Consumers in upper and lower tier cities have more in common than marketers think, reveals latest Synovate Media Atlas China research
2 September 2010
CHINA — Leading global market research firm Synovate today released the latest findings from Media Atlas China, the most comprehensive syndicated study conducted in China to date surveying 68,000 consumers per annum across 66 cities and rural areas in mainland China. The latest results, which is based on the study of 32,922 consumers in the past 7 months, show that consumers in lower tier cities are more similar to top tier cities than many marketers think. From lifestyle choices to spending behaviour across a variety of product categories, this similarity in behaviour reveals opportunities for marketers to expand their marketing model and tap into lower tier markets as a growth frontier.
Steve Garton, Executive Director of Media at Synovate, comments: "All Chinese consumers are going through changes in their consumption behavior, media use and motives for spending –whilst sharing core Chinese values. Marketers need to appreciate how development is shifting consumption, whilst respecting traditional pillars which bond people together. It is critical for today's international and domestic marketers to understand people's minds in order to win the hearts and wallets of this massive population of consumers."
Synovate Media Atlas China is an in-depth study covering urban cities and rural areas in China, enabling analysis across geographies and consumer targets to define untapped opportunities for marketers, media specialists and media owners.
Similarity on consumption behavior between China's modern cities and rural areas
The latest Synovate Media Atlas China findings show that China's modern cities and rural areas share similarities in terms of daily expenditure, from products such as nutritional supplementary and apparel, to services such as entertainment and health & fitness.
For example, the average annual spending on apparel by Chinese consumers living in Tier 5 cities is RMB 3,600, compared to RMB 3,900 by consumers in Tier 3 cities, RMB 3,300 in Tier 2, and RMB 3,900 in Tier 1 markets.
Annual spending on health and fitness are also similar between top tiers and lower tiers markets. On average, consumers in Tier 5 cities spend RMB 2,700 per year on this, compared to consumers in Tier 1 cities who are spending just RMB 300 more.
"Some spending habits are shaped by traditional culture, which has been rooted in China for almost five thousand years. Good nutrition and keeping good health take high priority in daily life, and do not vary much across income level or overall living standard," comments Jessica Liu, Media Research Director in Synovate China.
Please see Figure 1 for further information on average spending per year on selected product and service categories by consumers across Tier 1 to Tier 5 markets.
Figure 1 – Average spending per year in '000 RMB on selected product and service categories by consumers across Tier 1 to Tier 5 markets.
Average spending per year ('000 RMB)
Lifestyles and habits are also similar
The majority of Chinese consumers surveyed said family is a very important part of their lives. Eighty-two percent of consumers surveyed in Tier 1 cities indicated family is more important than career, very close to the 81% saying this in Tier 5 markets. Three in four consumers living in Tier 1 cities (77%) stated they usually think about the needs of their family members when buying things, whilst up to 80% would do the same in Tier 5 cities.
The Synovate Media Atlas China survey also found that the majority of Chinese consumers prefer to enjoy leisure time at home. Seventy-four percent in Tier 1 and 2 markets enjoy passive entertainment such as watching television and listening to radio at home, similar to 76% of those in Tier 5.
The online population in China
Chinese consumers across all tiers increased their internet usage in the past year. For example, those born in the 1990s living in Tier 1 markets spent 40% more time online than last year, while those in Tier 5 are spending 43% more time with digital. The post 90s generation living in rural areas are spending 51% more time in this medium, an indication of how transformational this medium is.
"New media are growing fast. Internet, mobile for talking and mobile for non-talking activities dominate the market especially for younger generations, who spend more time on them than on mainstream media such as newspapers and magazines," says Garton.
Impact on Chinese consumers from different economic models
"Since the foundation of the People's Republic of China, it has experienced two completely different economic development periods: the Planned Economy from 1949 to late 1970s, and the Market Economy from 1980s to the present. People born under these two economic models show differences on value proposition, consumption behavior, and perceptions," elaborates Liu.
"Those born in 1950s and 1960s are keen on planning their expenditures and comparing prices carefully from different stores before buying - they are a very price sensitive group. The reliability of the product is also crucial for their buying decisions. However, the generations born in the 1980s and 1990s have been immersed in the market economy, and have enjoyed material resources. They prefer famous brands, are willing to pay extra for high-quality goods, and are proud to show their unique styles," continues Liu.
Development of China
"With the spread of wealth in China, we can see the trend that lower tier cities and rural areas are catching up to larger cities, even striving toward a metropolitan lifestyle. Companies looking to reap the immense opportunities presented in China need to be flexible and proactive in devising their media and marketing strategy to target this massive and intricate market ecosystem.
"Media Atlas China is a key planning tool for companies with by providing accurate, up-to-date and comprehensive information on the lifestyle, spending and media consumption of today's Chinese," comments Darryl Andrew, CEO of Synovate China.
About Synovate Media Atlas China
Synovate Media Atlas China is a continuous syndicated survey sampling 68,000 individuals aged 15 to 64 across 66 cities and rural areas in China, revealing the lifestyle, spending, media habits and demographics of today's mainland Chinese.
This comprehensive study provides insights on:
- Media information (exposure, engagement)
- Product consumption (usage, ownership, frequency)
- Brand data (aware, consider, occasional, prefer)
- Lifestyle attitude and leisure activity
- Demographics
The 2nd wave study includes 32,922 samples surveyed from December 2009 to June 2010, from 66 cities across Tier 1, 2, 3, 4, 5 cities and rural areas in China. 15 to 64 years old respondents were interviewed by CATI and face to face.
Synovate runs Media Atlas in China, Hong Kong, Malaysia, the Philippines and Thailand, and works closely with major media specialists, media owners and advertisers in each country to develop surveys relevant to local conditions.
For more information please visit www.synovate.com/research-services/media/media-atlas.jspx
Contact(s) for this press release
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Jennifer Chhatlani
Global Marketing Director |
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222 South Riverside Plaza |
Tel: +1 312 526 4359 |
Synovate generates insights to help clients drive competitive brand, product and customer experience strategies. Now part of Ipsos, with offices in over 80 countries, our approach combines best in class global research capabilities with personalised service, local knowledge and the flexibility to create teams and processes that meet clients' specific requirements. At Synovate, our clients sit at the top of our organisational chart, driving us to continually develop more innovative research solutions that predict actual business outcomes.
For more information on Synovate visit www.synovate.com.