Consumers in Big and Small Cities Aren't That Different

Synovate Study Shows Similarities in Lifestyle Choices and Spending Behavior

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HONG KONG ( – When it comes to lifestyle choices and spending behavior, consumers in China's lower-tier cities are more like those in top tier cities than many marketers think.

"All Chinese consumers are going through changes in their consumption behavior, media use and motives for spending, [but they share] core Chinese values. Marketers need to appreciate how development is shifting consumption," said Steve Garton, executive director-media at Synovate in Hong Kong.

The Aegis-owned global market research firm has released top-line findings from its latest Media Atlas China. The syndicated study surveys 68,000 consumers annually across 66 cities and rural areas in China.

The latest results, based on a study of 32,922 consumers over the past seven months, show that China's modern cities and rural areas share similarities in terms of daily expenditure, from products such as nutritional supplements and apparel, to services such as entertainment and health and fitness.

Nutrition and health are high priority
For example, the average annual spending on apparel by Chinese consumers living in tier five cities is RMB 3,600 ($530), compared to RMB 3,900 ($574) by consumers in tier four cities, RMB 3,300 ($486) in tier two, and RMB 3,900 ($574) in tier one.

Annual spending on health and fitness is also similar. On average, consumers in tier five cities spend RMB 2,700 ($398) per year, compared to consumers in tier one cities who are spending just RMB 300 ($44) more.

"Some spending habits are shaped by traditional culture, which has been rooted in China for almost five thousand years. Good nutrition and keeping good health take high priority in daily life, and do not vary much across income level or overall living standard," said Jessica Liu, Synovate's media research director, China in Shanghai.

"Some spending habits are shaped by traditional culture, which has been rooted in China for almost five thousand years."
Eighty-two percent of consumers surveyed in tier one cities indicated family is more important than career, very close to the 81% who gave the same response in tier five markets. Three in four consumers living in tier one cities (77%) say they usually think about the needs of their family members when buying things, while up to 80% would do the same in tier five cities.

The majority of Chinese consumers prefer to enjoy leisure time at home. Seventy-four percent in tier one and two markets enjoy passive entertainment such as watching television and listening to radio at home, similar to 76% of consumers in tier five markets.

Chinese consumers across all tiers increased their internet usage in the past year. For example, those born in the 1990s living in tier one markets spent 40% more time online than last year, while those in tier five are spending 43% more time with digital. Members of the post 1990s generation living in rural areas are spending 51% more time in this medium.

Differences are based on age, not geography
For all the similarities found in Synovate's study, differences certainly exist—but they are based more on age than geography.

The People's Republic of China has experienced two completely different economic development periods: the planned economy from 1949 to the late 1970s, and the market economy from the 1980s to the present.

"People born under these two economic models show differences on value proposition, consumption behavior, and perceptions," Ms. Liu said. "Those born in the 1950s and 1960s are keen on planning their expenditures and comparing prices carefully from different stores before buying. They are a very price-sensitive group. The reliability of the product is also crucial for their buying decisions."

Generations born in the 1980s and 1990s have been immersed in the market economy, and enjoyed greater resources.

"They prefer famous brands, are willing to pay extra for high-quality goods, and are proud to show their unique styles," Ms. Liu said. "With the spread of wealth in China, we can see the trend that lower tier cities and rural areas are catching up to larger cities, even striving toward a metropolitan lifestyle."

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