There is no doubt that technology drives the development of human society; while each general consumer is more likely to expect technology products that can make some changes to their daily lives, so too does every consumer from lower tier cities. Even considering the impacts brought by COVID-19, consumers from lower tier cities maintain great interest in high-end digital products. Technology products in the market are highly homogenised, and consumers from lower tier cities are fully aware of the large gap between products with higher and lower configuration. As a result, they would be more likely to prioritise specifications rather than brands and are more willing to pay more for products with high configuration and branded flagship series.

Through quantitative (based on the quantitative data from multiple Mintel reports in 2019 and 2020) and qualitative research (based on in-depth interviews with 10 respondents from 10 tier three or lower cities), this Report analyses the differences in consumer behaviour and attitudes in different city tiers. It examines lower-tier-city consumers’ information sources and purchasing channels of technology products consumption as well as their key needs of technology products and their impressions on different brands. This Report also explains, to technology brands, what strategies would effectively increase their competitiveness in lower tier cities using a series of cases.

• Sources of technology-related information

• Purchase channels for technology products

• Needs for choosing technology products

• Impressions of technology brands

• Consumption of smart home devices

According to NBS, there were 672 cities in China at the end of 2018, among which 297 are prefecture level, and 375 are county level. As Mintel clients have an interest in multiple different aspects (region, city size), Mintel selects different cities for each round of surveys considering their geographical location and level of economic development (eg GDP, per capita income). Mintel classifies China's cities according to the following criteria:

• Tier one cities: large economic centres, ie Beijing, Shanghai, Guangzhou, Chengdu*

• Tier two cities: provincial capitals (eg Jinan), municipalities (直辖市) (eg Tianjin, Chongqing), and economically developed prefecture-level cities (eg Suzhou, Dalian)

• Tier three or lower cities: mostly prefecture-level cities (eg Weifang, Ganzhou and Pingxiang)

* Mintel chooses Chengdu to represent tier one cities in Midwest China for the purpose of regional comparative analysis

Through quantitative (based on the quantitative data owned by Mintel collected from 2018 to 2020) and qualitative research (based on in-depth interviews with 10 respondents from 10 tier three or lower cities), this Report compares and analyses consumer behaviour and attitudes in different city tiers. Meanwhile, the Report further explores effective strategies for companies to improve their competitiveness in lower tier cities by analysing cases.

Quantitative consumer research data was collected from various Mintel Reports over 2019-20. The consumer research exclusively commissioned for China Reports was conducted by a Chinese licensed market survey agent, KuRunData. The online consumer survey was sampled in 10 cities, each with a sample size of 300 people, totalling 3,000 people.

To explore the ‘why’ behind the quantitative data, Mintel conducted in-home or online interviews with 20 respondents from 10 lower tier cities listed below. Each in-home visit lasted for about one hour, with a moderator doing in-depth interviews with respondents to understand their lifestyles, purchase preferences and the factors that influence them.

Figure 2: Interviewed cities in the qualitative research

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Source: Mintel

In the qualitative research, Mintel selectively recruited affluent and educated respondents aged 25-39, who have a personal income of RMB6,000-10,000 if single, or a household income of RMB14,000-25,000 if married. These respondents are more sensitive to market trends and better able to express their opinions. This ensures the smooth running of the research and is critical to getting meaningful insights.