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China Living in Lower Tier Cities Market Report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Living in Lower Tier Cities market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

China’s economic growth slowed to 6.6% in 2018, the weakest since 1990. Retail sales growth in 2018 also fell to 9.0% from 10.2% in 2017. As opportunities to grow in top tier cities become more limited due to fiercer competition, more attention is being paid to markets in rising lower tier cities. With less pressure from living costs and incentives driven by urbanisation and modernisation, consumers in lower tier cities are ready to upgrade their consumption.

This report, incorporating market and consumer observations, looks at different aspects to explore opportunities by understanding the values and expectations of consumers which influence their consumer decision making about consumption of products and services.

Expert analysis from a specialist in the field

Written by Keiyou Wang, a leading analyst in the Lifestyles sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Gaps between tier one and lower tier cities are narrowing both in educational and economic respects. Consumers in lower tier cities show a strong willingness to pursue the latest trends, driven by the fast spread of information, but have less products and services available to them compared to those in tier one cities. They enjoy shopping as a leisure activity and expect it to be more entertaining, both online and offline Keiyou Wang
Category Director

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Table of contents

  1. Overview

    • Introduction
      • Objective and Methodology
        • Quantitative Research Methodology
          • Figure 1: Sampling of survey
        • Qualitative Research Methodology
          • Figure 2: List of fieldwork cities in all qualitative research data used in this report
          • Figure 3: Interviewing cities in qualitative research
          • Figure 4: Interview respondent quota in qualitative research 
          • Figure 5: Images of households of interviewees for this report (eg Xinyang city)
      • Executive Summary

          • The market
            • Figure 6: Urbanisation in China, 2019
          • The consumer
            • Gaps between city tiers narrowing in both economic and educational respects
              • Figure 7: Car ownership, overseas travel experience and gym membership, by city tier, 2017-2019
            • Weak brand association in brand perception
              • Figure 8: Brand perception - % agree, by city tier, March 2019
            • Attitudes towards trendy products and fear of missing out
              • Figure 9: Attitudes towards super sales in snacks, by city tier, January 2019
            • Stronger demand for ‘retailtainment’ in shopping
              • Figure 10: Attitudes towards online shopping festivals, by city tier, January 2019
              • Figure 11: Demand for entertainment in online/offline shopping, by city tier, August 2018
            • Service solutions and ‘buy product, get service’ model
              • Figure 12: Consideration when choosing breakfast services, by city, June 2019
            • Digital engagement and gamified e-learning
              • Figure 13: Paying for knowledge payment content, by city tier, August 2018
            • Sense of social connection and shared interests
              • Figure 14: Experience with social commerce, by city tier, February 2019
            • What we think
            • Market Background

              • Continuous urbanisation sees over 50 million people go from rural to urban since 2011
                • Figure 15: Total population and rate of urbanisation in China, 2011-19
              • Adapting to challenges in their own way
                • Faster income growth and lower housing costs drive consumption power in lower tier
                  • Figure 16: Top 20 cities by per capita disposable income, 2018
                • Expanding accessibility of information and products
                • Consumer Profile Overview

                  • Gaps between tier one and lower tier cities are narrowing in both educational and economic respects
                      • Figure 17: Educational level of surveyed respondents, 2017-2019
                      • Figure 18: Car ownership, overseas travel experience and gym membership, by city tier, 2017-2019
                    • Self-employment rate rises and conservative prospects for financial improvement
                      • Figure 19: Type of employment, by city tier, 2017-2019
                      • Figure 20: Confidence in improving financial situation over the next 12 months, 2017-2019
                  • Weak Brand Association in Brand Perception

                    • What differences does quantitative data reveal?
                      • Figure 21: Brand perception, % agree, by city tier, March 2019
                      • Figure 22: Brand perception – “a brand is an indicator of quality”,% agree, by city, March 2019
                    • What explanation does qualitative research suggest?
                      • What it means for brands
                      • Attitudes towards Trendy Products and Fear of Missing Out

                        • What differences does quantitative data reveal?
                          • Figure 23: Attitudes towards super sales in snacks, by city tier, January 2019
                          • Figure 24: Attitudes towards super sales in snacks, by city, January 2019
                        • What explanation does qualitative research suggest?
                          • What it means for brands
                          • Stronger Demand for ‘Retailtainment’ in Shopping

                            • What differences does quantitative data reveal?
                              • Figure 25: Attitudes towards online shopping festivals, by city tier, January 2019
                              • Figure 26: Attitudes towards online shopping festivals, by city, January 2019
                              • Figure 27: Demands on entertaining towards online/offline shopping, by city tier, August 2018
                              • Figure 28: Demand for entertainment in online/offline shopping, by city tier, August 2018
                            • What explanation does qualitative research suggest?
                              • What it means for brands
                              • Service Solutions & Buy-Product-Get-Service Model

                                • What differences does quantitative data reveal?
                                  • Figure 29: Considerations when choosing breakfast services, by city tier, June 2019
                                  • Figure 30: Considerations when choosing breakfast services, by city, June 2019
                                • What explanation does qualitative research suggest?
                                  • What it means for brands
                                  • Digital Engagement and Gamified e-Learning

                                    • What differences does quantitative data reveal?
                                      • Figure 31: Paying for digital content, by city tier, August 2018
                                      • Figure 32: Paying for knowledge payment content, by city tier, August 2018
                                      • Figure 33: Paying for digital content, by city, August 2018
                                      • Figure 34: Paying for knowledge payment content, by city tier, August 2018
                                    • What explanation does qualitative research suggest?
                                      • What it means for brands
                                      • Sense of Social Connection and Shared Interests

                                        • What differences does quantitative data reveal?
                                          • Figure 35: Experience with social commerce, by city tier, February 2019
                                          • Figure 36: Social commerce, by city, February 2019
                                          • Figure 37: Reasons to purchase products recommended by public accounts/online bloggers, by city tier, August 2019
                                        • What explanation does qualitative research suggest?
                                          • What it means for brands
                                          • Appendix – Abbreviations

                                            • Abbreviations