2022
0
China Social Life in Lower Tier Cities Market Report 2022
2022-11-01T03:00:50+00:00
OX1104919
3695
157023
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Report
en_GB
“Acquaintances play a crucial role in lower tier cities. Exchanging and sharing information or even resources are important topics for lower tier city consumers to check their relationships and get…

China Social Life in Lower Tier Cities Market Report 2022

£ 3,695 (Excl.Tax)

Description

“Acquaintances play a crucial role in lower tier cities. Exchanging and sharing information or even resources are important topics for lower tier city consumers to check their relationships and get closer with each other. They actively follow what their acquaintances bought on social commerce platforms and seek common experiences through offline group buying to maintain their relationships, which provides a marketing opportunity for brands. To satisfy lower tier city consumers’ demand for socialising, brands can make full use of key occasions including working, WeChat Moments and online shopping festivals. Besides price promotions, brands can pay more attention to socialising. Using innovative interaction to enhance social engagement and trigger a wider spread is a good example. Another example could be easing consumers’ concerns via mimicking real offline shopping experiences with livestreaming. As such, brands can propel interest from lower tier city consumers with fun and high touch, helping them to get rid of bad impressions caused by negative feedback.”

– Gloria Gan, Research Analyst

Key issues covered in this Report:

  • The universality factor in sharing: worth the mention yet not too niche.
  • Find the right timing for sales promotion and beware the taboos: occasions and content are key.
  • Shared membership and group purchase: better encourage more engagement than play with prices.
  • Share trial experiences and feelings: make up for ‘no feelings’ in online information channels with ‘real feelings’ from acquaintances’ recommendations.
  • Learn lessons together: ‘herd immunity’ brought by experience sharing and marketing via negative feedback.

Table of Contents

  1. 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
  2. Executive Summary

    • The market
    • As urbanisation is at mid-latter stage, industrial structure development in lower tier cities faces new challenges and opportunities
      • Figure 4: GDP sector compositions, by city tier, 2018-20
    • COVID-19 outbreaks affect the consumption environment in lower tier cities more severely than tier 1 cities
      • Figure 5: Total retail sales and year-on-year growth rate of consumer goods, by city tier, 2018-20
    • Although outbreak’s immediate impact is limited, lower tier city consumers tend to have conservative consumption behaviours
    • Confidence in financial situation rebounds steadily in lower tier cities, but will be affected by tier 1 and 2 cities indirectly
      • Figure 6: Confidence in improving future finances – very confident/somewhat confident, by city tier, 2020-22
    • The consumer
    • The universality factor in sharing: worth the mention yet not too niche
      • Figure 7: Scenarios of sharing with friends in social situations – interview excerpts, 2022
      • Figure 8: Product information shared with friends in social situations and reasons for making recommendations – interview excerpts, 2022
      • Figure 9: Select attitudes towards advertisements on WeChat Moments, by age, 2021
    • Find the right timing for sales promotion and beware the taboos: occasions and content are key
      • Figure 10: Interest in promotional information – interview excerpts, 2022
      • Figure 11: Reasons for sharing information about sales promotion with families and friends – interview excerpts (negative feedback), 2022
      • Figure 12: Factors to improve shopping experience at the Double 11, by age, 2021
    • Shared membership and group purchase: explore subconscious behaviours of checking and maintaining social relationships
      • Figure 13: Sharing a membership – interview excerpts (positive feedback), 2022
      • Figure 14: Group purchase usage and influence of group purchase on relationships – interview excerpts, 2022
      • Figure 15: Social commerce-related behaviours, by age, 2021
    • Share trial experiences and feelings: make up for ‘no feelings’ in online information channels
      • Figure 16: Sharing shopping experiences – interview excerpts, 2022
      • Figure 17: Influence of shopping experiences shared by friends and online feedback – interview excerpts (positive feedback), 2022
      • Figure 18: Impact of uncertainties on lifestyle – select items, by age, 2022
    • Learn lessons together: expecting ‘herd immunity’ brought by sharing experience
      • Figure 19: Sharing unpleasant shopping experiences with friends – interview excerpts, 2022
      • Figure 20: The influence of unpleasant shopping experiences – interview excerpts, 2022
      • Figure 21: Unfavourable factors towards brands, by age, 2021
    • What we think
  3. Introduction to Lower Tier Cities in China

