2020
0
China Purchasing Technology Products in Lower Tier Cities Market Report 2020
2021-03-30T04:02:36+01:00
OX990910
3695
136003
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Report
en_GB
“Consumers from lower tier cities have high expectation on the enhancement of qualify of life brought by technology products, especially smart products. When purchasing technology products, they are more willing…

China Purchasing Technology Products in Lower Tier Cities Market Report 2020

£ 3,695 (Excl.Tax)

Report Summary

“Consumers from lower tier cities have high expectation on the enhancement of qualify of life brought by technology products, especially smart products. When purchasing technology products, they are more willing to combine offline product trial with recommendation from KOLs (Key Opinion Leaders), so as to have an in-depth understanding of new technological concepts and to balance the expectations of products at different price ranges rationally. Based on the understanding of the huge gap between products with higher and lower configuration of the same brand, consumers from lower tier cities are more willing to prioritise configuration. With the technology products being highly homogenised, it will be an effective way for brands to differentiate from others by building new O2O experience-oriented stores to improve in-store customer conversion rate, or by enhancing ‘social value’ to increase brand awareness.”
– Yuxi Shao, Research analyst

This Report looks at the following areas:

  • Sources of technology-related information
  • Purchase channels for technology products
  • Needs for choosing technology products
  • Impressions of technology brands
  • Consumption of smart home devices

Table of Contents

  1. Overview

    • Introduction
      • 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
        • Executive Summary

            • Sources of technology-related information: based on recommendation from KOLs and value ‘double check’
              • Figure 4: Impacts of KOLs, by city tier, September 2020
            • Purchase channels for technology products: expect to understand and experience ‘technology value’
              • Figure 5: Purchase channels of large home appliances, by city tier, August 2020
            • Needs for choosing technology products: huge gap between higher-end and lower-end products, while configuration becomes more perceivable
              • Figure 6: Purchase influencers of large home appliances, by city tier, August 2020
            • Impressions of technology brands: the opportunity for brands to make consumers differentiate them from others lies in social value
              • Figure 7: Price acceptance, by city tier, February 2020
            • Consumption of smart home devices: desire quality of life to be improved by technology
              • Figure 8: Purchase drivers of smart home devices, by city tier, September 2020
            • What we think
            • Introduction to Lower Tier Cities in China

              • Population and spending power
                • Spending by tier three or lower cities increases and takes a larger share
                  • Figure 9: City populations and sales, by city tier, end of 2018
                • Per capita disposable income and spending power grows
                  • Figure 10: Per capita salary vs per capita retail sales, by city tier, 2018
                • Spending confidence since the COVID-19 outbreak
                  • Figure 11: GDP sector compositions, by city tier, 2018
                  • Figure 12: Changes in financial status, percentage of respondents claiming they are ‘better off’, by city tier, April-November 2020
                  • Figure 13: Confidence in improving future finances, very confident/somewhat confident, by city tier, April-November 2020
                • Demographic profile/analysis
                  • Gaps between city tiers narrowing in both economic and educational respects
                    • Figure 14: Educational level of surveyed respondents, 2017-June 2020
                    • Figure 15: Car ownership and gym membership, by city tier, 2017-June 2020
                  • Offline experience of technology products
                    • Figure 16: Experience marketing, by city tier, September 2020
                • Sources of Technology-related Information: Base on Recommendation from KOLs and Value ‘Double Check’

                  • What difference does quantitative data suggest?
                    • Following WeChat, short video platforms become another key touchpoint to acquire technology-related information
                      • Figure 17: Platforms of engagement, by city tier, September 2020
                    • Expecting multi-dimensional product interpretation brought by KOLs
                      • Figure 18: Impacts of technology KOLs, by city tier, September 2020
                    • What explanation does qualitative research suggest?
                      • Appealingness only comes with posh professionalism
                        • Figure 19: Interview extracts regarding KOLs’ recommendation approaches
                      • Purchase decision depends on ‘double check’
                        • Figure 20: Interview extracts regarding technology products information sources
                      • What it means for brands?
                        • ‘Mind blowing’ technology concepts can help build innovative brand image
                          • Case study: rollable concept phone launched by OPPO on OPPO INNO DAY
                            • Figure 21: OPPO X 2021 concept phone, 2020
                          • Case study: ‘dog face recognition’ technology shows ‘a sense of technology’ in applicational scenarios
                            • Figure 22: ‘Pet nose recognition’ technology, 2020
                        • Purchase Channels for Technology Products: Expect to Understand and Experience ‘Technology Value’

