China Usage of Appliances and Devices in Lower Tier Cities Market Report 2022
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Report Summary
“Overall, consumers in lower tier cities are ‘light on concepts, heavy on practicality’ when it comes to home appliances and digital products. They have higher expectations for the long-term quality and durability of consumer durables such as home appliances and mobile phones. At the same time, they desire functionalities that integrate with life scenarios to address practical details and pain points and help care for every member of the family. Brands can show consumers how their products can be applied in real-life scenarios through a more down-to-earth approach, both in terms of channels and marketing, to convey a sense of value for money.”
– Frank Zhang, Senior Research Analyst
Key issues covered in this Report:
- Purchase occasions for major domestic appliances: looking for reasons to buy without hesitation
- Purchase occasions for small household appliances: an important source of ‘little bliss’
- Smart upgrade scenarios: not upgrading just for the sake of it
- Purchase occasions for smartphones: not seeking the best but the most suitable
Table of Contents
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Overview
- What you need to know
- Key issues covered in this Report
- Objective and methodology
- Quantitative research methodology
- Figure 1: The sample structure for each city is as follows:
- Qualitative research methodology
- Figure 2: Interviewed cities in the qualitative research
- Figure 3: Profiles of respondents to the qualitative research
- What you need to know
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Executive Summary
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- The market
- Mid-late-stage urbanisation spawns new challenges and opportunities for industrial structure development in lower tier cities faces
- Figure 4: GDP sector composition, by city tier, 2018-20
- COVID-19 outbreaks affect the consumption environment in lower tier cities more greatly than tier 1 cities
- Figure 5: Total retail sales and year-on-year growth rate of consumer goods, by city tier, 2018-20
- Lower tier city consumers tend towards conservative consumption behaviours despite limited immediate impact of the outbreak
- Financial confidence declines in lower tier cities, with the prospect of a steady rebound ahead
- Figure 6: Confidence in improving future finances – very confident/somewhat confident, by city tier, 2020-22
- The consumer
- Purchase occasions for major domestic appliances: looking for reasons to buy without hesitation
- Figure 7: Trading up and down in home appliances – selections combined, by age, 2022
- Purchase occasions for small household appliances: an important source of ‘little bliss’
- Figure 8: Purchase demand for home appliances in the next three months, by age, 2022
- Smart upgrade scenarios: consumers don’t upgrade just for the sake of it
- Figure 9: Smart home devices purchase motivation, by age, 2022
- Purchase occasions for smartphones: not seeking for the best but the most suitable
- Figure 10: Frequency of mobile phone replacement, by age, 2022
- What we think
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Introduction to Lower Tier Cities in China
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- Mid-late-stage urbanisation spawns new challenges and opportunities for industrial structure development in lower tier cities faces
- Figure 11: GDP sector composition, by city tier, 2018-20
- COVID-19 outbreaks affect the consumption environment in lower tier cities more greatly than tier 1 cities
- Figure 12: Total retail sales and year-on-year growth rate of consumer goods, by city tier, 2018-20
- Real income growth slowing down in lower tier cities
- Figure 13: Per capita annual salary, by city tier, 2018-20
- Proportion of single, unmarried people in high-income groups in lower tier cities is approaching that of tier 1 cities
- Figure 14: Family structure of respondents, by city tier, 2019-June 2022
- Car ownership and gym membership penetration rates comparable to tier 1 and tier 2 cities
- Figure 15: Car ownership and gym membership, by city tier, 2017-June 2022
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Market Factors
- Lower tier city consumers tend towards conservative consumption behaviours despite limited immediate impact of the outbreak
- Figure 16: Impact of COVID-19, by city tier, 2022
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- Figure 17: COVID-related actions in future, by city tier, 2020 vs 2022
- Financial confidence declines in lower tier cities, with the prospect of a steady rebound ahead
- Figure 18: Confidence in improving future finances – Very confident/somewhat confident, by city tier, 2020-22
- Home appliances leading trading up in various categories, while commercial centres march into lower tier market
- Lower tier city consumers tend towards conservative consumption behaviours despite limited immediate impact of the outbreak
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Purchase Occasions for Major Domestic Appliances: Looking for Reasons to Buy Without Hesitation
- Peace of mind is more important when buying online and offline
- Figure 19: Purchase channel selection for major domestic appliances – interview excerpts, 2022
