Uncovering insights on China's lower-tier cities

While there is plenty of research and attention placed on China's higher-tier cities, such as Beijing, Shanghai, Guangzhou and Shenzhen, less is understood about the nuances of lower-tier cities and how brands can tailor their plans to accomodate them.

Edge, the technology, data and insight team of Publicis Groupe, has compiled a report that uncovers a new perspective on consumers in Chinese lower tier cities by intersecting lifestyle outlooks with economic ability. 

As early as 2015, researchers predicted that lines between tiers are blurring, and this is becoming more relevant now.

In this report, titled “Yangtze Reclassified: A Fresh Perspective on Chinese Cities”, it is not just income levels and tier numbers that define the cities.

Take Huzhou (Zhejiang province) and Suqian (Jiangsu province) as examples. They have huge differences in terms of culture, economy and development. Though they are both considered tier 3 cities, their disposable income differs by 50%. In the new report, Huzhou is categorised as a city of "lifestyle indulgers" while Suqian is a typical city of "everyday traditionalists".

Based on quarterly-updated data from PacePanel, a Publicis proprietary platform, the study covers 298 cities and over 94,000 samples in China.

The study is intended to help brands reassess how they view city planning in China, and how they can tailor their marketing and communications strategies to the nuances of lower-tier cities and the different motivations of consumers.

Yangtze 2.0 divides consumers in lower-tier cities into the following four main groups. The report predicts that lower tier "lifestyle indulgers" and "future upstarters" are growth powerhouses.

'Lifestyle indulgers'

"Lifestyle indulgers" account for 16% of the population in lower-tier cities and are mainly located in the coastal provinces of the East. There are 35 cities mentioned in the report, represented by Huzhou.

This group cares about enjoyment (culture, food, or fashion) and a life well-lived. Brands should convince "lifestyle indulgers" to optimise their lives, creating exciting experiences or bolstering their social status.

'Future upstarters'

"Future upstarters" account for 40% of the population in lower-tier cities and are mainly located in the non-coastal provinces inside the territory. There are 83 cities mentioned in the report, represented by Huanggang. They are the group with the largest consumer base among lower tiers. They care about a better future and an upgrade to their social, educational, or financial statuses. Influencers have a huge impact on them as they are trend followers.

'Community connectors'

"Community connectors" account for 8% of the population in lower-tier cities and are mainly located in the north of the country. There are 26 cities mentioned in the report, represented by Urumqi. Family and community are the focus of this group. Word-of-mouth marketing from their network trumps all, but a strong and reliable brand goes far.

'Everyday traditionalists'

"Everyday traditionalists" account for 36% of the population in lower-tier cities and are widely distributed in noncoastal cities. There are 105 cities mentioned in the report, represented by Suqian. They are the most conservative and traditional group. They look for the small joys in life. They have short-term goals and are risk-averse. They tend to seek value for money from brands and rely on experts to help them make the right choice when buying products.