.

Tesco China, the UK-based grocery and merchandising retailer has more than 100 outlets in China.  Their corporate affairs senior vice president Lu Haiqing said, that China is the "last untapped market on Earth."