Jenny Chan 陳詠欣
Dec 20, 2013

Marketing in China's lower-tiers: A visit to Heilongjiang

HARBIN & QIQIHAR - For our last China-related story of 2013, let us transport you to Heilongjiang (黑龙江), aptly known for its ice festivals and cold winter months. Lower-tier cities in this province are one of the mainland's many battlegrounds for local brands determined to protect their home turf against multinational brands whose market-shares are stagnating in upper-tier cities.

Street sign in Chinese/English/Russian in Harbin
Street sign in Chinese/English/Russian in Harbin

Charm of the kvass

Russian cultural influences in Heilongjiang, from its history as a Russian colony from 1898 to 1917, have largely faded. The Saint Sophia Cathedral (a Russian Orthodox Church) is now just an outwardly visible reminder of the region's Russian heritage—more of an architectural museum frequented by tourists. Even food products under the Qiulin brand (秋林), named after late-19th century Russian trader Ivan Churin, are made in China nowadays.

The slower, sentimental ways of the cities of Harbin and Qiqihar are common among consumers in the northeastern part of China, where norms often take their cues from weather, seasonal changes and crop rotation.

Big fish in a shallow pond

While the pace is slower and per-capita GDP remains lower than in places like Shanghai and Beijing, the economic growth in these cities continues to far outpace more developed ones. For most advertisers, lower-tier markets represent the future of their business in China, according to GroupM.

In summer, Heilongjiang locals wake up earlier than people in other parts of China, and street markets are already bustling at 5 am. Some large shopping malls open their doors at 8 am, in contrast to those in first-tier cities, which open between 9 and 10 am.

Nocturnal activities also end a little earlier in these lower-tier cities; stores close around 7 pm. The end of the day generally means 10 pm, when most local residents, after relatively monotonous evenings at home having dinner and watching TV, go to sleep.

In addition, locals in Harbin like swimming in the river regardless of the season, and feel that this is a good physical workout. This is congruent with topline findings from GroupM research about other lower-tier cities. Respondents there prefer to change their lifestyle habits to keep fit—swimming being one; while upper-tier consumers are more inclined to “buy” the concept of health by spending more money on health supplements.

In lower-tier cities, health is more related to exercise, so brands that want to play in the healthcare space need to clearly show not just the functional benefits of their products, but also how they can improve lives, according to GroupM.

Rethink your battleground

This reporter's visit to the two areas, considered tier-three and -four cities, also saw Chinese domestic brands capitalising on expressions of nationalism and aggressively expanding local distribution advantages. Both international and domestic brands in China have focused on distribution in the past, but as e-commerce and bricks-and-mortar malls get more and more established throughout China, the battle will be about which brands are perceived to hold the most value.

In this context, it is essential for brands to understand the importance of building emotional connections with their consumers, according to GroupM. Emotions impact consumers differently with market maturity. Respondents aged 15 to 64 in tier-four cities are the most bonded with brands, citing feel-good factors such as 'make me feel more confident and attractive'.

In the eyes of the locals, Harbin girls are also more daring than girls elsewhere in China in terms of clothes they wear—more revealing of skin, but not necessarily fashionable.

That of course seems like a universal desire across China, but with Heilongjiang folks famous to be more forthright, gregarious and emotional than others, it pays to take note of how emotions play a more personal role in brand loyalty.

Brand emotion and behaviour loyalty

In fact, focus-group participants in Harbin and Qiqihar responded strongly to questions exploring why most of them are unwilling to migrate despite better economic opportunities elsewhere. One said, "People outside Heilongjiang are more impersonal, while we value interpersonal relationships; we help each other without qualms and can even be the caretaker of your money on your behalf." ("外面的人没有人情味,东北人重感情,认识的人都会互相帮忙,代人交钱都可以。")

Indeed, GroupM research stated that respondents in the north and east of China are more sensitive to emotional influences in brand loyalty, while those from the southwest and central regions responded better to practical and functional drivers.

Inevitably, emotional well-being equates to definitions of happiness and success. When it comes to a 'happiness index', more than half of respondents said as long as their families are healthy and safe, they are happy. Better material goods and more time spent on travelling are just barometers of whether quality of life has improved.

Shan Hai Jin 2013

GroupM's Shan Hai Jin research covered an extended scope of four tier-one cities, 28 provincial capital cities, 60 prefecture-level cities, and 184 county and county-level cities, with 19,400 samples. This represents an expansion from only tier-three and -four coverage in previous years since the study began in 2007.

This year, tier-three cities are prefecture-level cities including Foshan in Guangdong, Wuhu in Anhui and Shiyan in Hubei. Tier-four is represented by incredibly fast growing county-level cities like Yuzhong in Gansu, Tianmen in Hubei, Helan in Ningxia and more.

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