Top brands "go to the countryside" and "hunt" for wealthy women in county towns

"Top brands are sinking, and county consumption is rising." In the new pattern of the consumer market, the group of wealthy women in county towns is gradually emerging. Their consumption power and preferences are attracting the attention of many top brands. Behind this phenomenon is the vigorous development of the county economy and the profound changes in the consumption structure.

Some time ago, Beibei, a post-85 generation who had been drifting in Beijing, took some time to return to his hometown, a small city in western Gansu.

She found that her old classmates who stayed in their hometown had another wave of "food, clothing, housing, transportation and daily necessities":

Luna, who is in her early 30s and runs a clothing store, changed her mode of transportation from BMW to NIO, saying that it is now popular to drive domestic high-end electric cars.

Li Li, whose whole family are civil servants, plans to have a second child next year. Worried that the previous house is not big enough, she recently bought a large flat of more than 20 square meters.

Sister Qin, a second-generation demolition worker, loves Sam's Club's durian lasagna so much that she drives 100 kilometers every week to buy it.

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In 2024, it seems that no group is more valuable than the "ladies in county towns". "Lululemon is targeting the ladies in county towns" and "those who earn 20,000 yuan a month do not live as freely as the ladies in county towns" are not jokes, but the norm.

1. County ladies take the “C” position on the consumption stage

"The hurricane of consumption downgrade seems to have not hit my hometown," Beibei sighed.

In the small city where Beibei is from, the per capita disposable income of urban residents will be only 37,535 yuan in 2023, less than half of that in first-tier cities such as Beijing, Shanghai and Guangzhou. In 2023, the per capita disposable income of the three cities of Beijing, Shanghai and Guangzhou will be 81,572 yuan, 84,834 yuan and 75,000 yuan respectively.

But when it comes to the way they take out their wallets, her girlfriends in Beibei's hometown are much more generous than her.

Here, the core places for eating, drinking and having fun are Wanda Plaza, Starlight Shopping Center, Pedestrian Street and other business districts.

During the day, I accompanied my parents on a "city walk". My biggest impression of Beibei was that the products are no different from those in Beijing, Shanghai and Guangzhou, but the popularity is much higher than that in Beijing, Shanghai and Guangzhou, and the local residents dare to spend money and buy high-priced goods. On the first floor of Xingguang Shopping Center, Heytea and Mixue Ice City each occupy diagonal corners, and there are long queues in front of the ordering machines.

When it comes to dining options, the old folks are also willing to pay a premium for big brands - the average order value of Haidilao easily exceeds 100 yuan per person, while the mainstream order value of other unknown hotpot restaurants is concentrated between 50 and 70 yuan per person. However, Haidilao, located on the fourth floor of a shopping mall, is bustling with people, and customers who want to enter the store have to wait in line.

Moving around, there are always young men and women coming in and out of Luckin Coffee, Bawang Chaji, Dicos, and Miniso in the local Ming and Qing Street. Although in Beibei's opinion, Bawang Chaji's Boya Juexian at 16 yuan a cup is really not cheap - in Beijing, brands such as Kudi and Luckin Coffee are fighting each other, and the price of tea and coffee has been reduced to the lowest 9.9 yuan per cup.

The theme trendy toy store in Wanda Plaza was packed with children and adults, who were talking and laughing and throwing out a long list of buzzwords: Guzi, Baji, Liuma; in the Nike, Adidas, and Puma stores across the street, there were many customers trying on clothes, and receipts were printed out one by one with the sound of scanning codes; in the Pizza Hut at the entrance on the first floor, every round table was surrounded by hungry customers...

However, Beibei was not particularly surprised. Data from e-commerce platforms have proven that 40% of the "rich" who bought "assassin" fruits such as durian and cherries came from third-tier and lower-tier markets. Cherry sales in third-tier and lower-tier markets grew by nearly 200%, much faster than the 49% in first- and second-tier cities.

In addition, expensive foreign wines and seafood such as Lafite, sea cucumbers, king crabs, and abalone also frequently appear on the tables of wealthy families in counties. Data from e-commerce platforms show that sales of sea cucumbers in Jiaozhou, Shandong Province increased fivefold in the past three months, and per capita consumption of Lafite wine in Jiangmen, Guangdong Province ranks first in the country.

In the evening, Beibei and four or five childhood friends met for dinner at Xu Dingsheng in the Starlight Shopping Center. "The decoration of this restaurant is very luxurious."

