China Car Owners in Lower Tier Cities Consumer Report 2023
"Smart cars and new energy vehicles are better known and more accepted by lower tier city consumers than ever before.
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Overview
- What you need to know
- Key issues covered in this Report
- Objective and methodology
- Quantitative research methodology
- Figure 1: The sample structure for each city is as follows:
- Qualitative research methodology
- Figure 2: Interviewed cities in the qualitative research
- Figure 3: Profiles of respondents to the qualitative research
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Executive Summary
- The market
- Demands for sustainable development and differentiation emerge
- Figure 4: GDP sector compositions, by city tier, 2019-21
- Salary growth slows, and consumption momentum weakens
- Figure 5: Per capita annual salary, by city tier, 2019-21
- Figure 6: Total retail sales and year-on-year growth rate of consumer goods, by city tier, 2019-21
- Financial confidence continues to fluctuate
- Figure 7: Confidence in improving future finances, by city tier, 2020-23
- Regional governments started to launch policies about charging pile installation
- The consumer
- Reference Value and Demand for Scenarios in Automotive Marketing Videos
- Figure 8: Interest in different content formats – increased, by age, 2023
- The necessity of intelligent features and in-car systems
- Figure 9: Reasons for going over budget, by age, 2022
- Purchase and consideration factors of auto accessories and maintenance/repair products
- Figure 10: Information channels, by age, 2023
- The importance of appearance and energy type
- Figure 11: Interested designs, by age, 2022
- What we think
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Introduction to Lower Tier Cities in China
- Demands for sustainable development and differentiation emerge
- Figure 12: GDP sector compositions, by city tier, 2019-21
- Salary growth slows, and consumption momentum weakens
- Figure 13: Per capita annual salary, by city tier, 2019-21
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- Figure 14: Total retail sales and year-on-year growth rate of consumer goods, by city tier, 2019-21
- The pull effect of the metropolitan economy is expected
- Figure 15: Total domestic highway mileage, by city tier, 2020 and 2021
- The increase in flexible employment and work-on-the-go brings new opportunities for the development of low tier cities
- Figure 16: Type of employment, by city tier, 2020-23
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- Figure 17: Company types, by city tier, 2020-23
- Demands for sustainable development and differentiation emerge
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Market Factors
- Financial confidence continues to fluctuate
- Figure 18: Confidence in improving future finances, by city tier, 2020-23
- Upgrading demand has declined and high-end consumption become more cautious
- Figure 19: Trading up and down, tier 3 or lower cities, Q1 2022 vs Q1 2023
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- Figure 20: Trading up and down, tier 3 or lower cities, Q1 2022 vs Q1 2023
- Chain service brands tap into lower tier cities, driving the innovation and quality improvement of consumer experience
- Figure 21: Changes in the number of stores of Helen’s, Miniso and Haidilao in different cities, by city tier, 2021 vs 2022
- Figure 22: Convenience store shopping frequency – once a day or more, by city tier, 2019 vs 2023
- The influence of short videos has expanded, accelerating the conversion of traffic value to user value
- Figure 23: Changes in short video usage – every day, by city tier, H1 2021-H1 2023
- Domestic travel is recovering strongly, and the combination of local cultural tourism resources and commerce has attracted attention
- Figure 24: Mentions and engagement of ‘Zibo’(淄博) on social media channels, January-June 2023
- Regional governments started to launch policies about charging pile installation
- Financial confidence continues to fluctuate
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Interviews with Industry Experts
- Leverage the value-for-money advantage of small town model through store, equipment and menu adjustment
- Figure 25: Expert interviewees’ take on lower tier city market and consumer perceptions, 2023
- Focus on household consumption habits and the construction of logistics networks
- Figure 26: Expert interviewees’ take on lower tier city market and consumer perceptions, 2023
- Initiate conversations on consumption scenarios integrating regional features
- Figure 27: Expert interviewees’ take on consumption scenarios and marketing methods in lower tier city, 2023
- Explore ‘down-to-earth’ communication methods and channels
- Figure 28: Expert interviewees’ take on lower tier city market and consumer perceptions, 2023
- Leverage the value-for-money advantage of small town model through store, equipment and menu adjustment
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Reference Value and Demand for Scenarios in Automotive Marketing Videos
- Highlighting the neutrality and objectivity of video marketing is the key
- Figure 29: Interest in different content formats – interview excerpts, 2023
- Effective use of scenario-based customisation and precise targeting
- Figure 30: Car purchase consideration factors – interview excerpts, 2023
