The “market outside the fifth ring road” | the other China

The “market outside the fifth ring road” (wuhuanwai shichang), referring to a Beijing orbital highway that draws a mental line between metropolitan China and the land beyond, is a very different market than the cosmopolitan urban China market.

Interest in this “other China” has grown in recent years with the rise of budget e-commerce platform Pinduoduo. Over 65% of its users come from third-tier cities and beyond, where incomes of less than RMB 3,500 (about $522) per month are the norm. Many users are new to e-commerce, stimulated by growing incomes, smartphone penetration, and 4G coverage.

As Pinduoduo CEO Colin Huang put it last year: “The new consumer economy isn’t about giving Shanghainese the life of Parisians. It’s about providing paper towels and good fruit to people in Anhui,” referring to a largely rural inland province. Alibaba has also got in on the act, launching a low-price shopping platform called Taobao Tejia.

It is a huge market with different consumer characteristics; less budget and more time. Pinduoduo has played these characteristics well tapping budget-savvy consumers’ ample time spent shopping and socializing through for example group discounts. Damas (“big mamas”) in Chinese small towns spend hours searching out bargains and rallying friends to save a few yuan on washing powder.

Younger peers in first-tier cities probably wouldn’t bother. Indeed, most apps for metropolitan China come with the underlying promise to help you save time (or at least feel like it); apps for chores, errands, getting around and planning your life.

The other China; a new market in fast development !

Source : technode