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Douyin Captures Chinese Lower-Tier Cities
BY Shine HuSep 18, 2021
Douyin is probably more content-based in first and second tier cities, but in the lower-tier market, socializing is the most prominent and appealing function.
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Increasing Internet penetration in Chinese lower-tier cities

According to the 48th Statistical Report on China’s Internet Development1, the number of Internet users in China reached 1.011 billion by June 2021, up 21.75 million from December 2020. The Internet penetration rate reached 71.6%, up 1.2 percentage points from December 2020. The number of mobile Internet users also exceeded 1 billion.

One billion people’s connection to the Internet generates the world’s largest digital society, featuring enriched digital application services in consumption, entertainment, medical, and education extending from cities to rural areas.

As of June 2021, the number of Internet users in rural China was 297 million, and the Internet penetration rate in rural areas was 59.2%, up 3.3 percentage points from December 2020. The vast lower-tier market has enjoyed the convenience and benefits brought by digitization. By June 2021, the coverage rate of express delivery outlets in townships reached 98%, which proves upgraded rural consumption.

Douyin further penetrated into lower-tier markets

The lower-tier market covers nearly 95% of China's geographical area, with a population of almost 1 billion, accounting for 70% of the total demographic. By virtue of a huge consumer base, the lower-tier market has been pinned high hope for driving the growth of China’s consumption market.

In recent years, short video and livestream have become new entertainment and quickly trickle down to the lower-tier cities and towns.

  • By June 2021, the number of online video users (including short videos) in China had reached 944 million, 17.07 million more than that in December 2020, accounting for 93.4% of the total Internet users. The number of short video users was 888 million, a 14.4 million increase than December 2020, accounting for 87.8% of the entire Internet users.

  • The number of online livestream users reached 638 million, up 75.39 million year-on-year, accounting for 63.1% of the total Internet users. The number of online e-commerce livestream users was 384 million, up 75.24 million year-on-year, accounting for 38% of the total Internet users.

  • The short video usage in the lower-tier cities has surpassed that in the first and second tier markets, and the online video and instant messaging usage is on par with that in the first and second tier cities.

The youth and silver-haired generation are two representative consumer groups in the lower-tier market, who show increasing loyalty to short video and livestream applications such as Douyin. In 2021Q2, Douyin’s proportion in third-tier cities and below increased to 64.7%2.

What are people in lower-tier cities doing on Douyin?

1. Socializing: short video shooting

Douyin is probably more content-based in first and second tier cities, but in the lower-tier market, socializing is the most prominent and appealing function.

The acquaintance socializing feature in lower-tier cities and rural areas often makes it easier for Internet products quickly proliferate from individuals to families, towns, and counties, and form a trend. People in lower-tier townships have less work pressure and more spare time, so people tend to spend more time on time-killing digital applications like Douyin.

However, there are also "barriers" between the silver-haired and young people when shooting short videos. Young people are more willing to show their fashionable side on short video apps, while the middle-aged and elderly people often post their daily life scenes surrounding laundry, cooking or farm work, and some imitations shows such as folk songs singing and square dancing, which are usually considered “a little vulgar” by young people.

i.pngDouyin influencer

Apart from watching and shooting short videos, people in lower-tier markets frequently interact with their acquaintances, such as “like” short videos posted by their friends. The socializing feature has become the biggest motivation for them to post short videos on Douyin and receive likes or comments from real acquaintances or semi-acquaintances. In this way, Douyin in the lower-tier market is more like a video version of WeChat moments. The latter is mainly for posting pictures and texts. People focus more on socializing and interacting with acquaintances than strangers, just as what they do in WeChat.

2. Shopping: livestream e-commerce

Livestream e-commerce is increasingly accessible to people in lower-tier cities. Especially among the middle-aged and elderly group who used to refuse to shop online, some have been addicted to the new shopping scenario. Clothing, fruit, agricultural products, jewelry, calligraphy works, and paintings are the most frequently bought commodities.

Several reasons contribute to the booming livestream e-commerce among the middle-aged and elderly group:

Relieve loneliness. Watching livestream and interacting with anchors can meet their psychological needs for social activities.

The lure of low price. Livestream e-commerce often spurs impulse buying due to the fleeting cheap products. Lower-priced products are the most attractive incentive to old people in the lower-tier market. Not only do they buy for themselves, but also for their families and share what they have purchased with those around them.

For brands that plan to exploit the vast Chinese market, targeting and seizing the huge lower-tier consumers on Douyin may be a good choice. People in lower-tier cities are natural KOCs since they spend much time on Douyin every day and spontaneously promote what they like in their social circle.

Shine Hu
ChemLinked Research Analyst
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