Mckinsey Suggests Subdividing Markets With Urban Agglomerations

Global

"The annual mixed growth rate of China's consumption is 11%, the first in the world.

And in the next ten years, this trend will continue, and its growth rate is higher than that of GDP. "

Di Weirui, senior director of McKinsey Asia consumer research center, said (Vinay Dixit).

Data show that in 2009, China's annual consumption is 3 trillion and 400 billion yuan, if the average annual growth of 11%, the future is expected to reach 10 trillion yuan a year consumption.

The new consumption trend is increasingly clear, and the huge consumer market is exciting for enterprises.

How should enterprises adjust themselves to these new consumption trends?

New characteristics of Chinese consumers

The positive consumption attitude of Chinese consumers, even in the

In the past, the income level of Chinese consumers was relatively low, and most of their consumption was spent on necessities (mainly food and clothing). A survey showed that on average, only one item of food accounted for 30% of household consumption expenditure.

With the increase of income, the proportion of consumer necessities and semi necessities is increasing.

Second, Chinese consumers are becoming more pragmatic, reflecting their consumption.

In addition, McKinsey's survey shows that, similar to the 2007 survey results, Chinese consumers still use shopping as a recreational item, which is an important way for them to get together with their families.

What is more interesting is that Chinese consumers are becoming more sophisticated, and they have raised the threshold of business marketing.

Compared with consumers in Europe and America, the driving factors of Chinese consumers buying products are mainly product maturity and functionality, followed by emotional factors, that is, whether they are suitable for themselves, whether they are valuable to their families and so on.

"Family factors are becoming more and more important in emotional factors, and Chinese consumers are more concerned about this factor than consumers in other parts of the world."

Max Magni, McKinsey Global Director, said.

Consumption upgrading is also an obvious feature of Chinese consumers in the survey.

But not all consumers are upgrading, but upgrading on the most important categories, balancing them on other categories and achieving a balance in general.

Data show that half of the consumers use a trade-off way to upgrade their consumption.

Another interesting finding is that Chinese consumers tend to think that the products with high price are of better quality.

"It also explains why some products sell better but sell better."

He said.

City Group marketing of enterprises

In the face of the changing Chinese consumer market and consumers, how should enterprises layout successfully? In 2009, McKinsey first proposed the concept of "Urban Agglomeration" instead of market level.

Urban agglomeration or geographical location is becoming an important factor driving consumption and attitude towards life.

Take television advertising as an example. In Shenzhen, a city with about 85% of the floating population, people will rely more on TV advertising to make purchase decisions. In Guangzhou, where 75% of the population is local, word of mouth is an important marketing tool.

"That's why we put these two cities in two different urban agglomerations."

Ma Si Mo said that Chinese enterprises are well versed in this way.

They know that the concept of hierarchy can not be applied to "one size fits all". Instead, they should be subdivided according to the concept of urban agglomeration, and how to invest from the scale of urban agglomerations and the behavior of local consumers.

Yuval Atsmon, McKinsey Global deputy director, told the first financial daily that three major steps should be taken for enterprises to do marketing in urban agglomerations.

One is to adjust the product category and product mix.

"Your products may be suitable for some urban agglomerations, but they may not be suitable for other urban agglomerations".

In different urban agglomerations, people have different definitions of fashion, such as clothing, while in packaging, demand for consumer electronics products is not the same; in terms of taste, food is most obvious.

This is a huge challenge for comprehensive enterprises.

The biggest competitor they face is often a local business, because he knows most about the city group and only aims at this city group.

The second is to consider how to brand and marketing.

Enterprises must have a clear knowledge of what local consumers care about and understand what the most effective way of spreading is, which helps enterprises to carry out marketing at the lowest and optimal cost.

Third, it is necessary to consider clearly what channels and ways to sell.

Some brands are suitable for distributors, while others need to be combined with local distributors.

For example, in the choice of channels, even in the two seemingly large cities of Beijing and Shanghai, consumers differ greatly.

For example, consumers in Beijing prefer to buy clothes in department stores, while consumers in Shanghai tend to go to exclusive stores.