Despite extreme heat in the summer and bitter coldness in winter, the 3,500-year-old city used to be one of the premier manufacturing centers in China, thanks to its geographic location. Wuhan is divided into three towns (Hankou, Hanyang and Wuchang) by the Yangtze River and its largest tributary, the Han River, creating the country’s largest inland port. Lying in the center of China, it is also the national hub for the country’s railway, highway, airline, and telecommunication networks.
In 1911, the first shot of the Xinhai revolution was fired in Wuchang, ending China’s 2,000-year-old feudalist regime. Over the course of the 20th century, Wuhan evolved into an industrial powerhouse for manufacturing, science and technology, as well as an important university town for technical and engineering fields.
Starting in 1979, however, when Deng Xiaoping normalized relations with the U.S. and opened China to nationwide economic development, Wuhan’s star began to fall.
Lucy Zhang, MindShare’s director of insights in Shanghai, compares modern-day Wuhan to “a local bus, purely functional, working in a bad environment that is gray and depressing.”
Consumers there “used to be very proud of their important city but over the past two decades, they’ve lost that pride, because they’ve lost out on foreign investment to other cities” like Chongqing, Nanjing and Shanghai, she said.
As a result, the city’s unemployment rate is higher than in other Chinese cities, more than 20% compared to less than 10% in Shanghai. “When you visit Wuhan, you can feel that people there are not optimistic. While China as a whole is growing quickly, people there aren’t feeling the benefit,” said Ms. Zhang.
Consumers, predictably, are less inclined to opt for expensive foreign brands, she added. “In general, they are still very price-sensitive. They don’t know much about foreign brands, what they mean and why they are famous, because they have low purchasing power and therefore don’t have a relationship with them. They don’t think they can afford them, and even if they did, many people in Wuhan don’t believe they are worth the premium prices.”
“A lot of the work McDonald’s has done in Wuhan is built around understanding how they can get to a value equation that makes sense to local consumers. They had to look at different pricing combinations to find something that worked,” agreed Peter Rodenbeck, Hong Kong-based director of operations, Greater China at DDB Worldwide. He visited the city many times in his last position at Leo Burnett, where he ran the fast food company’s advertising business in China.
Convincing consumers to splash out on a Happy Meal for their kids led McDonald’s to turn their restaurants into virtual community centers, handling everything from selling bus tickets to getting film developed.
“The strength of the brand and the food wasn’t enough there, so the company had to play roles that it wasn’t used to,” he said.
But he is optimistic about Wuhan’s potential as a gateway for the growth around it, as foreign investors continue pumping money into central China. As a result, more Taiwanese, Hong Kong and Malaysian Chinese are starting to look at Wuhan as a valuable operational base.
The city also has some scenic spots, including the European-style buildings on Yanjiang Street; the Yellow Crane Tower dating back 1,700 years (the name comes from a legend about a Taoist priest flying to Heaven on the back of a yellow crane); East Lake, whose natural beauty rivals that of the West Lake in Hangzhou; and Guiyuan Temple, a picturesque 400-year-old Buddhist temple filled with hundreds of sitting, sleeping, laughing and angry Buddha statues.
Wuhan cuisine is known for freshwater fish and soup dishes like Steamed Wuchang Fish, Soy Sauce Grass Carp and Wangji Chicken Soup, as well as Mianyang Three Steamed Dishes (steamed fish, pork and meatballs), Huangzhou Dongpo Pork, Wudang Hedgehog Hydnum and Hot Dried Noodles.
Fast Facts: Wuhan
Population: 7.86 million
GDP (2004): $23.57 billion (195.6 billion RMB)
TV households (2005 est.): 1,231,000
Ad spend (2005): $1.21 billion (10.08 billion RMB)*
Ad spend (2004): $0.90 billion (7.5 billion RMB)*
Year-on-year increase: 34.4%*
Adspend as a percentage of GDP (2004): 3.8%
Average minutes viewed per day per viewer of all channels (aged 4+): 158.7
Basic cable subscription cost (per month): $1.20
*based on published rate card
Average cost of 30”spot during prime time on Hubei TV Economic, the city’s most-watched local channel (based on rate card value):
18:55-19:33 - $1,446
19:33-20:30 - $1,550
20:37-21:30 - $1,610
Top 10 brands by ad spend on TV (2005)
1. Oil of Olay (Procter & Gamble)
2. Rejoice (Procter & Gamble)
3. Crest (Procter & Gamble)
4. Gai Zhong Gai (Chinese tonic/vitamin)
5. Colgate (Colgate Palmolive)
6. DHT Proportion Growth Hair (hair pharmaceutical)
7. Head & Shoulders (Procter & Gamble)
8. Pantene (Procter & Gamble)
9. Omo (Unilever)
10. Safeguard (Procter & Gamble)
(Local channels only, based on rate card.)
Top 10 advertising categories on TV (2005)
1. Shampoo & Conditioner
2. Tonic & Vitamin
3. Oral Hygiene
4. Professional Services
5. Skin Care
6. Cough & Cold Preparation
7. Chinese OTC pharmaceuticals
9. Communication Equipment & Services
10. Stomach Medicine
(Local channels only, based on rate card.)
Top 5 local channels by ad revenue
1. Hubei Satellite TV
2. Hubei TV - l
3. Hubei TV Economic
4. Wuhan TV 2 - Culture & Art
5. Wuhan TV 4 - Movie
Sources: Nielsen Media Research & AGB Nielsen Media Research