One of the first Chinese cities opened to foreigners as a tourist destination, Changsha’s recorded history can be traced back 3,000 years through tomb relics. It became the leading city in its region in the early Han Dynasty (206 BC-200 AD).
By the time of China’s Qing Dynasty (1644-1911), it had developed into Hunan’s political, economic and cultural center. The province’s residents are known for aggressive thinking, openness and an ability to take action, particularly in times of war. Its remote regions used to be a popular haven for gangsters.
Today, Changsha has evolved into a well-established economic and technical development zone, but this second-tier city “is always neglected,” said Yang Ke, general manager, Publicis Worldwide, Guangzhou. The local economy remains dominated by government-owned companies in areas like tobacco, banking and property.
Situated in a valley along the lower part of Xiang River, Changsha is “relatively less-developed compared to coastal cities and Changsha has traditionally been an outbound post for immigrants leaving the area. Young local talents prefer Guangdong province for career opportunities.”
The disposable income for Changsha residents in the first quarter of 2006 reached $555 (RMB 4,421), a 13.5% increase from the same period last year. The average spending in the rural area also recorded the fastest growth in the first quarter, according to Nielsen Media Research, but they are still conservative shoppers.
Changsha’s six million citizens “take pride in the quality of their diet and prefer simple and natural ingredients. This local and straightforward approach to food reflects their attitude to brands. Changsha is a strong pro-Chinese brand market and they are also cautious consumers, shopping around for the best deals, shunning fakes and scrutinizing ingredients,” said Sarah Thomas, Beijing-based national planning director at Bates.
Marketers interested in this market “should be sensitive to their more traditional approach to life and remember their canny attitude to shopping when structuring a campaign. Aim to communicate value rather than cheapness, tell an ingredients story where relevant and provide plenty of information at point-of-sale or on-pack to impress and communicate quality. Western brands in particular shouldn't underestimate the strength of local brands here,” she added.
In the past three years, the province has raised its national profile through the surprising success of Hunan Satellite TV, thanks to original programming and innovation with shows like “Supergirl.” Hunan Satellite is now the second-most popular channel in China after the state-run national network CCTV.
Hunan Satellite "has led the rise of regional channels in China," said Alfonso De Dios, Procter & Gamble's Guangzhou-based associate director, media, in Greater China. "Those guys are cowboys with ideas, they have embraced innovation and improved their capabilities, and they have shown a real willingness to work with marketers."
Although the number of TV households in Changsha is much lower than first-tier cities like Beijing, Shanghai or nearby Guangzhou, the city ranks third in China in viewing hours per week., The penetration of computers (20%) and mobile phones (57%) is relatively low.
“But it has a higher penetration in DVD players than the main cities like Wuhan and Chongqing, which means huge opportunities for mobile and technology companies,” said Nielsen’s director of client service in Shanghai, Rita Chan.
“The transportation system is well established in Changsha, and it is the third most advanced citiy in China in terms of communication capacity, providing much room for the growth of outdoor advertising,” she added.
Fast Facts: Changsha
Population: 6.21 million
GDP (2005): $18.3 billion
Adspend (2005): $ 1.31 billion
Adspend (2004): $ 0.99 billion
Year-on-year increase: 24.4 % (based on NMR’s media coverage)
Ad spend as a percentage of GDP (2005): 7.2%
Average minutes viewed per day per viewer of all channels (aged 4+): 197.9
Basic cable subscription cost (per month): $1.99
Average cost of 30”spot during prime time on Hunan Economic TV(Variety) , the city’s most-watched local channel (based on rate card):
18:15-19:28 - $1265
19:35-21:28 - $1687
Top 10 brands by ad spend on TV (2005)
1. Oil of Olay (Procter & Gamble)
2. Crest (Procter & Gamble)
3. Rejoice (Procter & Gamble)
4. Sanchine Pharm (Chinese OTC)
5. Wuliangye (Chinese wine/spirit)
6. Colgate (Colgate Palmolive)
7. Lafang (Chinese shampoo/conditioner/toothpaste/skin care)
8. Gai Zhong Gai (Chinese OTC)
9. Head & Shoulders (Procter & Gamble)
10. Changsha Changjiang Hospital
(Local channels only, based on rate card.)
Top 10 advertising categories on TV (2005)
1. Shampoo & Conditioner
2. Tonic & Vitamin
3. Professional Services
4. Toothpaste & Oral Hygiene
5. Skin Care
6. Cough & Cold Preparation
7. Chinese Wine & Spirits
9. Construction Equipment & Service
10. Chinese OTC
(Local channels only, based on rate card.)
Top 5 Local Channels by Ad Revenue
Source: Nielsen Media Research, China