Actually it's a kaleidoscope of
different markets. China's 1.4bn people live in 31 provinces
ranging from the sub-tropical south to the decidedly wintery
northern plains. Although most Chinese have a common historical
ethnicity - it's not an immigrant "melting pot" market like the US
- there is staggering variation in growth rate, in lifestyle, in
affluence and expectation as you travel across the country. We've
drawn what we think is a useful parallel in our forum presentation
to Europe as a region.
No one would treat the EU with its
800m people as a single market, and we think it's helpful to think
of China, while a country in itself, as containing a similar
great degree of variation - differences that are often significant
enough to require different strategies.
If you break down China into its six
key regions then Northern China -including the capital Beijing -
has the same GDP as the Netherlands. Eastern China - which includes
Shanghai - has the same GDP as Italy and Southern China - including
Guangzhou - has the same economic clout as Spain. And while we
characterise China as a growth market, that growth hasn't been the
same across the country. The North-West provinces account for just
5% of GDP and 7% of the population, while the South-West provides
15% of the people but just 8% of the GDP. By contrast East China
accounts for 29% of the population and 38% of the GDP.
Traditionally, the south and the area closest to Hong Kong has been
seen as the most developed part of the country but in the last five
years Shanghai has caught up.
Growth in China starts in the Tier 1
cities of Beijing, Shanghai and Guangzhou, spreads out to the Tier
2 conurbations such as Chengdu, Hangzhou and Tianjin and only then
does it reach out to the Tier 3 cities such as Jiangmen, Xiangfan
and Yibing. The rural areas have been the last to see improvements
in living standards, but they are improving exponentially.
Lifestyles and media habits also therefore vary greatly by
location. We recently completed the largest-ever Chinese market
analysis of the behaviour of recent and potential car buyers for
our client VW, with a bespoke insight tool called RealWorld
We found that lives in Tier 1 cities
were significantly busier, working hours were longer, traffic jams
were worse and digital media usage was both more widespread and
complex. By contrast, in Tier 2 cities, we found some consumers had
time to pop home for lunch, they had more hobbies and interests
outside work and their media usage was still based around the
traditional players such as CCTV and the major online portals.
Read more here.