Chinese living in even the smallest communities are widely going online for entertainment and communication, spending about as much time on the computer as their peers in Shanghai and Beijing, according to a new study of lower-tier markets that seeks to provide a comprehensive profile of China's consumers.
Researchers from Starcom MediaVest Group fanned out to 510 locations across China, targeting less-developed cities and towns where the vast majority of consumers live. The "Yangtze Study" includes interviews with 13,507 people ages 13 to 45 in what Starcom is calling one of the first studies of this scale to be conducted in China.
While marketers have thoroughly analyzed Chinese in the urban tier-one cities of Beijing, Shanghai and Guangzhou, there's much less understanding about how to effectively target the 721 million consumers in rural communities and the other hundreds of millions in less-developed cities.
Many of the study's findings reinforced existing information about consumers in lower-tier markets. They are more pragmatic than their big-city counterparts with realistic life goals -- owning a business was a common response. Young people carry the burden of their families' expectations and are in a hurry to grow up so they can take advantage of work and growth opportunities available to adults. They are more conformist. They want to travel, but dream of visiting Beijing rather than New York or Paris.
These consumers are just as worried about product safety and quality as other Chinese, though they realize they have less access to information and therefore seek reassurances that they're making the right purchase. Price and value are major drivers of purchasing decisions -- a simple giveaway can spur a rural shopper to buy an item.
As for luxury brands: "Luxury is not about the brand of car, it's about having a car because it means you can afford the petrol for it," said Jeffrey Tan, Starcom's national research and insights director for China and Hong Kong. He gave the example of a 33-year-old woman in Anhui province who was given a Louis Vuitton purse as a gift -- not knowing what it was, she used it when she went food shopping at the wet market.
But what researchers didn't expect to find was that media consumption in some of these communities was not far off from trends in the biggest cities.
"The biggest thing that surprised me from a pure media standpoint was the penetration of digital in terms of peoples' everyday lives. (Instant messaging program) QQ was everywhere," said Lisa Richert, Starcom MediaVest 's director of strategy for North Asia. "When we think about the habits of digital and peoples' behaviors -- chatting, entertainment, communications -- it's universal. It's everywhere across China."
(It's not an exaggeration to say that QQ is everywhere. Operator Tencent reports nearly 702 million active instant messaging accounts as of this summer.)
A 21-year-old woman in rural southern China said she hasn't watched TV in a year. Instead, she gets everything she needs on her computer.
"There's a real concern that TV in the lower tiers has become a bit obsolete, I feel," Mr. Tan said. "Right now with content in the hands of people, they're choosing the computer more so than the TV."
The study found that out-of -home ads and TV have the highest reach, both more than 75%, but digital is third at about 60%. And Chinese are spending more of their time on the web: the average consumer is online 3.25 hours per day, vs. 2.21 hours with TV and .51 hours around out-of -home ads. Those in tier-three cities spend the most time online out of all Chinese consumers, 3.57 hours per day on average.
Online video is also hugely popular. The study found that Chinese spend an average of 1.76 hours per day watching videos on computers, with consumers in tier-two markets, which include provincial capitals and economically developing cities, watching almost 2 hours per day.
"TV is still huge, but the comment that comes back is we need to move away from thinking of TV as the only sense of video content. It is truly video content," Ms. Richert said, listing examples such as traditional TV shows, content from brands or programming created by video-sharing sites like Youku and Tudou. "It's about content and people are finding different ways to consume it."