Table of Contents
Executive Summary
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- Lower tier cities are less proactive in health management
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- Figure 4: Factors important to achieving a healthy lifestyle – select factors, by city tier, July 2019
- Technology could be a way to nudge them into healthier behaviours
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- Figure 5: Attitudes towards health tech – “It's necessary to arrange diet and exercise according to daily monitoring of physical conditions (eg the amount of exercise, sleep quality)”, by city tier, July 2020
- Lower tier cities more concerned about compromising on taste in a healthy diet
- Simple, direct messages and powerful visual clues are key
- Personal branding rather than quality of information establishes credibility
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- Figure 6: Attitudes towards social commerce channels – select statements, by city tier, October 2018
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- Figure 7: Health information sources – select sources, April 2020
- Aftersales service is an important reassurance when expanding channels to market
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- Figure 8: Grocery shopping channels – select grocery categories, select channels, by city tier, September 2019
- What we think
Introduction to Lower Tier Cities in China
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- Population and spending power
- Spending by Tier 3 and lower cities increases and takes a larger share
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- Figure 9: City populations and sales, by city tier, end of 2018
- Per capita disposable income and spending power grows
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- Figure 10: Per capita salary vs per capita retail sales, by city tier, 2018
- Spending confidence since the COVID-19 outbreak
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- Figure 11: GDP sector compositions, by city tier, 2018
- Figure 12: Changes in financial status, percentage of respondents claiming they are ‘better off’, by city tier, Apr-Jul 2020
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- Figure 13: Confidence in improving future finances, very confident/somewhat confident, by city tier, Apr-Jul 2020
- Demographic profile/analysis
- Gaps between city tiers narrowing in both economic and educational respects
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- Figure 14: Educational level of surveyed respondents, by city tier, 2017- June 2020
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- Figure 15: Car ownership and gym membership, by city tier, 2017- June 2020
Impact of COVID-19 on Food and Drink Spending
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- Evident increase in in-home food spending across all tiers
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- Figure 16: Changes in spending – “Food (in home)”, “Spent more”, by city tier, February-November
- Fresh fruit and meal solutions saw the biggest volume update
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- Figure 17: Changes to consumption of select food and drink categories after COVID-19 – “Bought more”, by city tier, Apr 26-May 2
- Dairy products lead trading up
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- Figure 18: Changes in food and drink categories after COVID-19, % spent more, by city tier, May 27-Jun 3
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- Figure 19: Changes in consumption frequency of packaged bakery foods – select sub-categories, by city tier, January 2020
The Consumer: Attitudes towards Health
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- Quantitative data suggests no difference in defining what is needed to achieve good health
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- Figure 20: Factors important to achieving a healthy lifestyle – by city tier, July 2019
- However qualitative research reveals lower tier city consumers still spontaneously associate health with a lack of illness
- Reconciling quantitative and qualitative findings
- Barriers to achieving a healthy lifestyle differ
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- Figure 21: Factors important to achieving a healthy lifestyle – select factors with biggest difference, by city tier, July 2019
- Strong interest in knowing more about health drives adoption of technologies
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- Figure 22: Attitudes towards health tech – “It's necessary to arrange diet and exercise according to daily monitoring of physical conditions (eg the amount of exercise, sleep quality)”, by city tier, July 2020
- What it means for brands
- Creating a community to help consumers focus on holistic health
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- Figure 23: Keep forum “Showcase your nutritious breakfast”
- Using wearable technology to identify health issues and provide management plans
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- Figure 24: Screenshots of different services provided by the Boohee app
Attitudes towards Healthy Eating
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- Other than meat consumption, consumers show broadly similar understanding of a healthy diet
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- Figure 25: Features of a healthy diet, by city tier, August 2020
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- Figure 26: Features of a healthy diet – “Controlling consumption of meat”, by city tier, August 2020
- Lower tier city consumers are more likely to associate a healthy diet with compromising on taste
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- Figure 27: Cooking methods used – “Meat (excluding seafood and freshwater food)”, by city tier, September 2020
- Availability may be an issue restricting healthy eating
- What it means for brands
- Create minus-claims without compromising on taste
- Use “healthy” ingredients to offset indulgent products
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- Figure 28: Infographic on Chocday quinoa dark chocolate
- Leverage developments in new retail to increase availability
Attractive product features
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- What difference does quantitative data suggest
- Simple clues are more likely to appeal to residents of lower tier cities
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- Figure 29: Attractive features of a light meal – select features, by city tier, November 2018
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- Figure 30: Superior aspects of chilled drinks – select aspects, by city tier, December 2019
- Premiumise with formal proof of sourcing
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- Figure 31: Interest in premium features of food and drink products, August 2020
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- Figure 32: Interest in premium features of food and drinks product – “Organic certification”, by city tier, August 2020
- Why the difference as suggested by qualitative research
- Provide clear labelling to help consumers interpret complicated nutritional data
- Clean sourcing and freshness are key determinants of healthy ingredients
- Using innovative ways to prove quality of product
- What it means for brands
- Simplified message and visual guidance are more persuasive
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- Figure 33: Kellogg’s cereal infographic
- Figure 34: Classy Kiss Bifidobacterium C-I Flavored Yogurt, China, 2020
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- Figure 35: Yogurt product consumed by female, 29, Shanxi Xianyang
- Transparent tracing systems can help brands prove their authenticity
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- Figure 36: Screenshot of infant milk formula traceability WeChat mini program
- Offer visual clues to prove quality of product
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- Figure 37: Hormel beef jerky product description page
- Figure 38: Wonderful Pistachios product packaging
Trust in Authority
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- Generally higher trust than those in Tier 1 cities
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- Figure 39: Attitudes towards social commerce channels – select statements, by city tier, October 2018
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- Figure 40: Health information sources – select sources, by city tier, April 2020
- Trust is dependent on the information source rather than the quality of information
- Government-backed or public figures with positive images are strong reassurance
- What it means for brands
- Establish authoritative personal brand of the founder
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- Figure 41: Cai Lan Hua Hua Shi Jie infographic
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- Figure 42: Huang Xiao Chu official Tmall store cover photo
- Team up with specialized authority figures to establish trust
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- Figure 43: Infographic highlighting Dingxiang Doctor collaboration
Channel Preferences
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- Even though online penetration is high, offline still plays an important role in lower tier
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- Figure 44: Grocery shopping channels – select grocery categories, select channels, by city tier, September 2019
- Choices limited by different levels of retail development
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- Figure 45: Premium food and drink purchase channels – select channels, by city tier, February 2019
- Trust in quality and value-added services drive offline shopping
- What it means for brands
- Aftersales service guarantee is an important quality assurance
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- Figure 46: Consumer feedback on Chicecream apology package
Appendix - Abbreviations
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- Abbreviations
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