- Figure 20: Recommended by friends when buying major domestic appliances – interview excerpts, 2022
- Local brand advantages have become the consensus, with energy saving and environmentally friendly features as standard
- Figure 21: Brand perceptions and preferences for major domestic appliances – interview excerpts, 2022
- Figure 22: Energy saving in home appliances – Interview excerpts, 2022
- Demand for home appliance upgrades emerges as young people look to improve quality of life at home
- Figure 23: Trading up and down in home appliances (selections combined), by age, 2022
- Middle-aged consumers’ need to buy ‘big items’ to improve the household standard for the whole family deserves attention
- Figure 24: Purchase plan for home appliances in the next three months – plan to buy* (by age), 2022
- Emotional links evoke the need for quality of life for the whole family
- Figure 25: Haier “Not Fresh Supermarket”, 2022
- Enhancing marketing impact through creative interaction
- Figure 26: Midea x JD ‘618’ Air Conditioner Trade-in Campaign
- Peace of mind is more important when buying online and offline
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Purchase Occasions for Small Home Appliances: an Important Source of ‘Little Bliss’
- Small home appliances come with labour-saving benefits and social attributes
- Figure 27: Regarding the usage of small home appliances – interview excerpts, 2022
- Detailed functional ‘small ideas’ to improve the satisfaction level of small home appliances
- Figure 28: Satisfaction with small home appliances – interview excerpts, 2022
- Young people’s expectations of happiness through small home appliances deserve attention
- Figure 29: Purchase demand for home appliances in the next three months, by age, 2022
- Pursuing an efficient, healthy and enriching kitchen experience through small home appliances
- Figure 30: Purchasing drivers for small kitchen appliances – selected items, by age, 2022
- Small home appliances with ‘self-cleaning’ feature solve pain points precisely
- Figure 31: Joyoung Y1 Self-Cleaning Multifunctional Cooking Blender, 2022
- Small home appliances, good food and beautiful scenery create the ‘desired life’
- Figure 32: Bear Electric Appliance ‘Earthy Food Show’, 2022
- Small home appliances come with labour-saving benefits and social attributes
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Smart Upgrade Scenarios: Consumers Don’t Upgrade Just for the Sake of It
- Smart features should be more ‘useful’ than ‘cool’
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- Figure 33: Regarding smart home appliances – interview excerpts (Positive comments), 2022
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- Figure 34: Regarding smart home appliances – interview excerpts (negative comments), 2022
- Smart features catering for the elderly and children could be a breakthrough point
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- Figure 35: Smart appliances and the usage experience of the elderly and children – interview excerpts, 2022
- Smart home intelligence in lower tier cities calls for both ‘safety’ and ‘reducing the burden’
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- Figure 36: Smart home devices purchase motivation, by age, 2022
- ‘Compatibility improvement’ becomes a major challenge for the smart home industry
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- Figure 37: Share of agreement with negative statements about smart homes – selected items, by age, 2022
- ‘Fascinating’ scenario-based communication ‘simplifies’ smart technology
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- Figure 38: Midea’s Smart Home Active Intelligence ‘Slacking off’ Marketing campaign, 2022
- Smart upgrade with automation and health at its core
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- Figure 39: Mi Robot Vacuum-Mop 2 Pro, 2022
- Smart features should be more ‘useful’ than ‘cool’
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Purchase Occasions for Smartphones: Not Seeking the Best but the Most Suitable
- Strong correlation between usage habits and the decision to buy a replacement
- Figure 40: Smartphone replacement – interview excerpts, 2022
- Hardware upgrades are not about the specifications but about the actual ‘sense of value’
- Figure 41: Mobile phone replacement considerations – interview excerpts, 2022
- Consumers in lower tier cities demand more durability from their products
- Figure 42: Frequency of mobile phone replacement, by age, 2022
- Performance and specifications are essential requirements, while the younger generation’s needs for appearance and picture taking cannot be ignored
- Figure 43: Top three mobile phone purchase motivators – selected items, by age, 2022
- ‘Longer lifespan’ to attract consumers looking for a longer usage period
- Figure 44: OnePlus launched ‘Long Life Version’ SuperVOOC charging technology, 2022
- Using the ‘no-filter’ practical experience to demonstrate the pursuit of product detail
- Figure 45: VIVO X Fold+: Benny Sa’s One Day Experience, 2022
- Strong correlation between usage habits and the decision to buy a replacement
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Appendix
- Abbreviations
- Interviewees’ photos
- Abbreviations
About the report
This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.
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