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By Angie, April 20, 2010 3:19 pm

Following up on my article about China’s Ant Tribes (click here for a refresher), groups of Chinese youth have become so fed up by the rat race and broken dreams found in Beijing and Shanghai that they are leaving and settling for smaller towns, where they being are offered a cushy start.

While the top tier cities have lured youth with projections of lucrative paychecks, career opportunities and a fast paced lifestyle, many youth are quickly discovering that the reality is nothing like what they had imagined.

Earlier this year, I conducted an in-home interview with a 25-year-old in Shanghai who moved there from his tier 3 city hometown.  Living with his girlfriend in a single room containing only a double bed (that filled 90% of the room) and a computer, their possessions were meager.  Studying in Shanghai was his dream – his first step to becoming a successful graphic designer.  In order to pay rent (and to keep his computer up-to-date) he works at a restaurant every night, including weekends.  “It’s really hard and not what I thought it would be,” he told me, “but I am staying because I have hope that it will get better.”

Youth living & working in Shanghai. Copyright - Starcom 2010

A May 2010 United Nations report stated that from 1980 to 2010, China’s urban population had more than doubled, expanding from 19% of China’s total population to 47%… and growing.

But not everyone is willing to stay and many have given up their big city dreams, seeking their fortunes elsewhere.  One of those places is Ningbo, a port city in eastern Zhejiang province (and home to the handsome beggar!), which will give housing subsidies ranging from 500,000 to 1.5 million yuan to qualified professionals.  Other growing cities like Tianjin, Dalian and Qingdao also offer flexible residency permit policies, which enable access to health care, home purchasing and education.

One reason why young and educated graduates would even consider these cities is because many companies have also discovered their appeal.  For many companies, big cities equal higher operating costs and competition, whereas smaller cities with a developed infrastructure may be just the answer.  For example, Microsoft and Boeing have both set up outsourcing delivery centres in Wuxi, Jiangsu province (a tier 2 city).

Young Chinese professionals

What this means for marketers

With the growth (and expected continued growth) of lower city tier economies – due to the modernization of city infrastructure, their appeal to major companies, and their poaching of professionals and new grads – it is absolutely crucial for marketers to place considerable resources into researching and studying lower city tiers.  We must start looking beyond tier two and three cities and venture into tier four (e.g Quan Zhou 泉州) and even tier five cities (e.g. Shan Tou 汕头).

Also, an influx of sophisticated consumers into lower city tiers may require marketers to re-evaluate their consumer messaging and campaigns, and to consider the dynamics of dual messaging within a single market.

Lower city tiers are an exciting frontier for marketers for its large and untapped consumer base, rising incomes, and consumer aspirations.  Understanding this group – their thoughts and motivations – is the challenge.

Come visit Starcom China Blog again on Thursday, where I will continue our lower city tier discussion and dig deeper into what we have learned about these consumers!

Tier 3 little one and grandfather

Comments (1)

By Angie, March 11, 2010 6:10 pm

Starcom recently organized a very immersive experience in Beijing, focusing on the dynamic force that is Chinese youth.

Chinese youth are complex individuals.
On one hand, they grew up as ‘little emperors’, basking in the sole love and attention of not only their parents, but their grandparents as well.  But on the other hand, being single-children puts an extreme pressure on their shoulders, as they are acutely aware that they must take on the burden of caring for their parents financially in the future.

This brings about their need-to-succeed mentality, where failure is not an option.  Those with lofty dreams of being a singer, artist, etc., feel the need to put these dreams aside and concentrate on practical studies, as their end-goal is financial well-being, and others are depending on their success. This forces Chinese youth to grow up really quickly and to adopt a mentality mature beyond their years.  They understand the nature of China’s extremely competitive work environment and will do anything to make themselves stand out amongst the millions of youth, for they know that experience is currency.  This includes learning as much as possible, exposing themselves to new situations, taking on internships, networking, volunteerism…

Their other world – an online one – encompasses everything: their escape, their way of learning, their entertainment, their connections with others… their life.  They have taken the naturally existent off-line culture of community, and have transferred the feelings of community, trust, and cooperation into their online world.

Through Starcom’s Youth Surveillance research, 85% said they would be lost without the Internet and 96% say “The Internet is my life”.  Also, a whopping 41% say they are able to, and will, access the Internet on their mobiles.  This shows their dependence and love for the Internet, as no matter where they are, they will seek it out. This heavy usage translates to brand knowledge, as they welcome company messaging and visit brand sites often (84%).  Nowhere is eWOM as prevalent and as powerful as it is in China.

*****

We were fortunate to have three wonderful youth share their lives with us.  Here is a brief re-cap of their talks.  I will highlight the key themes emerging from each story.

Youth #1’s Story

As a first-year university student, she spoke of leaving home for the first time and exploring her exciting new university life.  She joined activities such as drama productions, sports, and dance.  She also started her first relationship.  It was a breaking-free experience for her, where she came into herself and did the things she had always wanted to do – “No worries, no restrictions.  It’s a paradise for me”.  However, receiving her dismal first year grades was a wake-up call and she is determined to study hard in order to buy her family a big house, her father a luxury car, and her mother beautiful cosmetics.

Youth #2’s Story

This ambitious 3rd year university student decided to take on a double major upon attending his first job fair in first year.  He saw the intense competition and knew that in order to beat out the rest of the students, he had to continuously improve himself.  This led to him learning languages, reading countless books, applying for internships, volunteering and networking galore.  He is an experience collector, with the thought that every experience will make him a better person.

Youth #3’s Story

A native of Shenzhen, she moved to Hong Kong for university and then to Beijing for work.  She is working at her first job, an editor at a publishing house, and is an amateur photographer and filmmaker.  Her offline and online worlds are seamlessly integrated.  From learning of different venues online and checking them out offline, to making friends on douban.com with the same interests as her and actually meeting them in person and becoming fast friends, she is a shining example of how Chinese youth have embraced the Internet and the amount of trust they put into it.

*****

As you can see, the Chinese youth population is not homogenous and as a vast and ever-changing group, understanding youth requires learning about them not only as a whole, but also to recognize the complexities inherent within them.

As marketers, we need to figure out what our “social currency” is with these youth, and what we are going to deliver beyond our product that will make it worthwhile for them to deliver against our brands.