    • As urbanisation is at mid-latter stage, industrial structure development in lower tier cities faces new challenges and opportunities
      • Figure 22: GDP sector compositions, by city tier, 2018-20
    • COVID-19 outbreaks affect the consumption environment in lower tier cities more severely than tier 1 cities
      • Figure 23: Total retail sales and year-on-year growth rate of consumer goods, by city tier, 2018-20
    • Real income growth slows in lower tier cities
      • Figure 24: Per capita annual salary, by city tier, 2018-20
    • The proportion of single, unmarried people in high income groups in lower tier cities is approaching that of tier 1 cities
      • Figure 25: Family structure of surveyed respondents, by city tier, 2019-22
    • Car ownership and gym membership penetration rates are comparable to those of tier 1 and tier 2 cities
      • Figure 26: Car ownership and gym membership, by city tier, 2017-22
  4. Market Drivers

    • Although the immediate impact of the outbreak is limited, lower tier city consumers tend to have conservative consumption behaviours
      • Figure 27: Impact of COVID-19, by city tier, 2022
      • Figure 28: COVID-related actions in future, by city tier, 2020 vs 2022
    • Confidence in financial situation rebounds steadily in lower tier cities, but will be affected by tier 1 and 2 cities indirectly
      • Figure 29: Confidence in improving future finances – very confident/somewhat confident, by city tier, 2020-22
    • Home appliance category leads trade-up market, while shopping centres are marching into lower tier market
    • Leisure and entertainment market has considerable room for growth, while ‘social economy’ has great potential
      • Figure 30: Ways to de-stress, by city tier, 2022
  5. The Universality Factor in Sharing: Worth the Mention Yet Not Too Niche

    • The office and WeChat Moments are the key scenes where sharing of information takes place
      • Figure 31: Scenarios of sharing with friends in social situations – interview excerpts, 2022
    • Product’s intrinsic quality and universality are the top considerations in sharing
      • Figure 32: Product information shared with friends in social situations and reasons for making recommendations – interview excerpts, 2022
      • Figure 33: Product information sharing with relatives and friends based on their needs – interview excerpts, 2022
    • Sharing brings mutual benefits and recognition
      • Figure 34: Reasons for sharing product information with families and friends – interview excerpts, 2022
    • Those who actively share account for a quarter of all respondents
      • Figure 35: Selected food-and-drink/foodservice-related sharing behaviours, by age, 2021
    • The majority of lower tier city consumers do not react negatively towards advertisements in WeChat Moments
      • Figure 36: Select attitudes towards ads on WeChat Moments, by age, 2021
    • Improved packaging and marketing serves to target consumption scenarios driven by socialising at work
      • Figure 37: Oreo and Chips Ahoy showing in their product introduction consumption scenarios for particular segments, 2022
    • Creative and interactive advertisements in WeChat Moments drives reach beyond the primary audience
      • Figure 38: Interactive ad by Fresh and ad with naked-eye 3D effects by Nongfu Spring on WeChat Moments, 2022
  6. Find the Right Timing for Sales Promotion and Beware the Taboos: Occasions and Content Are Key

