Small county, big spending power? How to break through the 6 trillion market?

McKinsey predicts that by 2030, 66% of China's personal consumption growth will come from county towns.

As the first-tier city market becomes saturated and competition between brands becomes increasingly fierce, many companies have begun to shift their strategic focus to the county market to compete for this emerging consumer hotspot. The rapid development of the county economy marks the rise of China's county economy and has entered the era of competition for "hundred-billion-yuan counties".

According to the "2024 China's "hundred-billion-yuan county" development research report", by 2023, there will be 59 county-level administrative regions with a regional GDP of more than 100 billion yuan, an increase of more than five times from 2013. In the same year, China's county-level social consumer goods retail sales accounted for 46.3% of the national total.

Although these "hundred-billion-yuan counties" only account for 1.2% of the country's land area and 4.5% of the permanent population, they contribute 7.6% of the country's GDP, more than 10% of the output value of industrial enterprises above designated size, and about 10% of specialized and new "little giant" enterprises.

The county economy is no longer a marginalized supporting role, but a key engine of China's economic growth, and its consumption potential is being fully revealed in an unprecedented manner. In this context, in-depth research on county consumer groups is particularly urgent and important. In response to this emerging market, we have carefully created the report "New Consumption Power of Small Town Aristocrats: Deep Insights into Social Identity and Brand Choices". Through in-depth analysis of questionnaire surveys, we strive to outline the true face of county consumers, explore their lifestyles and brand preferences, and aim to provide brands with a key to open the door to county consumption, help them stand out in the fierce market competition, and grasp the pulse of the times of the rise of county economy.

Part 01: Small town aristocratic circle, dual-wheel drive of identity recognition and quality experience:

In the consumption picture of the county town, "identity recognition" has become a unique landscape. Here, social networks are woven, and gifts, as a bridge of emotion, circulate between people, giving birth to the vigorous vitality of consumption.

In 2023, the 9.1% growth of high-end cosmetics counters in third-tier cities and the surge in active users of beauty and body care services in third-tier and below areas on the Meituan platform are vivid footnotes to this phenomenon. Behind this is the leisurely life of the small town woven together by lower housing prices, a relaxed pace of life and moderate work pressure, allowing the "small town aristocratic circle" to find peace and abundance outside of the internal volume. In such an environment, those small town ladies who are well versed in the lifestyle of the metropolis are increasingly inclined to pay for high-quality services and experiences, and pursue spiritual satisfaction and quality of life.

The high-end consumer group in the county town is undoubtedly a blue ocean that needs to be developed urgently. Several distinctive labels on them are particularly eye-catching: they have little or no mortgage burden and are well-off; their family structure is stable and their consumption decisions are centralized; they are highly loyal to the platform and have a strong herd mentality. This means that winning over the core decision-makers in the family is like opening the key to the entire family consumption world.

In-depth analysis shows that the consumer groups in county towns can be divided into three age groups, each with its own characteristics: the young group pursues individuality and has a lasting enthusiasm for mid-to-high-end brands; the middle-aged group pays more attention to maintaining social ties through consumption; and the silver-haired group tends to trust recommendations from acquaintances and is particularly sensitive to prices.

Combining these three, we can extract two major consumer types:

The first is the "quality self-pleasing type", which accounts for about 60%. This group pays special attention to the quality and consumption experience of products, and prefers mainstream mid-to-high-end brands. They consume not only for external display, but also for inner pleasure and self-worth realization.

The second is the "down-to-earth type", who are fond of products that look high-end but are actually very cost-effective. These products often benefit from a stable supply chain and extreme cost control, achieving a perfect balance of quality, brand and price, and satisfying consumers' demand for "big brand substitutes", without losing face and taking into account affordability.

The small town aristocratic circle is a consumer world that wanders between identity recognition and quality experience. In this consumer group, there are both exquisite women who pursue high-end tastes and pragmatic consumers who pursue cost-effectiveness. Whether it is the love for brands or the sensitivity to prices, the wealthy circles in county towns have demonstrated diverse consumer demands and huge market potential.

Their disposable income is abundant, and their beauty and skin care consumption is high.

