Her hometowns prefecture level citys economic aggregate ranks in the top five in Henan Province. It is a large agricultural city, with a national famous brand of agricultural products. Residents consumption habits are more traditional and pay attention to cost performance. McDonalds once opened two restaurants in the center of their city. They were closed for various reasons. There was no Starbucks in the area. The hottest fast food restaurant was Dexter.
Double 11 war is about to start, the growth of e-commerce consumption slows down, and brand businesses and consumers seem to be more calm than in previous years. The new battlefield facing the sinking market is still hot. The third, fourth and fifth tier cities have become new markets for enterprises to seek increment, and online and offline are making efforts simultaneously.
In recent two years, the trend of infrastructure construction, population and urbanization in the new first tier cities and the third, fourth and fifth tier cities has been closely watched by consumer goods brands, and has become a strategic wind vane for brand sinking.
During the interview, consumers in the third, fourth and fifth tier cities generally disagreed with the statement of sinking market. Xiaoxu, a young man working in Yichang government, thinks that it is a process of going out of the circle from first tier cities to third tier and fourth tier cities, a process of moving from the minority to the masses, and an inevitable choice for first tier cities to find new growth after the growth of consumption market slows down.
Enterprises mostly think that the consumption growth rate of small cities in the central and western regions is relatively fast, but it is worth local vigilance that the more small cities in the central and western regions, the less young people there are. Attracting and retaining young people is also the guarantee of their future consumption power. According to the head of a snack Unicorn enterprise in Hangzhou, there are great differences between different categories for brand sinking, such as snack upgrade products. The main audience is still the first-line and second-line city white-collar workers, who care more about independent packaging and quality. The sinking market is an incremental market in enterprise story telling. Their products will sink with tmalls small store and Jingdong convenience store, but their market share will be higher Not to the point of special attention. Their own offline stores are mainly experience stores, which are mostly opened in Hangzhou and the economically active prefecture level cities in the Yangtze River Delta.
Compared with high-end drinks and snacks enterprises, the sinking of clothing and sports brands seems to be more smooth. The 21st century economic reporter found in the interview that under the influence of e-commerce, the brands that open stores in the sinking market are paying more and more attention to opening experience stores, such as Xiaomi experience stores and apple experience stores in many prefecture level cities. American sports brand Skye has started the super store opening mode of one city one store in Chinas prefecture level cities.
Another star clothing brand that has opened a large store in the sinking market is Hailan home. In most cities and counties in the central and western regions, Hailan homes stores can be seen. Most of the stores are located in the central core area of the county, with a large area of stores, which seems to have a sense of quality in other clothing stores in the county.
With the popularity of e-commerce consumption, the experience advantages of offline stores are more and more obvious. According to Chen Weili, CEO of Skye China, there may be only one or two large shopping centers in the third and fourth tier cities, and the type of super stores is also more in line with local consumption habits and business models, which will be an important carrier of sinking. Including clothing, sports shoes, home appliances and other big store models in the sinking market are also increasing.
In an interview with the media, the head of a Jingdong home appliance store also said that after upgrading the traditional husband and wife store, the large store can reflect the scale effect. In addition to business needs and image display, large stores can display more brands and categories of products.
Xiao Xu, a civil servant working in Yichang municipal government, told 21st century economic news that Zaras first store in Hubei Province was in Yichang (later withdrawn due to commercial disputes), and fast fashion brands such as UNIQLO and HM had already opened stores in Yichang. The middle and high-end cosmetics SK-II, FANCL, Dior, etc. as well as Cartier, MCM, coach, etc. in the jewelry bag also have stores in Yichang. He also mentioned that SKECHERS, a sports brand he had bought in Wuhan before, also opened a factory in Yichang.
Yichang is the top three city in Hubeis economic volume, and also the most fashionable prefecture level city in Hubeis consumption habits. Xiaoxus summary of Yichang is fashionable but not fashionable. He believes that the brand sinking to the county and city has been comprehensively evaluated. The high-end luxury brand gives people a sense of luxury, but also a sense of distance. If it reaches all the cities and counties, apart from the cost, it will inevitably reduce the mystery and distance of the brand itself.
For example, Xu Xiaoxu said that some brands stores in China are mainly in first tier and second tier cities, which have a sense of distance for residents of third tier and fourth tier cities. However, when he went to Japan to buy Tiffany and Mikimoto, he found that these brands did not have the feeling of high-end display in domestic shopping malls, and the brand mystery and premium were much reduced in his mind.
For the sinking of sports brand, Chen Weili has more practical experience. He told 21st century economic reporter that in recent years, Chinas third, fourth and fifth tier cities have changed a lot. There are many small cities with mall, which is very suitable for them to open big store (experience store) mode. They opened three stores in longzhimeng, Shanghai, because they couldnt get a big position, but mall in the third and fourth tier cities has a big position, and developers also attach great importance to them.
A very different small city
Chen Wei used his experience in opening stores to emphasize that he must travel more to small cities in China. If Chinas big cities are more and more similar, small cities and counties are very different. A city in Henan where Xiao Chen is located belongs to a very traditional small city in the central and western regions, while a city like Yichang belongs to a prefecture level city with good consumption concept and economic strength.
