Three Or Four Line 1 Billion Population, What Are Fashion Brands Waiting For?

There are five people in front of Kate. She has been in line for 20 minutes. She tiptoed to the shop impatiently, for fear that the long time Shu Mu Su master's eye shadow disc would be bought. "When it was put on the shelves in Japan, I saw it at a glance. It's hard to wait for the door to go public. I must get it!" She told reporters. This scene in Guangdong Foshan's Sephora is strange, and for some time to control the flow of people, the store allowed only members to enter.

In recent years, with the popularity of the Internet and the drive of the electricity supplier business, the consumption desire and potential of the three or four line urban population have been greatly released.

This trend is particularly prominent in fashion consumption, especially luxury consumption. According to the blue book "DDT Temple library 2019 Expo" released in early November last year, between September 2018 and September 2019, according to the annual consumption frequency, 27 of the top 30 were three or four line cities. According to the proportion of repeat shoppers, 29 of the top 30 were three or four cities. According to the proportion of the number of persons who purchase three or more, the former 30 are three or four cities.

"Many low level cities contain a lot of spending power that can not be underestimated. Due to the low penetration of luxury stores in the lower tier cities, online luxury electric providers will become an important channel for luxury consumption in low tier cities. In the next 5 to 10 years, the number of online luxury consumers and sales growth in the low level cities will have considerable room for growth, "said Li Rixue, founder and CEO of Si Gu group.

It is "town youth" that drives this strong trend. Their age is between 18 and 35 years old, living in relatively well-off three or four line cities, which is only two or three hours' drive from the metropolis, and has received more than a college education, and has a decent job in their hometown (with a monthly income of 2500~6000 yuan). Do not belittle small areas of the people, you know, according to the national positioning standards for each line city, the three line cities are less developed prefecture level cities (70), four line cities are underdeveloped prefecture level cities (90), these 160 cities have accommodated more than 1 billion people, and the volume is extremely huge.

　　 There are four main reasons for the vigorous development of the three or four tier cities.

In the mass market of the three or four tier cities, one side of the street is the native shops of Taiping bird, Hai Lan home, Anta sports, Semir, Metersbonwe and so on. The other side of the market is the well-known brands in developed areas. The "outsiders" have been covetously eyeing for a long time. First, H&M and Zara have both lost their way online and online stores, and have Uniqlo, Bosideng and so on.

What about the high-end market? Burberry, Prada, Dolce&Gabbana and other classic luxury brands are most favored, and the proportion of consumers buying luxury goods online is higher. In those days, there were not a few luxury brands that held up the flag. However, the news of shutting down business in recent years came one after another, and some of the markets that were "unacclimated" were evacuated. All the way down came to sing a song. Hangzhou, Chengdu, Xi'an and other second-tier cities were among the new "model" ranks. The commercial real estate projects led by SKP and Wangfujing department stores gathered brands such as Chanel, BottegaVeneta and MiuMiu, attracting local people at the same time, and continuing to expand, as consumers of the three or four line cities attracting the periphery.

There is no reason why many brands try to plough three or four lines of city market. Morgan Stanley chief economist of China has predicted that the consumption of three or four line urban residents will increase from 15 trillion yuan in 2017 to 45 trillion yuan in 2030, and will become the main force of the consumer market in the next ten years. Alibaba, Jingdong, and the second quarter performance report, which were widely distributed in 2019, confirmed his words. According to the address statistics, active buyers accounted for 50% of the three to six lines, while the number of active buyers in the low level cities increased by more than that in the first and second tier cities, with 70% of the new customers coming from the low tier cities.

Why can three or four tier cities become more volatile? There are four reasons: first, residents' incomes continue to rise. According to McKinsey's prediction, the proportion of China's middle class will increase substantially. It is expected to reach 81% in 2022 and become the most important force in China's consumption upgrading. Among them, the middle class of the three or four tier cities will become the fastest growing group in the future, and is expected to reach 40% in 2022. At the same time, other data show that the per capita disposable income of the three or four and five tier cities is expected to double in 2030 from 4482 US dollars in 2006 to US $8261.

Second, there is plenty of leisure time. According to the Research Report on China's workplace balance index, 31~40 hours are the highest length of time occupied by urban residents in three weeks below the city level (accounting for 35%), which is lower than that of the first tier cities (56%) and second tier cities (47%); in the interval of working hours greater than 41 hours, the cities below three lines are also below the first and second tier cities; on the contrary, the working hours of urban residents below three lines are 21~30 hours, which is higher than that of the first and second tier cities.

Third, the structure of the consumer group dominated by 80 and 90's young people has been formed. The post-80s and post-90s young people are in the starting stage and the fast rising period, and have grown into the main force of the consumer market. Young people in town are all in this age range. According to the statistics of the National Bureau of statistics, the number of young people in towns is as high as 227 million, compared with 68 million of young people in the first and second tier cities. Moreover, town youth pay more and more attention to quality and service, and pursue personalized, high-quality and experiential consumption. The average monthly expenditure is approaching 2734 yuan for the first and second tier cities, which is 2150 yuan.

Fourth, the penetration of network equipment is increasing. With the increase of Internet coverage and the continuous subsidence, the online entertainment and consumption behavior of low line urban residents has been protected by hardware. Moreover, based on the large population base, the scale of netizens in the low line cities still has a larger growth space, which also indicates the great potential in the future.

