The “Other” 500M People in China

14 Jul
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By Max Klein | Tuesday, July 14, 2009

You ask any average Joe / Jane their first impressions of China and it will invariably take root in one of the country’s largest, first-tier cities.  You think of China, you think of Beijing, Shanghai, and MAYBE Guangzhou. After all, if an airplane is your preferred mode of international travel, there are far fewer flights from London to Zhengzhou (the second-tier capital of China’s Henan Province, with a mere population of 7 million) than there are to Shanghai or Guangzhou.

For me, like many other foreign students, I formed my first impressions of China in the university district in Beijing’s bustling northwest district, Haidian, where upwardly mobile college students from around the country seized at every opportunity to learn, interact, and carve out their niche in one of the world’s most exciting and, increasingly competitive, mega metropolises.

I remember walking down the streets and both Western and Chinese brands shout at you from left and right in the big city: following you through the tunnels on the subway, talking to you in the backseat of a Beijing taxi, waving to you from a brilliantly-colored public bus billboard.  The presence of Chinese brands Yili and Mengniu placards alongside those of Nike and Coca-Cola are the only clues that indicate you’re not wandering through Times Square or down Michigan Avenue.

But as most people find out during their first excursion outside China’s first-tier cities, the Peoples’ Republic of China is more than the modern skylines and cutting-edge transportation grids.  I can guarantee you that there’s a China out there that is its own separate world. Despite one of the largest urban migrations in history taking place in China today, 37% of China’s population still lives in what are considered fourth- to sixth-tier cities. That’s 37% of 1.3 billion people. You do the math and that amounts to approximately 481 million people. That’s more than the population of the entire United States. Now, when a company contemplates its marketing strategy in ‘China,’ which ‘China’ are they most worried about, the first- to third-tier China, or the fourth- to sixth-tier China?

Let’s depart ‘China-Lite’ (Beijing, Shanghai, Guangzhou, Tianjin, etc.) for a mind-bending journey to the hinterland, the fourth- to sixth-tier cities, where an unprecedented battle for brands is taking place.  It’s a place few business travelers dare to go because of its daunting complexity and outwardly apparent disorder and ambiguity.  It’s difficult enough to wrap your head around China’s big cities, but if you can develop a strategy for more outlying areas the potential benefits are tremendous.  After all, isn’t Chinese consumerism supposed to be the fledgling world economy’s savior?  Go get your share!

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