As soon as you enter the door, what catches your eye is the carefully designed flowing water rockery. The tables and chairs in the store are all made of high-grade solid wood, matched with elegant warm yellow lanterns, inverted colorful oil-paper umbrellas, quaint doors and windows, and fences, an antique atmosphere is overwhelming.

Normally, a "mid- to high-end restaurant" shouldn't be packed with guests, but unexpectedly the restaurant was almost full. I waited 40 minutes for the food to be served, and the waiter kept saying "Sorry, sorry, there are too many people."

In fact, it was just past 6pm, and the sun was still shining brightly. But since most people in my hometown get off work at 5pm, it is customary to have dinner at 6pm. Unlike the "social animals" working hard in Beijing, Shanghai and Guangzhou, who work day and night, they are likely to be squeezed on the subway at 8 or 9pm.

While waiting for the meal, the sisters inevitably talked about their clothes. Beibei was shocked again. It turned out that brands such as DAZZLE, JNBY, Koradior, etc., which cost thousands of yuan per piece, were just ordinary clothes in their eyes. Uniqlo had long been trampled under their feet. "The design is too common and has no characteristics. We don't wear it." A rough estimate shows that the sisters in my hometown spend about 20,000 yuan on clothes every year, or even more.

Touching the discounted Xtep jacket that cost only a hundred yuan, Beibei suddenly felt a little short of breath and guilty. She thought that as a small town student, she could get into a prestigious university, settle down in Beijing, and find a high-paying job with an annual income of 200,000 yuan, and live a life of buying whatever she wants and going wherever she wants. Unexpectedly, the county ladies who stayed in their hometown were the biggest winners in life, living a transparent and self-consistent life while standing at the "C" position on the consumer stage.

Although the absolute income is not high, because county families are generally not burdened by long-term car loans and mortgages, they are more willing to spend money - Beibei's hometown is no exception.

Tsinghua University's county consumer market survey report shows that 70% of county residents own real estate, 58.5% of residents own cars, and nearly 60% of homeowners have no mortgages; according to the survey data of "Black Ant Capital", about 40% of households in counties have an annual pre-tax income of more than 100,000 yuan, with a savings rate of about 38%, and 13% of households have an annual pre-tax income of more than 150,000 yuan, with a savings rate of about 42%.

Take Beibei's hometown for example, the average house price is just over 5,000 yuan per square meter, and it is still falling. Almost every household in the county has a house without a mortgage. Without a mortgage, they feel more confident when they spend money.

2. Brands collectively "hunt" county ladies

In 2015, Jack Ma pointed out that "women are the main force of consumption. If you capture women, you capture consumption."

Now, a more appropriate statement might be, "Ladies in county towns are the main force of consumption. If you capture these ladies, you capture the growth opportunity."

Doing business has always been about "wind". Rather than waiting for the wind to come, it is better to chase the wind. Penetrating downwards and "hunting" the ladies in the county town has become the most important task for brands. Wine, travel, food, clothing, shoes and hats, home decoration, jewelry and accessories are all included.

Take Starbucks as an example. Its expansion into lower-tier cities is so strong and rapid that it can be described as fully fired up. In 2023, Starbucks included more than 3,000 county-level cities in China in its strategic vision; by the end of fiscal year 2024 (September 29, 2024), Starbucks China had 7,596 stores, covering nearly 1,000 county-level cities.

In the latest fiscal quarter, Starbucks has entered Pingdingshan, Henan, Jiuquan, Gansu, Wenshan, Yunnan and other places, and half of the new stores are located in third-tier and lower-tier cities.

Chow Tai Fook, Chow Sang Sang and other jewel-laden players have also moved down to the lower levels. Chow Tai Fook has been promoting the New Town Plan since 2018 and started provincial-level agency in 2019. While accelerating the pace of store expansion, it has also started a battle for wealthy ladies in county towns.

The financial report shows that from March 31, 2019 to September 30, 2023, the number of Chow Tai Fook stores in mainland China soared from 2,988 to 7,799. The expansion in scale was mainly due to the support from third-tier and below low-tier cities.

Beibei has a deep understanding of this. In this pedestrian street in his hometown, which is only about 500 meters long and 20 meters wide, there are nearly ten gold shops, including Chow Tai Fook, Chow Tai Seng, China Gold, and Lao Feng Xiang.

What is even more puzzling to Beibei is that even though Chow Tai Fook and others are having a hard time in 2024, with a reduction in the total number of stores and a significant decline in performance, their stores in small cities are still crowded with people.