                          • What difference does quantitative data suggest?
                            • No clear preference in channels, while campaigns and services are drivers
                              • Figure 23: Purchase channels of large home appliances, by city tier, August 2020
                            • Over half of consumers embrace purchasing online after ‘checking’ offline
                              • Figure 24: Online shopping preference, by city tier, March 2020
                            • What explanation does qualitative research suggest?
                              • ‘Highlighting technology value’ is becoming the selling point to drive purchase
                                • Figure 25: Interview extracts regarding offline purchase of technology products
                              • Over expectation might be the reason for ‘high unsatisfactory rate’ of technology products bought online
                                • Figure 26: Interview extracts regarding online purchase of technology products
                              • Offline technology product stores in lower tier cities
                                • Figure 27: Offline technology products stores in Liuzhou and Zhanjiang
                              • What it means for brands?
                                • New O2O experience-oriented stores are becoming effective retailing format to enhance customer conversion rate
                                  • Case study: Tmall Global offline experience store in Qin Cheng Li mall
                                    • Figure 28: ‘Miracle general store’ event held in Tmall Global store in Qin Cheng Li mall, 2020
                                  • Case study: in-depth experience event held by Beijing Hyundai Encino
                                    • Figure 29: Beijing Hyundai Encino Iron Man edition experience area, 2019
                                • Needs for Choosing Technology Products: Huge Gap between Higher-end and Lower-end Products, While Configuration Becomes More Perceivable

                                  • What difference does quantitative data suggest?
                                    • More attention paid to performance and configuration, instead of countries of origin
                                      • Figure 30: Purchase influencers of large home appliances, by city tier, August 2020
                                    • Only smart and multi-functional large home appliances are the ‘premium’ ones
                                      • Figure 31: The concept of premium, by city tier, August 2020
                                    • What explanation does qualitative research suggest?
                                      • Noticeable gap exists between technology products with higher and lower configuration
                                        • Figure 32: Interview extracts regarding purchasing technology products with high configuration
                                      • Prioritise configuration, but less willing to pay extra money for premium brands
                                        • Figure 33: Interview extracts regarding technology products choices
                                      • What it means for brands?
                                        • To cater personalisation demand of ‘trade-off’ and place more focus on product upgrade as well as expansion of connectivity function
                                          • Case study: personalisation of home appliances
                                            • Figure 34: Samsung TV ‘Your choice to customise your fashion’, 2020
                                          • Case study: interactive cross functions between Mi Watch and Nio NextEV
                                            • Figure 35: Xiaomi Mi Watch supporting remote control of vehicles, 2020
                                        • Impressions of Technology Brands: The Opportunity for Brands to Make Consumers Aware of Brands’ Differences from Others Lies in Social Value

                                          • What difference does quantitative data suggest?
                                            • Huawei is leading the smart mobile phone market
                                                • Figure 36: Ownership of smartphones, by city tier, June 2020
                                              • Lower price is no longer the key factor to choose local brands
                                                  • Figure 37: Price acceptance, by city tier, February 2020
                                                • What explanation does qualitative research suggest?
                                                  • An impasse: non-perceptible differentiation among technology products
                                                      • Figure 38: Interview extracts regarding non-perceptible difference among technology products
                                                    • Social identity weights more than brand identity
                                                        • Figure 39: Interview extracts regarding purchasing domestic brand mobile phones
                                                      • What it means for brands?
                                                        • To enhance brands’ ‘social value’ and establish brand identity differentiation from others
                                                          • Case study: OPPO smart TV puts ‘Colourful China’ into the film
                                                              • Figure 40: OPPO ‘Colourful China’ Commercial, 2020
                                                            • Case study: Huawei Cloud’s vision – Charity needs technology; technology needs a warm and cosy environment
                                                                • Figure 41: Huawei Cloud medical healthcare solution, 2020
                                                            • Consumption of Smart Home Devices: Desire Quality of Life to be Improved by Technology

                                                              • What difference does quantitative data suggest?
                                                                • Smart entertainment devices fit the huge consumption demand of at-home leisure
                                                                  • Figure 42: Purchase and interest of smart home devices, by city tier, September 2020
                                                                • Willing to invest more in smart devices to enjoy better quality of life
                                                                  • Figure 43: Purchase drivers of smart home devices, by city tier, September 2020
                                                                • What explanation does qualitative research suggest?
                                                                  • ‘Happiness and touch of fashion’ brought by smart home devices
                                                                    • Figure 44: Interview extracts regarding purchase motivations of smart home devices
                                                                  • Perceptions of technology products: ‘not fully developed’ and ‘not practical’
                                                                    • Figure 45: Interview extracts regarding concerns over smart home devices purchase
                                                                  • Offline smart products experience in Liuzhou
                                                                    • Figure 46: Smart products experience in Liuzhou
                                                                  • What it means for brands?
                                                                    • Leverage ‘complaints’ properly to resonate and reach a tacit agreement with consumers
                                                                      • Case study: Xiaomi smart home products shown in Back to the Field
                                                                        • Figure 47: Xiaomi – The primary partner of Back to the Field, 2020
                                                                      • Case study: BMW X2 – ‘to be the best daily car for grocery shopping’
                                                                        • Figure 48: BMW’s renovation campaign named Turning Sanyuanli into Sanlitun, 2019
                                                                    • Appendix – Abbreviations

                                                                      • Abbreviations

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