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The Emergence of New Tier Cities: A Digital Transformation

Recently, QuestMobile published a comprehensive report on "User Insights in New Tier Cities." New-tier markets are often referred to as new frontiers of consumption. In light of this report, we have extracted several crucial key points that shed light on the dynamics of these burgeoning markets


China's urban landscape is undergoing a significant transformation. Historically, cities like Beijing, Shanghai, Guangzhou, and Shenzhen, known as the first-tier cities, have dominated the economic and cultural narratives. However, as the 21st century progresses, a new set of cities is emerging from the shadows, challenging the status quo and redefining China's urban landscape. Termed the "New Tier Cities," these urban centres, including cities like Hangzhou, Chengdu, Wuhan, and Tianjin, are becoming the new hubs of economic activity, technological innovation, and cultural vibrancy. Their rise is not just a testament to China's infrastructural prowess but also an indication of the shifting patterns of migration, investment, and development. This article delves deep into the emergence and significance of these New Tier Cities, highlighting their growth trajectory, consumer potential, and the unique opportunities they present.

  • The Rise of New Tier Cities

QuestMobile's data reveals a fascinating trend. The "New Tier Cities" are experiencing rapid growth, with their overall monthly active user base reaching 4.68 billion, a year-on-year increase of 12.2%. These cities are not just growing in numbers but also in engagement, with the average monthly usage time per user being 176.1 hours, a growth rate that's 3.6 times that of first-tier cities.

  • The Consumer Potential in New Tier Cities

The spending power of consumers in these cities is on the rise. In 2022, the average consumer expenditure in New Tier Cities grew by 14.3% year-on-year, reaching 35,000 yuan. This growth is in stark contrast to the first-tier cities, which saw a decline of 3.1%, with an average expenditure of 44,000 yuan.

  • Digital Consumption Patterns

The digital consumption patterns in these cities are noteworthy. Over 70% of the population in these cities spends over 1000 yuan online every month, with 10% of them spending more than 3000 yuan. When it comes to mobile devices, nearly 70% of users in these cities own phones priced over 2000 yuan, with 24.1% owning devices priced above 5000 yuan.


  • The Unique Demographics

The demographic profile of New Tier Cities is distinct from the first-tier cities. Over 50% of the population comprises the post-80s, post-90s, and post-00s generations. The majority are married, leading to the emergence of specific consumer groups like beauty enthusiasts, pet lovers, tech geeks, and those with a strong sense of local cultural identity.

  • Brand Preferences and Consumption Trends

The brand preferences in these cities are evolving. Local brands like Bosideng, Xtep, XtepKids, and Li Ning are gaining popularity. There's also a strong inclination towards local cultural attractions, with places like Liangzhu Ancient City, Shanghai Science and Technology Museum, and Beijing Garden Expo Park witnessing high footfalls.


  • Entertainment and Lifestyle Choices

When it comes to entertainment, short video apps have a penetration rate of 77.7% in New Tier Cities, nearly 10% higher than in first-tier cities. Additionally, there's a growing trend of parents in these cities using online tools for their children's education.

  • The Pursuit of Quality Life

The residents of New Tier Cities are not compromising on their lifestyle. They seek a high-quality life and are discerning consumers. They prioritize experience-based consumption, with travel and performance apps seeing high engagement. Smart home apps are also gaining traction, reflecting the residents' aspiration for a tech-driven, comfortable living.


  • Outdoor Activities and Social Engagement

Outdoor activities like camping, cycling, and mountain climbing are becoming popular in these cities. Shows themed around camping, like "Let's Camp Together 2" and "Camping with Dad," have garnered attention rates of 50.6% and 37.5%, respectively.


The Evolving Consumer Consciousness


The consumers in New Tier Cities are bold and avant-garde. They are open to "spend now, pay later" models but are also conscious about not wasting. This pragmatic approach to consumption allows them to switch roles between being buyers and sellers seamlessly. In May 2023, the user base of luxury brand mobile applications and mini-programs in emerging markets reached an impressive 13.291 million, marking an impressive year-on-year growth rate of 83%. Among the top 5 luxury brand mini-programs, Louis Vuitton led the pack with 1.613 million users, followed by Coach with 1.343 million, Cartier with 1.022 million, Longines with 0.978 million, and Gucci with 0.805 million users. This exponential expansion reflects the bold consumerism displayed by these luxury brands in their relentless pursuit of self-fulfilment.


The Future of New Tier Cities


The rise of New Tier Cities in China signifies a shift in the economic and digital landscape. As these cities continue to grow and evolve, they offer a plethora of opportunities for businesses and brands to tap into a new, dynamic consumer base.


Contact us today for tailored marketing strategies and expert guidance to unlock the full potential of these new tier cities and elevate your brand’s success to new heights.

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