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How Come the Most Popular New Consumer-Goods Brands Didn’t Come Out of First-Tier Cities?

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How Come the Most Popular New Consumer-Goods Brands Didn’t Come Out of First-Tier Cities?

Insights Into New Consumption,

5 min read
5 take-aways
Audio & text

What's inside?

As an investor, scout outside China’s biggest cities.

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Editorial Rating

7

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Recommendation

While you were being dazzled by the newest tech trends, the hottest start-ups, and the most inspiring or threatening artificial intelligence innovation, several traditional retail brands of snacks and beverages have entered China’s brand scene from backstage. Zhou Hei Ya, a company that makes processed-duck snacks, has gone public in Hong Kong. Three Squirrels, which specializes in nut snacks, is now China’s largest snack brand. Hey Tea, a milk-tea chain store, commands two-hour queues all day every day. Besides overwhelming popularity, these brands have another trait in common: None of them originated in China’s first-tier cities. In this article from the WeChat channel Insights into New Consumption, retail expert Long Mao Jun explains why lower-tier cities offer better breeding grounds for consumer brands and advises venture capitalists to pay attention to the budding consumer brands in second- and third-tier cities. getAbstract recommends Long’s advice to entrepreneurs, investors, marketers and trend watchers.

Summary

China’s first-tier cities – Beijing, Shanghai, Guangzhou and Shenzhen – lead the country in fashion and lifestyle. These cities create trends and cultivate highbrow taste. Start-up entrepreneurs and venture capital investors naturally cluster in first-tier cities, which are rich in intellectual and monetary resources and provide the most thriving business environment. However, the newer consumer food brands that have risen to stardom – processed-duck snack company Zhou Hei Ya, nut company Three Squirrels, and milk-tea shop Hey Tea – all grew out of second- and third-tier cities. Before their widespread popularity attracted investors’ attention, these brands had relatively humble roots – Zhou Hei Ya in Wuhan, Three Squirrels in Wuhu, and Hey Tea in the little-known city of Jiangmen.

To have a successful consumer food brand, you need to reach as many people in the Chinese ...

About the Author

Long Mao Jun is the founder and main writer of Insights into New Consumption, a WeChat wemedia account that reports on the consumer goods industry with a focus on consumption upgrade, start-ups and innovation.

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