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Dividing sales channels by administrative region is a common corporate practice. The chart below shows the administrative divisions of the People's Republic of China as of December 31, 2012.

These administrative divisions undergo minor adjustments each year. As shown in Figures 6-7, which present the administrative division statistics for 2010–2012, the numbers of prefecture-level cities, county-level districts, municipal districts, county-level cities, and counties change almost every year.

Additionally, the Ministry of Civil Affairs' Division of Administrative Regions also divides the country into seven major regions (excluding Hong Kong, Macao, and Taiwan):

  • North China: Beijing, Tianjin, Hebei, Shanxi, Inner Mongolia
  • Northeast: Liaoning, Jilin, Heilongjiang
  • East China: Shanghai, Jiangsu, Zhejiang, Anhui, Fujian, Jiangxi, Shandong
  • Central China: Henan, Hubei, Hunan
  • South China: Guangdong, Guangxi, Hainan
  • Southwest: Chongqing, Sichuan, Guizhou, Yunnan, Tibet
  • Northwest: Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang

The above classification is more of an administrative management method. In our actual sales-oriented channel management, the regional division differs somewhat. The common divisions are into four, six, or eight regions (excluding Hong Kong, Macao, and Taiwan), as detailed in Figure 6-8. Of course, different industries, companies, and business stages may have slightly different divisions.

The principle behind these three sales region divisions is a balance between regional sales volume and administrative management.

We generally do not classify provinces by tier, but we do classify cities by tier. The classification criteria typically reference the city's population, per capita annual income, economic strength, total retail sales of social consumer goods, and other factors.

  • Special-tier cities: Beijing, Shanghai, Guangzhou, Shenzhen (these are the traditional four special-tier cities; however, with Chengdu's rise in the western retail market, some retail companies or brands have replaced Shenzhen with Chengdu)
  • First-tier cities: Nanjing, Suzhou, Wuxi, Hangzhou, Ningbo, Fuzhou, Xiamen, Changsha, Wuhan, Tianjin, Jinan, Qingdao, Dalian, Shenyang, Harbin, Chengdu, Chongqing, Xi'an
  • Second-tier cities: Zhuhai, Foshan, Quanzhou, Dongguan, Nanning, Haikou, Sanya, Kunming, Mianyang, Guiyang, Lhasa, Shijiazhuang, Taiyuan, Baotou, Hohhot, Yantai, Changchun, Anshan, Nanchang, Zhengzhou, Hefei, Urumqi, Lanzhou, Xining, Yinchuan
  • Third-tier cities: Tangshan, Qinhuangdao, Handan, Baoding, Langfang, Datong, Yangquan, Changzhi, Linfen, Fushun, Benxi, Jinzhou, Jilin, Siping, Qiqihar, Daqing, Jiamusi, Mudanjiang, Changshu, Zhenjiang, Lianyungang, Jiangyin, Yixing, Kunshan, Huzhou, Lishui, Xiaoshan, Ruian, Yiwu, Wuhu, Bengbu, Ma'anshan, Anqing, Putian, Zhangzhou, Shishi, Jingdezhen, Jiujiang, Yingtan, Dongying, Weifang, Tai'an, Weihai, Binzhou, Kaifeng, Luoyang, Pingdingshan, Shiyan, Yichang, Xiangfan, Zhuzhou, Xiangtan, Hengyang, Shaoyang, Shaoguan, Shantou, Jiangmen, Maoming, Zhongshan, Chaozhou, Liuzhou, Guilin, Beihai, Zigong, Panzhihua, Leshan, Yibin, Nanchong, Qujing, Yuxi, Baoshan, Dali, Zunyi, Tongchuan, Baoji, Xianyang, Hanzhong
  • Fourth-tier cities: All cities not listed above
  • Township markets: Townships located in rural areas; there are 40,446 township-level markets nationwide

Currently, competition in China's high-tier cities is very intense. Everyone is shifting focus downward, and in the future, second- and third-tier cities will be the main battleground for competition.

Text: Reprinted from "Data-Driven Management"

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