To be clear, the Carat report doesn't discuss the US after WWII, but to students of economic history there are interesting parallels.
Suburban growth in the US from the 1950s on up to the turn of the century unleashed such modern-standard fixtures as big-box and hypermarket stores, national ad campaigns to satisfy “middle America”, and a love and need for automobiles that shaped the way Americans buy.
If you knew all that in 1949, how would you have set out your marketing plans to capture the hearts and minds (and wallets) of this new crucial set of American consumers? While you can’t go back in time, history does sometimes repeat itself. Low-tier China is your new suburban America, and Carat’s report combines both proprietary consumer data and a “crowdsourcing research methodology” to put the parallel in perspective.
If you’ve visited China in the past 10 years, you can see for yourself how big the big cities have become. The skylines of Guangzhou and Shanghai tell a clear narrative. But less known places like Zhongshan tell even more transformational stories. Once nearly desolate and derelict, living lower down the scale is approaching pleasant.
What’s vital to note is that while Shanghai may house about 30 million people (depending whose count you go with), there are hundreds of millions more living in ‘smaller’ places across China. When you think on that scale, it’s clear why Carat references a goldmine in the report title. And while it doesn’t call out a direct comparison to America’s own suburban evolution, marketers at global brands should be able to spot the similarities.
Looking at out-of-the-way places like Quanzhou and Wuchang, the study draws on people in hometowns to take interviews, pictures and videos. What you see is a collection of things that indicate a true consumerist lifestyle.
The bottom line is this: When anyone can spend less time struggling for life’s necessities, they can (and do) shop for its indulgences more often. That may seem obvious, but consider some of the ramifications that the study uncovered.
The transition in the lower-tier cities is most detectable in generational divides. Among those born after 1995, a pursuit of beauty has become a prevailing theme that is entirely different from their parents. For the younger set, aesthetics are particularly important and personal. People between 12 and 19 years old showed higher propensity to value culture and art as compared to any age bracket.
The research also finds that lower-tier residents born after the 1980s have a lifestyle that is starting to resemble more-metropolitan peers in top-tier cities. The agency’s analysis indicates that the condition fuels transformations not only on an economic level but also at a psychological one. There’s simply more opportunity for people to explore their own self-development. That leads to personalized tastes and self-expression, which manifests through consumption.
To be fair, all this is rather standard fare for markets on the emerging journey. But China has already been on that road for decades. The implication to consider then is that China has emerging markets within its emerging market. The boom we’ve seen up to now was largely top-tier fueled.
And the lower tiers are like a second wave waiting to happen.
Focusing on survival affords people little room for concern about how things look; they just need things to work. Therefore, fashion and beauty products had typically ranked pretty low on the radar for people living in lower tiers. But Carat’s study suggests that is changing. Low-tier China is deep in the process of shifting from an emphasis on practical to fashionable. New shopping malls, higher-end and branded restaurants and entertainment venues are all cropping up in places where only a few years ago there was no time for leisure and the flow of workers (and therefore consumers) was into the big cities. Both jobs and the holders of them are in the process of migrating back, bringing with them that original spark that ignited China’s consumerism in the first place.
Carat has some specific tips for brands looking to tap into the new-found affluence and consumer thinking.
One is for online shopping. Although relatively savvy with mobile commerce, many people in the lower tiers still haven’t had a chance to physically experience many of the actual products that have become available online. There’s a knowledge-base gap. Some potential solutions the agency offers are to make online video demonstrations to better familiarize these consumers with products. Or to have a demo store that doesn’t necessarily stock inventory but lets people smell, touch and taste products. Since cars and good roads are now far more commonplace in lower tiers, a demo shop can draw from a considerably large area.
That’s already happening, according to the report, with “spaces in malls now being used as ‘showrooms’ or physical touchpoints for online shopping services,” which gives lower-tier consumers a chance to shop in their own comfort zone.
“Strong consumption power and new lifestyle are generating more diversified consumption needs, as well as more touchpoints in terms of both time and space, enabling more room for imagination, from product development, experience, to marketing channels and timing,” the report states.
There was no blueprint for marketers back when America's suburbs went through the same type of transformation. Suburbia became a force that still largely keeps the USA at the top of world-economy rankings and still represents the average American consumer. But that story has well run its course, giving us at least a rough sketch of what to expect in China. Rather than focus on how Chinese tastes differ from the West’s, brands might want to put some strategic attention on how the country’s emerging consumption patterns are remarkably similar to the West’s largest market. Take the long view and you’ve got a blueprint.