The sample data of the in-depth survey shows the economic outlook and consumption habits of the small town consumer group: the family economy is relatively affluent, and the annual income after tax is mostly concentrated in the range of 100,000 to 150,000 yuan, accounting for as high as 39%; followed by the range of 50,000 to 100,000 yuan, accounting for 38%.

The economic foundation has laid a solid foundation for the high frequency of beauty and skin care consumption. Consumers who buy beauty and skin care products 3-4 times a month are the mainstream, with this proportion reaching 40% in third-tier cities, and as high as 64% in fourth-tier cities. Fifth-tier and below cities are also closely behind, accounting for 52%. This high-frequency consumption phenomenon not only reflects the pursuit and love of beauty by small town residents, but also highlights the important position of beauty and skin care in their daily lives.

In terms of the amount of consumption of beauty and skin care products, different tier cities have shown their own characteristics. Consumers in third-tier cities spend 501-1000 yuan per month, accounting for the largest proportion, reaching 27%, while consumers in fourth-tier cities and fifth-tier and lower cities are more inclined to spend 201-500 yuan per month on beauty and skin care products, accounting for 55% and 40% respectively. Behind these figures are the rational choices and moderate consumption of beauty products by consumers in low-tier cities, which also reveal the huge potential of the beauty market in low-tier cities.

Preference Insights: Trust in Celebrity Hosts, Women Prefer Internet Celebrities

In the survey, consumers' preferences for live broadcast room types are influenced by multiple factors such as gender, education, monthly expenditure level and marital status. Understanding these preferences is the key to developing precise marketing strategies and improving consumer satisfaction and loyalty for brands and anchors.

Up to 77% of respondents said that they would buy products based on the recommendations of beauty experts. This highlights the important influence of beauty experts in the consumer decision-making process. When exploring the preferences for live broadcast room types, we found that most consumers prefer live broadcast rooms with senior celebrities and hosts. This preference may be due to trust in the celebrity effect and recognition of their professionalism and authority.

Analysis from the gender dimension: 38% of men prefer live broadcast rooms of young or traffic stars, while 41% of women prefer live broadcast rooms of Internet celebrities. Consumers with a bachelor's degree or above are more likely to choose live broadcast rooms of traffic stars to place orders. In contrast, consumers without a bachelor's degree prefer live broadcast rooms of Internet celebrities, perhaps because Internet celebrities are closer to their daily lives and consumption needs. Those who spend 201-2,000 yuan per month tend to place orders in the live broadcast rooms of experienced stars or hosts, while those who spend less than 200 yuan or more than 2,001 yuan per month prefer the live broadcast rooms of internet celebrities and bloggers. 45% of unmarried consumers like to place orders in the live broadcast rooms of popular stars, while married consumers are more likely to choose the live broadcast rooms of internet celebrities and bloggers.

Part 02: What brands do the wealthy ladies and gentlemen in county towns prefer?

: After in-depth analysis of online data and integration of the dual dimensions of user voice and purchasing behavior, it was found that in the small town consumer market, ten brands are gradually winning the heartfelt support of a wider consumer group with their attractiveness and competitiveness.

Hansu, Fanmilin, Hou, Xu Haili, Magi Li, PUCO, Bulao Miyu, Aorong, OLAY and Ji Meng, each with its own unique features, have left a strong and colorful mark on the small town consumption picture. The audience of these ten brands on the Douyin platform is mainly focused on third-tier cities and lower-tier and user cities, and the brands or their products have a high number of fans or discussion voices on Douyin.

Among them, some have built a strong marketing ecosystem, accurately reached and profoundly influenced the consumer mentality of the wealthy ladies in small towns, and established a distinctive brand image through multi-dimensional and high-frequency brand communication; others rely on the excellent quality and wide praise of the products themselves to stimulate consumers' enthusiasm for continued repurchase, and form a solid user base through word of mouth. In addition, some brands have effectively linked the core purchasing power of the small town market with their offline channel networks that have been cultivated for many years, achieving seamless integration and complementarity between online and offline. Brands that focus on optimizing service experience have quietly penetrated into users' daily lives through meticulous and personalized service strategies, building up brand loyalty that is hard to give up.