“Lower-tier cities will be bigger, wealthier, and more eager to spend, and could contribute two-thirds of incremental growth in national private consumption toward 2030,” said Robin Xing, Morgan Stanley’s chief China economist, in a 2017 report. While China’s largest cities have been under the sport for years, now more and more attention is paid to the country’s smaller urban centers. Tier 3 cities are developing at a rapid pace and offering a lot of opportunities for those who act quickly.
This article will give you an overview about smaller urban centers in China, expected to drive China’s Consumption boom for the coming years. Click here for more information about e-commerce development in China.
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China’s fast development continue in small cities
In big Chinese cities such as Shanghai or Hangzhou, e-commerce activities seem to reach the saturation level with delivery courier everywhere and a huge competition between the different e-commerce platforms. Few hundred kilometers away, the courier service is just starting. For Ji Yongtao who left Shenzhen (China’s third-largest economic hub) to go back to his hometown located in Gansu province, the man has to take 10-minute drive to get his online orders from a Taobao Station. This is a brick-and-mortar service center that Alibaba has established nationwide to allow rural residents to buy and sell goods online.
In fact ecommerce groups are scrambling to target small-city and rural consumers. They are actively developing their presence and services, putting goods in the hands of these future consumers. Ji said “When I first moved back, Ecommerce was unheard of here […] But now, villagers are embracing online shopping faster than I thought”.
Chinese migrant workers are driving back home
While they have been for three decades leaving their hometown to go struggle in big cities, nowadays the trend is reversing course. Chinese people saw the ongoing enhancements in small-cities backed by the government and big companies, the soaring city expenses and increasing salaries. This is attracting and leading a lot of migrant workers to return in their hometown.
Migrant workers contributed a lot in the boom of top-tier cities like Beijing, Shanghai and Shenzhen (Bei-Shang-Shen is the shortcut to talk about the largest Chinese cities). The workforce is going to be needed in urban areas.
Beauty of big cities VS opportunities of small cities
Fancy restaurants, high-end coffee, luxury and big shopping malls represent attracting features for a lot of Chinese workers. In another side, wealthy consumers, people the most open and the most willing to pay led a lot of foreign companies and brands to settle their business flooding in these cities.
Actually, most of Chinese metropolitan consumers are accustomed with foreign brands. Nowadays, going in smallest cities may offer more opportunities as the cost of activity will be lower: less rent and more workforce. Also, the fact to be somewhere “unique” among local competitors will give your business a better visibility and attracts consumer’s eyeballs.
Ecommerce is taking off across low-tier cities
Outside of China’s megacities, ecommerce is taking off across low-tier cities – tiny urban enclaves with lesser economic power, political clout, or population – and rural regions, consisting of villages surrounding the small cities.
Besides the ecommerce groups’ support, another that boost this development is because there are no big malls in Lijiang. People don’t have the same range of available items in lower-tier cities, so the e-commerce is a very convenient way. Nowadays, Chinese consumers have a huge appetite for foreign products and e-commerce platforms have become the channels of choices for Chinese shoppers looking to purchase such items.
A 2017 report shows that JD’s average daily orders in Tier 3 and 4 cities are growing 20 percent faster than those in Tier 1 and 2 cities. Between 2012 and 2016, rural disposable income went up by 36.3 percent, compared to 28.6 percent for those living in urban areas.
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We can help you to launch your e-commerce business in China.
To settle on Ecommerce platforms
Among china’s numerous ecommerce platforms, TMALL and JD.com are the most popular. They are well-known to sell authentic products.
Tmall is backed by Alibaba Group, which is one of the most powerful company in China. As we said before for Taobao, big companies are trying actively to cut through the small cities’ market. To be part of its platform can allow you reach these future consumers.
Also, to start a business on e-commerce is better if you want to try customer’s reactions. They are very connected and active online. You can get the review in order to measure your product’s popularity among Chinese consumers.
To increase your brand awareness
The reputation and the word of mouth are very important in China to sell product or services. It is also needed to know Chinese consumer’s behavior and taste as it is different from a city to another. We can connect you with your target consumers and create buzz marketing.
To define your strategy
Our agency offers a complete range of service for e-commerce marketers from e-commerce consulting to digital marketing operations. Chinese small cities represent new territories to conquer and the culture gap remain. Sometimes, you can’t just arrive with an idea, but you have to adapt it to your target consumer and the Chinese market.
GMA is specialized on the digital marketing in China. We have developed many successful e-commerce projects because we know how to effectively promote your e-commerce business in China by using the latest digital tools.
At this stage of development, China has a lot of booming industries. This is a promising and huge market with its own culture and way to function. Want to start a business in China? Do not hesitate to contact us for more information.