unt for about 20 percent of the total, but they have quadrupled in the past two years.
“If you can prove to small-town youths that the products are useful, they are willing to pay,” Lan said. “Some inno
vative Saky products have also seen rapid growth in lower-tier markets, including one that removes stains from teeth.”
Chen, from Roland Berger, said that while small-town youths are narrowing the gap with their count
erparts in bigger cities in many ways, they still have many distinct demands. If companies want to win t
hem over, it is important for them to have a deep understanding of lower-tier markets and to draw up strategies acc
ordingly, whether in building brand awareness, or providing specialized products and distribution channels.
For example, while helping a jewelry company to access lower-tier markets, he found tha
t jade inlaid with gold is very popular, although it is considered unfashionable by consumers in large cities.
organ Stanley China, said this age group will be a main driver of the consumption upgrade in the next decade, with consum
ption in third- and fourth-tier cities expected to reach 45 trillion yuan in 2030, compared with 15 trillion yuan in 2017.
There were estimated to be about 112 million small-town youths in
China last year, according to mobile internet industry consultancy iiMedia Research.
Chen Ke, a senior partner with global consultancy Roland Berger, said that with lower housing prices in third- and fourth-tier c
ities, small-town youths have sizable disposable income and are more willing to spend a larger proportion of th
eir income on daily consumption, compared with people of the same ages living in bigger cities.
“They also have an increasing desire to live a better material and spir
itual life, are becoming more interested in personal products and are more willing to sp
end on entertainment and hobbies, as they have more spare time than their peers in big cities,” he said.
niscent of local experiences, artistic and portable. “The souveni
r market is huge and growing, given the expanding Chinese middle-inc
ome population and consumers’ increasing purchasing po
wer. But to earn money in this market, souvenir-makers should do a much better job.”
China has the world’s largest and fastest-growing middle-income group (more than 400 m
illion, or 140 million families as of 2017), said Ning Jizhe, head of the National Bureau of Statistics, in January.
Their annual family income is between 100,000 yuan and 500,000 yu
an. This enables them to buy cars, properties and tourism packages, Ning said.
“Many im2pulsive purchases will be made during travels, either for self or to gift to relatives and friends,” said He.
trial park’s output would be 2 million units of refrigerators, 1 million units of LED TVs, 1
million units of washing machines and 1 million units of air conditioners annually.
The park will also generate around 14,000 jobs after the first Haier manufacturing plant create
d some 12,000 jobs in Pune, an industrial city in the southwestern state of Maharashtra, company sources said.
Having closed the year 2018 with a total turnover of 3,800 crore Indian ru
pees (around $543 million), the global brand is currently at No 5 in terms of sales in Ind
a, and yearns to be among the top three brands by the next year, company sources said.
“India is a big market for us and we would like to continue to invest here in manufact
uring and simultaneously design technological innovations specifically for our Indian consumers,” sai
d Song Yujun, Haier’s vice-president and managing director for South Asia operations.