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consumption in third- and fourth-tier cities is quietly changing.

in the past, third- and fourth-tier cities, where white-label and knockoff products were prevalent, were hotbeds of low-price competition. but now, consumption in small cities is also undergoing subtle changes. consumers not only pay attention to price, but also value the value and quality of consumption. online and offline outlets, brand discount stores, etc., which are favored by people of all classes in first- and second-tier cities, have extended to third- and fourth-tier cities and even more remote areas.

this is essentially to extend the high-quality products and services that were originally only enjoyed by users in first- and second-tier cities to the middle class outside the fifth ring road. consumers in small cities can buy the same popular products in big cities at a more cost-effective price right at their doorstep.

data also confirms this change: of the 23 new outlets opened nationwide in 2022, 10 are in third- and fourth-tier cities, accounting for nearly half. at the same time, the latest financial report data of online outlet vipshop shows that its svip active users increased by more than 11% year-on-year - more and more consumers are accepting discounted big brands.

a more fair and inclusive consumption environment is taking shape.

outlets are "spreading"

"i finally understand why people don't want to leave after shopping at the outlets. the big brands are so cheap, it's really tempting. you can find big brands at 50% off just by walking around, and many sports brands have extra discounts." shanghai resident li ying just went to qingpu outlets last weekend. the shops were crowded with people, and some big-brand stores even required queuing to enter.

there is a constant flow of people in front of the adidas store in olay

at the outlet, li ying was pleasantly surprised to find that adidas grey d-train shoes cost more than 200 yuan and lululemon tops cost more than 300 yuan, which are almost unimaginable in traditional shopping malls.

the preference for outlets is spreading to all income groups in the city. outlets are not only the favorite of "golden collar" li ying, but also the "wardrobe" of freshly graduated college student chen manlin. similarly, li ni, who runs a company in shanghai, has gradually begun to prefer outlets. her clothes are now all high-end brands, and less than half of them are bought on the online outlet vipshop.

as stanley k. tangler, founder of tanger, a benchmark in the u.s. outlet industry, said, "when the economy is good, people like discounts; when the economy is bad, people need discounts."

from the demand side, people's consumption concepts have changed. today, they pay more attention to rational consumption and pursue a quality life. currently, "a monthly salary of 20,000 yuan cannot afford bread", "a monthly salary of 20,000 yuan cannot afford a homestay"... "a monthly salary of x yuan cannot afford xxx" seems to appear more frequently on social media, and every time it appears, it can arouse heated discussions among users on social media.

the projection of this consumption concept in reality is that people hope that consumption will become more "valuable". outlets provide consumers of different income levels in the city with an equal opportunity to enjoy big-name products, which just meets the common consumption philosophy of different groups of people - to live the most comfortable life with the least money.

on xiaohongshu, outlets have become the most fashionable check-in spot for young people. more and more people love to go shopping at outlets, and the number of related notes alone has reached nearly 1.5 million, which also shows the popularity of outlets among young consumers.

the crowds are bustling in the nike store in chengdu shuangliu times olay

discount retail is coming to small cities

outlets used to be a symbol of big cities and a product of urban development, but consumption changes are not exclusive to first- and second-tier cities. the same demand has also emerged in more third- and fourth-tier cities. consumers in small cities are no different from those in first- and second-tier cities in their pursuit of quality life and cost-effectiveness. the disappearance of copycats and the lack of popularity of white-label products have become a potential trend.

as a result, outlets have become closer to consumers in small cities. in june 2023, an outlet store was established in she county, huangshan city, anhui province. consumers who used to go to shopping malls in hangzhou and hefei to buy branded clothing now have new choices. data from the 2023 china outlet industry white paper shows that among the 23 newly opened outlets in 2022, 10 are in third- and fourth-tier cities, accounting for nearly half.

some media commented that "it was unimaginable that a small county town could attract a world-renowned luxury discount mall to settle in. this is a microcosm of the retail outlets' move into third- and fourth-tier cities."

in the view of commercial real estate researcher xie shangwei, high-end consumption in third- and fourth-tier cities is strong because compared with central cities, third- and fourth-tier cities have lower housing, travel, and catering prices, and people with stable incomes have a better sense of happiness in urban life. residents of third- and fourth-tier cities have a larger proportion of their income available for consumer spending.

consumers in small cities are gradually changing their habit of going to provincial capitals for shopping. the spillover of high-end consumption from small cities is slowing down. in more and more places, consumers can buy the brands they want at a higher cost-effectiveness without leaving their own living area.

undoubtedly, third- and fourth-tier cities are experiencing a quiet but lasting consumption change. as time goes by, rational and diversified consumption concepts may become the mainstream of the market.