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A resident enters an Oppo smartphone shop in Pinghai, a small town in China's Guangdong Province. 
Cover Story

China's villagers get a taste for Gucci

Rural spending rises even as city dwellers tighten their purse strings

HONG KONG -- It would be hard to guess Zhang Jianchang's profession from his spending habits. He is a big fan of Gucci. He drives an SUV worth $43,000. And after enjoying his first overseas trip to South Korea in 2015, Zhang made up his mind to travel abroad again -- this time, his destination was Osaka, Japan.

But Zhang is not a white-collar worker in one of China's big cities; he is a shrimp farmer in Pinghai, a small town in the southeastern Chinese province of Guangdong.

"Life in the Chinese countryside has improved significantly," Zhang said. His possessions say it all. Zhang has a brand-new Huawei smartphone and drives a black Kia Motors SUV that he bought four years ago.

"We used to think that having a car was a symbol of the superrich. But now almost every family here owns a car," Zhang told the Nikkei Asian Review. In fact, the increase in vehicles has caused a problem. "Every time I go home from work, I'm afraid I won't find a parking spot," Zhang said.

Once synonymous with poverty, Chinese villagers are now becoming a driving force of consumption. In the first nine months of this year, retail sales in rural China increased 10.4% year over year to reach 3.96 trillion yuan ($570 billion), according to government statistics, a trend helped by the spread of logistics networks to more remote corners of the country.

The rising purchasing power of Chinese villagers has also turned the heads of domestic retail giants, especially given the signs of sluggish growth in urban spending. JD.com, the country's e-commerce heavyweight, for example, announced that it will open 1 million convenience stores by 2021, half of them in the countryside.

The market potential is clear in Pinghai, where household spending has rocketed in recent years in line with a boom in tourism. Its farmland was once used to grow rice, but now new village houses are sprouting up. Posters advertising Chinese smartphone brands flap in the breeze, and a river of cars -- including Land Rovers -- flows rapidly along the narrow country roads.

Zhang Shunhua is among those who have witnessed the change. The 34-year-old farmer in Shiqiaokou, a village in the Pinghai township, used to sell agricultural products to wholesalers, but now she runs a more lucrative business. For a fee, Zhang welcomes urban dwellers to experience rural life at her farm, picking grapes and cooking outdoors. Thanks to the higher income brought by tourists, Zhang and her family will soon move into their new home -- a Rococo-style villa with 11 bedrooms.

"We have money now, and we want to enjoy life"

Zhang Jianchang, a shrimp farmer in Guangdong Province

Even those with lower incomes seem to be spending more. One case in point is Zhong Peicheng, a construction worker who bought his first-ever smartphone, which has changed how he spends money. The 57-year-old paid about 2,000 yuan -- five times his daily wage -- for a Huawei smartphone in 2016, allowing him to take advantage of the convenience of mobile payments and enjoy free video calls with his son via messaging apps.

For Zhang, the shrimp farmer, purchasing choices are not only about convenience but also social status. With the help of soaring shrimp prices and generous government subsidies on agricultural production, Zhang is developing a taste for what he calls a "luxury life." The 48-year-old frequently travels to Hong Kong for shopping and has come back from previous visits with Gucci handbags and leather belts.

"We have money now, and we want to enjoy life," Zhang said.

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