BEIJING: The next wave of consumer expenditure on brands in China will come from Tier 3 and Tier 4 cities in which consumption by women will be a key factor, says a new study.
MEC, the media agency, argues that T3&4 cities, which are at a different stage of development and not at all like the increasingly saturated T1&2 connurbations, offer huge potential and constitute important strategic markets.
Its report – Spectacular: Women in China's Tier 3 & 4 Markets – provides a view of women's life values, attitudes towards consumption and media habits in these lower-tier centres.
"Women in T3&4 cities have come to represent very significant spending power and consumer demand," said Christian Guinot, President, MEC China.
The report found that they are still at the initial stage of brand consumption, however, and while they are showing greater awareness of international brands, it is the domestic ones that continue to command their preferences.
As many top-tier brands may not have a physical presence in T3&4 cities, e-commerce has become increasingly important. Between 2009 and 2011, online spending by women in these cities increased 146% to 1,757 yuan, almost as much as their counterparts in T1&2 cities.
A significant difference from women in T3&4 cities is that they prefer their ads to be simple and straightforward in content and execution, while those in T1&2 cities like creative approaches.
Those in smaller centres are also more prone to impulse buying, with 36% likely to indulge themselves compared to 28% in Tier 1 cities.
MEC has also produced five characterisations of these women as consumers, based on attitudes to life, consumption patterns and media habits: the Practical Woman, the Traditional Woman, the Pressure Cooker, the Undecided and the Achiever.
Data sourced from MEC Global; additional content by Warc staff