【Economic】Business opportunities

【Economic】Business opportunities in third-fourth-tier cities

陶Aaron 陶Aaron 

Entrepreneurial opportunities in China's third-tier and fourth-tier cities

Urbanization in China is the fundamental trend of the new economy.The emergence of any new business model or technology is closely related to this trend.

Except for some island countries relying on tourism, the per capita GDP of most countries is positively correlated with the urbanization rate, and the urbanization rate of most countries is more than 75%.China's urbanization rate in 2018 is 57.4%, still far from 80% in developed countries.That means at least 500 million more people will move from the countryside to cities and towns.

The consumption demand of these people will be released in the town.

China's more than 2,800 counties, which are likely to be the major urban areas in the future, will have supercounties with a population of 500,000 to 1,000,000.

As you can imagine, there are so many people living, eating, dressing and consuming in one place, and there will be a lot of business around them.

According to the survey, we know that the consumption capacity of third-tier and fourth-tier urban residents is even higher than that of first-tier white-collar workers. Their monthly income may be around 5,000 yuan, which is not good, but it is certainly not bad.Housing does not need to be solved by oneself, parents have a house, or bought a house with the support of parents, and there is no mortgage pressure.In this way, it is mainly used for consumption.

In 2015, the number of outbound Chinese tourists reached 106 million, which, in my eyes, is a clear signal of the upgrading of China's consumption, including the trend of China's second - and third-tier cities.

Therefore, when it comes to entrepreneurial opportunities in third-tier and fourth-tier cities, the first one is to upgrade consumption around clothes, food, housing, transportation, food, drink and entertainment.This is probably the biggest entrepreneurial opportunity in third - and fourth-tier cities.

The second opportunity revolves around car-related consumption.Because third-tier and fourth-tier city residents are under less pressure to buy houses and have more small change, how can they spend it?Car consumption below third-tier cities now exceeds that of first-tier cities, and the growth rate may be even faster in the future, which is related to China's highway construction.

Now, many e-commerce second-hand car companies, because of the restrictions on purchase and license plates in first-tier cities, are more likely to transfer second-hand cars obtained in first-tier cities to second-tier, fourth-tier cities and even rural areas.When the car arrives in the second or third tier cities, there are new businesses to be done around the car, such as finance, maintenance and so on.

The third opportunity is education.China's best education resources are in Beijing and other limited first-tier cities.But everyone yearns for fair access to education resources.This is human nature, Chinese parents want their children to be successful, even if the children in the fourth and fifth tier cities also want to enjoy the same education resources as children in Beijing.This is only the Internet, artificial intelligence can change the education resource imbalance.This is why the current K12, English and other education companies are particularly popular.

What is the next opportunity for third - and fourth-tier cities?I think it's "retirement".Due to the urbanization process in China, many young people are separated from their parents in space. For example, young people go to the first and second-tier cities while their parents stay in the county.How to solve their pension problem?This is a social problem, but there are also market opportunities for commercial companies.

There is a start-up company that provides medical examination services for parents, paid for by children who live and work in first-tier cities.Because their parents are not around, they can only learn about their parents' health through physical examination.I think he will provide real old-age care services in the future, which is a huge market.

Therefore, I personally believe that for those who do not have the capital and technology to go to shenzhen, Shanghai and Beijing to start businesses, third-tier and fourth-tier cities will be a good opportunity to start businesses.