　　 What are the difficulties of fast fashion, mid end fashion and luxury goods in the three or four line market?

The brand active in the first and second tier cities can not take the blue ocean of the three or four line cities not a case. The "local snake" can have many advantages over the past years: the local fashion brands will sink deeper into the city, and the two expansion logic from bottom to top has no advantages. The three prices and brand tonality are closer to the local consumer demand.

Ten years ago, fast fashion brands were being introduced by shopping centers. In the past two years, however, they were faced with an embarrassing situation of declining performance and withdrawal, and consumers' attitudes towards them also changed. H&M and Zara have gone through such a process. The reason is that brands do not have the price advantage in the three or four tier cities. The clothes of hundreds of yuan are not only in line with the consumption habits of local residents, but more importantly, locals tend to circle culture and emotion in the consumption field, and the consumption contents with individuality and interest are more popular.

Let's take a look at the middle end fashion brands. Their main problem in the three or four tier cities is not very well known. It was also about ten years ago that Escada, Ports, Pinko and other mid-range fashion brands followed the pace of fast fashion brands into the sinking market. Unfortunately, not only did they fail to stir up thousands of waves, but they came to nowhere.

As for luxury brands, consumers in three or four tier cities generally have higher recognition of such brands. They often buy on Tmall, Jingdong, vip.com and other local electricity providers, and occasionally buy through overseas electricity providers like Farfetch and Shopbop, aiming at component comparison and selection. Overall, lipsticks, skin care products and other entry-level products are particularly keen, and the growth of scarves, bags and watches is also very high. From the point of view of brand segmentation, the big names like LouisVuitton, Dior and Rolex are more likely to be recognized and understood.

As for the place of purchase, most consumers in low level cities will choose to buy the counters in the first and second tier cities. Zhou Ting, the dean of the customer research institute, has said that in recent years, the entire luxury industry brand is the form of tight shop. Therefore, the layout of the low line city market needs a new way to do a large number of non store sales system and activity system to trigger local customers, such as online festival planning, flash shop opening and so on, and this process is difficult to reach the local wealth crowd. In addition, most brands need to be promoted on the ground. In the process of cooperation with local media, there will be a situation of inconsistency of tonal, so luxury brands can hardly have a matching media environment to spread their brand image.

Li Rixue added: "there are many factors that need to be taken into consideration in the future of luxury goods channels, such as the local consumption power of sunken cities, the competition pattern of luxury brands in the locals, and the maturity of consumers at low levels. We need to assess more deeply whether the specific low line cities are worth sinking. "

Indeed, the opening of the three or four line market is far from being simple. It must be aware of the fact that its population is extremely polarized. For the fashion industry, it is more important to be young, have cars, have houses, and live without worry. They have obvious consumption upgrading needs to be released, pay attention to brand premium, and brand should be matched with effective advertising, and promote consumption transformation by emotional identification. This is consistent with the first and second tier cities. The difference is that the three or four line cities emphasize cultural stickiness. Brands may try to penetrate the circle. Through searching for the way of cooperation between celebrities and Internet Celebrities, targeted marketing campaigns are carried out in the sinking media such as jitter, fast hand, WeChat public number, micro-blog and other social media and Baidu search. These effects on the sinking market that pay attention to word-of-mouth communication are immediate.

For example, in 2017, in the months of 2017, MichaelKors, as the first luxury brand to cooperate with the depth of trembling, launched the city of Taiwan, Taiwan City, Taiwan, and refused to take up the challenge. It specially invited three people to wear personal products to demonstrate in person, and encouraged users to upload short videos of personal creativity. According to statistics, a week after the challenge, the more than 30 thousand users were attracted to create short videos, and more than 200 million playgrounds and 8 million 500 thousand points were awarded. For example, last year, Dior pioneered the use of TopView mode to publish Rouge999 advertisements on Meitu Xiu Xiu App, which seamlessly linked the open screen advertisement and the information flow inside App, and realized the uninterrupted broadcast of advertisements, aiming at enhancing immersion and enhancing user interest and interest in advertisements. Moreover, the advertising mode supports the jump of brand electric home page or official website homepage, Meitu Xiu Xiu App internal function and native page, which can help the brand build marketing closed-loop and increase conversion rate.

The above cases show that more and more young people are willing to participate in the discussion of fashion brands in social media. Brand awareness, identity and fantasy continue to grow. Of course, there is no shortage of big cards that lead to a failure because of haste.

Amanda bought a Lanc me lipstick for her birthday in a shopping mall in Zibo, Shandong, but soon she regretted it. "270 yuan can buy a lot of other things, but what can I do if I buy it? Never buy it again, "she said. Indeed, there are too many alternatives to choose from. Perfect diary, Carslan, Mary de Jia and other new generation of domestic brands in the product design attach importance to innovation and focus on high quality, and the use experience is not necessarily inferior to that of luxury brands.

This is an interesting era. The channel continues to sink and the domestic goods are strong in pursuit. The domestic brand has begun to compete with the western brands on the same level. The best judge of this competition is the low level urban consumers who are really rich and idle. This is the return of cultural confidence. The brand of domestic goods has already possessed the inherent advantages. It is not difficult to foresee that the success or failure of the future sinking war will depend on whether the values represented by the brand and its commodities can match the ideals of the young people.