Take coffee consumption as an example. At present, there are no Starbucks stores in many prefecture level cities in the central part of China. Most of the cafes ranked first in local public comments are restaurants that sell staple foods at the same time. But the total GDP of Yiwu, Zhejiang Province, is the same as Xiaochens hometown. As a county-level city, there are 11 Starbucks and coffee shops all over the business district. There are not a few coffee consumers who buy and go.
The head of 58 group told 21st century economic reporter that from the experience of expanding business from the same city to the same town, the gap between town and town is larger than that between town and town. Chinas counties and towns, especially the economically developed and densely populated southern provinces, have very active consumer markets such as automobiles and employment.
Some villages and towns have industrial clusters with relatively stable business characteristics, and the local recruitment demand is very strong; some villages and towns are mainly engaged in agriculture, and the relevant industries are arranged around the agricultural form, and the active users are mainly local people; some villages and towns are places with net population outflow, and the business form is very different. Its also a challenge to classify tens of thousands of distributed information in detail.
Xiaowen has the experience of developing o2o market in Yunnan and Sichuan, and he also shares similar experience. Compared with his hometown of Hubei and small eastern cities, the market development of Yunnan prefecture level cities has its distinct regional attribute. The main business of Jingdong home is to cooperate with the local supermarket. In some prefecture level cities in Yunnan, although the urban area is not large, most of them have Wal Mart and Carrefour, which are very popular. The consumption is concentrated in one or two big stores, while Jingdong and Wal Mart and Carrefour have national cooperation, and the business development is relatively smooth.
At present, Jingdong family has settled in Kunming, Qujing, Dali, Chuxiong and other cities in Yunnan. Except Kunming, the GDP of these cities in 2018 is between 100 billion and 200 billion, ranking the top six in Yunnan Province. The article introduces that when considering the citys settlement, they will first look at the macro data in the city statistical yearbook, including the macro-economic and demographic data, as well as the resources of local merchants and residents consumption.
According to Chen Weili, they have opened Skye stores in Yanan, Shaanxi Province and Jinhua, Zhejiang Province. They found that consumers in different regions have different purchase preferences and favorite styles.
Online and offline sales ratio tends to be stable
For the purchasing power and market situation in the western region, based on the analysis of Xiaowen, from the perspective of enterprise revenue alone, the market situation in Yunnan is even easier to make profits than that in the first tier cities. The biggest cost of o2o business is the human cost. The human cost in the small cities in Yunnan is lower, and the living consumption capacity is not low. In recent years, the consumption market in the central and western regions has grown rapidly.
For the online purchasing power of the sinking market, Xiaowen believes that the online penetration rate is still increasing from the perspective of the o2o business of fresh food merchants. If we look at the data of the first and second tier cities, the online share may not grow as fast, but the penetration rate of the central and Western regions is lower and the base number is also small, so the online sales share growth rate is very fast.
In recent years, e-commerce has penetrated into the fresh o2o business rapidly, and the proportion of online and offline sales of sports footwear and clothing products has become more stable. Chen Weili said that according to their research, scacci is now stable online and offline. At present, what they are doing is to get through all channels as soon as possible, that is, online and offline. Offline stores are also opening up the mode of big stores, focusing on offline shopping experience.
In 2018, the total retail sales volume of SKECHERS in China reached 14.1 billion yuan, up 36% year on year, and more than 19 million pairs of shoes were sold. The price of SKECHERS products is within the consumption capacity of the third and fourth tier cities, between domestic brands and other international brands, and they sell well in the low tier cities.
Xiao Chen, who works in an institution in a prefecture level city in Henan Province, said that many young people in the third and fourth tier cities do not have the pressure of housing loans, it is common for parents to buy houses for their children in full, and many families share the cost of raising children. She and her husband both work in public institutions. The house and car are all purchased before marriage. Although the monthly family income is only about ten thousand yuan, the cost of childrens schooling and milk powder are borne by her parents in law. She also has extra rent income and store share income. Whether its online or offline consumption, people who do business in small cities generally mentioned that at present, the biggest problem of small cities in central and Western China is that the number of young people is not large enough. Whether its the sinking of Internet enterprises or from the perspective of urban development, its necessary to retain and attract young talents. Source: responsible editor of 21st century economic report: Yang Zeyu
Xiao Chen, who works in an institution in a prefecture level city in Henan Province, said that many young people in the third and fourth tier cities do not have the pressure of housing loans, it is common for parents to buy houses for their children in full, and many families share the cost of raising children. She and her husband both work in public institutions. The house and car are all purchased before marriage. Although the monthly family income is only about ten thousand yuan, the cost of childrens schooling and milk powder are borne by her parents in law. She also has extra rent income and store share income.
Whether its online or offline consumption, people who do business in small cities generally mentioned that at present, the biggest problem of small cities in central and Western China is that the number of young people is not large enough. Whether its the sinking of Internet enterprises or from the perspective of urban development, its necessary to retain and attract young talents.