Thursday, May 24, 2012

High Growth Opportunities in China Tier Two Cities

Adventurous technology marketers looking for new territory to explore should consider Tier 2 cities in China -- such as Chengdu and Sichuan, according to the latest market study by International Data Corporation (IDC). Growing Tier 2 cities are exploding in terms of growth and this growth is coupled with a very high proportion of savvy consumers -- indicative of the exponential upside for digital tech companies.

IDC's research program has identified six distinct consumer market segments: Tech Evangelists, Impulse Buyers, Experimental Adopters, Pragmatic Purchasers, Green Buyers, and Disengaged Functionalists.


Tech Evangelists not only own the most devices and utilize the most advanced functions, features and apps, they are also the group that drives adoption of device ownership and usage by other market segments.

Tech Evangelists hold enormous sway over the buying patterns and device usage trends mass-market segments exhibit. They are also the group that mainstream market segments reach out to directly for purchasing advice.

"Given the extremely large combined population of Tier 2 cities in China, coupled with a very large proportion of Tech Evangelists, marketers should place Tier 2 cities as a key priority for all consumer-facing brands, vendors, and data service providers," said Michael DeHart, director of the IDC Global ConsumerScape 360 program.

Tier 1 cities in China should no longer be viewed as emerging markets. These are mature economies with some of the largest populations in the world -- bigger than many small countries."

Tier 2 cities are currently exploding in terms of growth in China, and are now showing an extremely high level of Tech Evangelist consumers, indicative of continued exponential growth in these markets. And, while Tier 2 cities in China account for about 8 percent of the population of China, they account for about 59 percent of U.S. imports, according to the U.S. Commercial Service.

This is critical information for PC, smartphone, tablet, and software vendors. "If you can reach this group successfully, you'll see exponential ROI implications. By comparison, this level of Tech Evangelists in tier 2 cities - 41 percent - is higher than the rate of Tech Evangelists in any country that we currently track in ConsumerScape 360°," says DeHart.

Tier 2 cities and provincial capitals in China include, but are not limited to Chengdu, Sichuan, Chongqing, Dalian, Liaoning, Hangzhou, Ningbo, Zhejiang, Kunming, Yunnan, Nanjing, Suzhou, Jiangsu, Qingdao, Shandong, Tianjin, Shenzhen, Zhuhai, Guangdong, Wuhan, Hubei, Xiamen, Fujian, Xi'an, and Shaanxi.

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