    • Large-scale shopping festivals become the best promotion occasions, while joining festival activities together becomes a way of socialising
      • Figure 39: Interest in promotional information – interview excerpts, 2022
    • Consumers concerned about purely promotional information sharing and content should be the key
      • Figure 40: Reasons for sharing information about sales promotion with families and friends – interview excerpts (negative feedback), 2022
    • Hunger marketing more effective in younger consumers
      • Figure 41: Factors to improve shopping experience at Double 11, by age, 2021
    • Co-creation activities more appealing to young people, while environment-protecting or charity activities attract more middle-aged people
      • Figure 42: Interaction with favourite brands, by age, 2021
    • Gamified promotion campaigns can attract interest in socialising
      • Figure 43: Socialising activities and games in the JD.com ‘618 Carnival Shopping Party’, 2021
    • Build a connection with consumers through environmental and charity activities
      • Figure 44: The limited edition Yunnan forest coffee launched by Yong Pu Coffee and Ant Forest in the run-up to the 2021 Double 11 Shopping Festival, 2021
  7. Shared Membership and Group Purchase: Explore Subconscious Behaviours of Checking and Maintaining Social Relationships

    • Sharing a membership with a friend is both a demonstration and a way to check the close relationship
      • Figure 45: Sharing a membership – interview excerpts (positive feedback), 2022
      • Figure 46: Sharing a membership – interview excerpts (other feedback), 2022
    • Shopping experiences in common is more than a topic of conversation and encourages more interaction
      • Figure 47: Group purchase usage and influence of group purchase on relationships – interview excerpts, 2022
    • Young consumers not very responsive to exchanging for gifts with points and cashback on purchases
      • Figure 48: Reasons for getting membership, by age, 2021
    • More than half of young consumers aged 18-39 actively follow what their acquaintances bought
      • Figure 49: Social commerce-related behaviours, by age, 2021
    • Allow friends to join ‘family plans’ to trigger membership trade-up
      • Figure 50: Nintendo Switch’s Family Membership
    • Recommend information or products liked or bought by friends to establish more effective touchpoints
      • Figure 51: WeChat and Taobao’s social interaction functions
  8. Share Trial Experiences and Feelings: Make Up for ‘No Feelings’ in Online Information Channels

    • Experiences shared by humans are more persuasive
      • Figure 52: Sharing shopping experiences – interview excerpts, 2022
    • Sharing by acquaintances can help make up for ‘no feelings’ in online feedback
      • Figure 53: Influence of shopping experiences shared by friends and online feedback – interview excerpts (positive feedback), 2022
      • Figure 54: Influence of shopping experiences shared by friends and online feedback – interview excerpts (other feedback), 2022
    • Offline experiences and recommendations from friends and families help overcome concern of uncertainties
      • Figure 55: Impact of uncertainties on lifestyle – select items, by age, 2022
    • Virtual monitoring in factory livestreaming shows mimics a real offline experience
      • Figure 56: Yili’s ‘Quality Experience Month’ livestreaming event, 2022
  9. Learn Lessons Together: Expecting ‘Herd Immunity’ Brought by Sharing Experience

    • Believe in every lesson learnt, but don’t analyse reasons behind and learn by analogy
      • Figure 57: Sharing unpleasant shopping experiences with friends – interview excerpts, 2022
    • Brands should gain favour among consumers to reverse impressions of negative feedback
      • Figure 58: The influence of unpleasant shopping experiences – interview excerpts, 2022
      • Figure 59: The influence of pleasant or unpleasant shopping experiences (pleasant experiences have a greater influence) – interview excerpts, 2022
    • Younger consumers value professionalism, convenience, advertising and marketing content more
      • Figure 60: Unfavourable factors towards brands, by age, 2021
    • 30-39s lower tier city consumers are least tolerant of negative product/service feedback
      • Figure 61: Selected attitudes towards negative feedback – agree, by age, 2022
    • Confront negative feedback directly to show room for improvement and win consumers’ future expectations
      • Figure 62: NetEase Selected’s marketing campaign – ‘Confronting Negative Feedback Directly’, 2022
    • Reverse marketing: spark curiosity through sarcastic comments
      • Figure 63: Saturnbird Coffee’s marketing campaign – Jia Zhangke making sarcastic comments on Saturnbird Coffee, 2021
  10. Appendix

    • Abbreviations
    • Interviewees’ photos

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