Mom was not surprised. She explained to Beibei, "Although the price of gold has risen sharply in recent years, people in small places don't care so much. It doesn't matter whether it maintains its value or not. We have money and free time, and we are competitive. I must have what you have, and I must have what you don't have first. I have to buy a few pieces to show off."

A Chow Tai Fook clerk told Beibei that there is no shortage of wealthy people in the county, and the "three golds" are standard for local weddings, so gold consumption is a rigid demand. In addition, the consumer population in the county tends to be aging, and the silver-haired group is very accepting of gold jewelry, which can be seen from the meanings of "a house full of gold and jade", "a golden marriage", "golden branches and jade leaves", "golden wind and jade dew", etc.

In addition, Beibei noticed that leading players in various industries such as lululemon, L'Occitane, Huazhu, Hema, Belle, and even big brands with luxury attributes such as Estee Lauder and Lancome, are all "racing for land" in the sinking market without exception.

Take L'Occitane, which focuses on personal care business, for example. It has long been unpopular with mainstream customers in first- and second-tier cities, but by "betting" on third- and fourth-tier cities, it has opened offline stores in Dezhou, Xingtai, Weifang, Anshan, Yancheng, Zhenjiang and other places, winning the hearts and wallets of a large number of county ladies, which has boosted its financial performance. In the first half of fiscal year 2024, its net sales in the Chinese market increased by 28%.

Meituan data also shows that from 2019 to the first three quarters of 2023, the volume of county life service orders has maintained a high growth trend, with a five-year compound growth rate of over 40%.

In short, in the era of internal circulation, the ladies in county towns bear the brands' expectations for growth.

3. In the era of “equal consumption rights”, small towns are moving towards “high-end”

After the trend changed, the county market has become a new opportunity, new momentum and new blue ocean that has emerged.

In fact, there have been many hot topics about county economy in recent years: from Cao County Hanfu, Xuchang wigs to Shouguang vegetables, Zhuji socks, Nantong home textiles... highlighting the characteristics and vitality of its industrial clusters, outlining a "spring landscape" with a hundred flowers blooming.

According to China's latest administrative division statistics, as of April 22, 2024, there were 2,848 county-level administrative divisions in the country, which included counties, county-level cities, urban districts, forest areas, mining areas, banners and other types; data from the seventh national census showed that the 1,874 counties included in the statistics in 2020 had a total permanent population of 748 million.

Qi Qi, founder of Huazhu Group, once revealed that in the three years since the pandemic, he has visited 63 third- and fourth-tier cities, passing through 172 prefecture-level cities, covering 1.6 million square kilometers and a population of 800 million, "enough to circle the equator four times."

Moreover, the GDP of many counties has exceeded 100 billion yuan, such as Kunshan, Jiangyin, Ruian, Shenmu, Changfeng and other top 100 counties in China. Judging from the results announced by various provinces, the GDP growth rate of counties generally outperforms the market. Taking Shaanxi as an example, in the first three quarters of 2024, the GDP of the province increased by 4.6% year-on-year, among which the GDP of counties increased by 6.0% year-on-year, an increase of 0.2 percentage points from the first half of the year.

Behind the data are the new successors that the grand narrative of the internal circulation of supply and demand is looking forward to: in the sinking market, there are more and more county ladies, Generation Z, the new middle class, the elderly, etc. who are pursuing taste and grade.

"A young man from a small town who earns 4,000 yuan a month carries a bag worth tens of thousands of yuan" is not a joke at all, and it is spreading from one point to the other.

Tang Jing (pseudonym), a white-collar worker born in the 1990s, chose to stay in her hometown of Huidong County, Guangdong Province, after graduating from university. In the past, she and her friends mainly bought beauty products with affordable prices and good reputations, and had no requirements for brands. However, in the past two years, she found that she and many of her peers and family members around her have all started to pursue "branded goods".

"In the past, few people would buy international brands such as Lancome, TF, and Dior because they were too expensive and people were afraid of buying fakes. Now we can all afford to buy them," Tang Jing added.

In other words, compared with the first- and second-tier cities such as Beijing, Shanghai and Guangzhou, which are suffering from serious internal competition and approaching saturation in capacity, counties with vast land and large populations are running on the road of consumption upgrading with considerable value-added potential and incremental space, creating a rare "growth gold mine".

In the era of "equal consumer rights", small counties and big cities are not superior to each other. Everyone will eventually shake hands in the middle and step onto the same stage.

However, for brands that are eager to grow, there are still differences between those who grow fast and those who grow slowly, and those who have greater stamina and those who have less stamina.

Written by Zhang Guoguo Edited by Wan Tiannan