- Middle-aged lower tier city car owners in their 30s are more interested in creative content
- Figure 31: Interest in different content formats – increased, by age, 2023
- Expectations for car usage data combined with lifestyle services are similar across age groups
- Figure 32: Attitudes towards car purchase, by age, 2023
- Invite KOLs to boost impact of videos with objective and unbiased content
- Figure 33: Geely Auto’s livestreaming marketing campaign on Douyin, 2021
- Livestreaming group buying enhances regional influence and accelerates conversion in private domain
- Figure 34: Chery New Energy & Dcar livestreaming group buying event for their followers, 2022
- Highlighting the neutrality and objectivity of video marketing is the key
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The Necessity of Intelligent Features and In-car Systems
- Even if you don’t need the assisted driving function, you can still buy peace of mind by having it
- Figure 35: Assisted driving and mobile phone remote control functions – interview excerpts, 2023
- Intelligent upgrade of in-car systems is an urgent task
- Figure 36: In-car systems – interview excerpts, 2023
- 70% of lower tier city young car owners go over budget when buying a car
- Figure 37: Reasons for going over budget, by age, 2022
- The mobile phone remote control function has become very commonly used among young car owners in lower tier cities
- Figure 38: Interest in mobile phone connectivity functions – usage, by age, 2022
- Cross-category co-branding with tech IPs to leave an impression of intelligence to users
- Figure 39: Changan Automobile X The Three-Body Problem, 2023
- Even if you don’t need the assisted driving function, you can still buy peace of mind by having it
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Purchase and Consideration Factors of Auto Accessories and Maintenance/Repair Products
- An emerging trend of users solving minor problems by themselves
- Figure 40: Choices of aftersales channels – interview excerpts，2022
- Opportunities exist for peripheral products for multiple scenarios such as camping
- Figure 41: Car accessories – interview excerpts, 2022
- A higher proportion of lower tier city car owners aged 30-39 rely on automotive specialised platforms for automotive information
- Figure 42: Information channels, by age, 2023
- By promoting the use of car care apps, users’ stickiness can be effectively improved
- Figure 43: Interested in products on car care apps, by age, 2022
- Cross-category co-branding is not just about products, but more about sharing similar features in brand images
- Figure 44: Co-branding between Tesla and Helena Rubinstein，2023
- Generate hot topics among young people through cross-category peripheral products
- Figure 45: ‘Pengke (Punk) regimen’ peripheral products, 2023
- An emerging trend of users solving minor problems by themselves
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The Importance of Appearances and Energy Types
- High-tech tone of streamlined shape and entertainment equipment can better demonstrate car appearances
- Figure 46: Configuration upgrades – interview excerpts, 2022
- Lower tier city consumers still lack the opportunity to try out NEVs
- Figure 47: Willingness to buy NEVs – interview excerpts, 2023
- Young car owners aged 18-29 are particularly attracted to a large panoramic sunroof
- Figure 48: Interested designs, by age, 2022
- Comfort-seeking older car owners are more interested in NEVs’ range and air-conditioning performance in winter
- Figure 49: Satisfaction with NEVs – strongly satisfied and satisfied, by age, 2023
- Collaborate with hipster KOLs to reach young consumers through differentiated car appearances
- Figure 50: Geometry E trendy car spokespeople, 2022
- Promote NEVs through the advantages of NEVs’ in-car environment
- Figure 51: Arcfox Alpha, 2023
- High-tech tone of streamlined shape and entertainment equipment can better demonstrate car appearances
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Appendix
- Interviewees’ photos
“Smart cars and new energy vehicles are better known and more accepted by lower tier city consumers than ever before. In terms of car purchase consideration factors, in addition to practical value, functional configurations that are not frequently used but can bring a sense of reassurance as well as appearances and emotional value achieved by sensory-related designs are increasingly appreciated. Neutral and objective marketing content as well as diverse car usage scenarios are effective ways to win consumers’ favour towards brands. In terms of digital marketing, brands can target different audiences through the display of customised scenarios, so as to precisely hit the pain points of segmented audiences and enhance marketing conversion.”
– Austin Yuan, Research analyst
Key issues covered in this Report
- Marketing forms: reference value and demand for scenarios in automotive marketing videos.
- Smart technology: the necessity of intelligent features and in-car systems.
- Car owners’ lifestyles: purchase and consideration factors of auto accessories and maintenance/repair products.
- Appearances and technology: high-tech tone of streamlined shape and entertainment equipment can better demonstrate car appearances.
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