Beijing and Shanghai may be the first cities that most people associate with China, yet no city embodies the meteoric rise and confidence of modern China quite like Shenzhen in the south. Pre-China opening up, Shenzhen was described as a ‘backward fishing village,’ but after being designated as a Special Economic Zone (SEZ) in 1980, its proximity to Hong Kong’s entrepreneurs and capital, coupled with the ambition and scale of China’s migrant workforce have seen it transform into a dynamic metropolis at a scale that is unmatched in world history.
Over four decades, Shenzhen has steamed ahead to alpha city-status. It is now home to 12 million people, and a GDP that surpassed Hong Kong in 2018 and is now higher than Israel, Argentina and the United Arab Emirates. It hosts the headquarters of Tencent, Huawei and Ping An, three of China’s seven most valuable brands, in addition to other mega-companies such as ZTE, SF Best, Vanke and drone maker DJI, which has captured 70% of the global market for consumer drones. In 2016, more skyscrapers were completed in Shenzhen than the US and Australia combined, and the city now has more buildings over 200 metres high than any other city in the world – 82 as of July 2019 (there are 22 in the European Union).
Travelling through Shenzhen, it is hard to miss the propaganda banners with slogans saying ‘reform never halted and opening-up never stopped’. Further reform was confirmed during President Xi Jinping’s visit to the “miracle city” last week to celebrate the 40th anniversary of its designation as a special economic zone. Not long after the festivities, the central government announced new powers for Shenzhen to attract key foreign workers and finance to further build the city as China’s tech hub, which will further establish it as the hub of the Greater Bay Area initiative.
The continued rise of Shenzhen will increase its allure to brands and marketers hoping to tap into its large, affluent consumer base. Brands shouldn’t make the mistake of rolling out the same strategy as that of other tier-1 cities to the north. Disparate climate and ways of life have and formed quite different behaviour between consumers across China. When considering that the average age of the 12 million people in Shenzhen is under 30, different products, positioning and platforms are likely to appeal than in other cities.
As we’ve noted before, many brands lump Shenzhen and Guangzhou together in their marketing strategy as two tier-1 cities 30-minutes apart on the fast train. However, Guangzhou is an established city where many of the wealthy consumers are multi-generational local and living with their parents, versus Shenzhen’s affluent migrants who may only see their family once or twice a year, lifestyles can be quite different, and messaging around family and work can mean quite different things.
Consumer behaviour in Shenzhen has also been impacted by Covid differently than any other city in China. Although virtually all of the main consumer trends that have happened since the pandemic apply in Shenzhen, there is also the added element of easy travel between Hong Kong and Shenzhen ending. Whereas many Shenzhen consumers regularly bought cheaper and often more trust-worthy goods across the border, border controls have put a stop to much of this, creating some interesting shifts in local consumption which may have become habit by the time borders are flowing freely again.
Although Shenzhen is the most extreme example, there are literally hundreds of cities in China where the consumer class has risen from nothing over the past few decades. Each city presents opportunities, but they also require an element of city or regional localisation to connect with consumers in a meaningful way. Contact China Skinny to discuss how we can assist.
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