When it comes to small-town youth, one cannot avoid mentioning the movie 'Ex-Files 3: The Return of the Exes' released earlier this year. Despite a low Douban score of only 5.7, poor early reviews, and mediocre box office on its opening day, the film eventually grossed nearly 2 billion yuan, becoming a phenomenon at the time. About half of the 2 billion yuan box office was contributed by young audiences from third- and fourth-tier cities. In most cases, new films are first validated in first- and second-tier cities before being distributed to third- and fourth-tier cities and even lower-tier towns. This time, the 'counterattack' of small-town youth created the box office miracle of 'Ex-Files 3: The Return of the Exes'. Wu Yan, founder of Yingmei Media, shared at a salon on the CEIBS crowd-innovation platform 'Chuang Future': In China's population structure, the population of first-tier and quasi-first-tier cities combined is about 100-200 million, at most 300 million. But the population of third-, fourth-, fifth-, sixth-, and seventh-tier cities and below is about 800 million to 1 billion, with a very high proportion of young people. The third- and fourth-tier cities, which were previously rarely noticed, are undergoing tremendous changes. The main consumer force in these areas—'small-town youth'—are increasingly showing their unique consumption power and concepts. Recently, Alimama's user research team released 'Insights and Marketing Suggestions for Snacks, Beverages, and Alcoholic Drinks for Small-Town Youth', studying the consumption preferences of small-town youth through data and interviews, and confirming through a series of data that 'those who win small-town youth win the world' is gradually becoming a reality. The aesthetic tastes and consumption trends of small-town youth are having an increasingly profound impact on contemporary business, and their power can drive popular trends to emerge on a larger scale. In the past, these young men and women born in the 1980s and 1990s, working and living in third- to sixth-tier cities or towns, were late to know popular trends due to geographical limitations. They were followers of trends, and their demands were often ignored by cultural communicators and product producers. But now, driven by the internet, small-town youth are seamlessly connected with urban trends; facing low life pressure and relatively abundant leisure time, they dare to consume and are willing to try new things, becoming trend followers or even trendsetters. 1 A Youth Group That Cannot Be Ignored According to data from Mobile Taobao and Tmall, the consumption growth rate of small-town youth is higher than that of urban youth. The annual consumption of over 100 million small-town youth has reached nearly 1 trillion yuan, with a growth rate of 24% from 2017 to 2018, even exceeding the 18% growth rate of urban youth. Overall, from 2017 to 2018, small-town youth spent generously on beverages and alcoholic drinks, with both categories showing rapid growth. Through research on transaction category coverage, transaction amount, transaction days, and product prices, it was found that small-town youth spend more money, buy more frequently, buy a wider range of products, and are in the midst of consumption upgrading compared to urban white-collar workers. From an industry perspective, in the three major categories of beverages, alcoholic drinks, and snacks, carbonated drinks, milk-containing drinks, syrup, and cup milk tea are showing rapid growth. The market demand of small-town youth is strong, and they are in the midst of consumption upgrading. In the categories of alcoholic drinks and snacks, demand is diverging, with many subcategories experiencing declining growth, among which pecans, pecans, and bean products are the main declining categories. This indicates that brand competition is becoming increasingly fierce under the trend of consumption upgrading. 2 Four Consumption Trends Emerging Trend 1: Enthusiasm for Exploring Novel Things Small-town youth have a restless heart beneath their comfortable life. They are not bound by tradition and pursue novelty. The penetration rate of 'girly' snacks increased by 2846% year-on-year in 2017, and they even show a higher willingness than urban white-collar workers to pursue 'fun' products—the penetration rate of 'prank' snacks among small-town youth increased by 77% year-on-year in 2017, far exceeding the growth rate of urban youth. Similarly, 'creative' beverages and 'customized bottles' are also very popular, with penetration rate increases of over 300% last year. The unique experience also holds great appeal for small-town youth. In 2017, customized bottled beverages became an overnight sensation on Mobile Taobao, with the penetration rate of beverages with different bottle packaging increasing by 467% year-on-year and the unit price increasing by 100% year-on-year. Furthermore, small-town youth's attention to new and exotic flavors actually exceeds their attention to original flavors. From the list of best-selling snack flavors, common flavors like spicy, hot, and original firmly occupy the top three; however, in terms of growth rate, the picture is quite peculiar, with the fastest-growing being the 'stinky' flavor, with a growth rate of 153%. The top ten also include niche flavors such as passion fruit, mint, and brown sugar. In addition, they have a higher desire to explore the taste experience of food itself. Compared to 'original flavor', they are more willing to try new things. On the snack flavor penetration rate ranking, spicy, hot, and original flavors firmly occupy the top three, but on the flavor growth rate ranking, 'stinky' flavor tops the list with a 153% growth rate, and niche flavors such as passion fruit, mint, and brown sugar are also on the list. Compared to offline consumption, online shopping offers small-town youth more choices. They are extremely curious about products and prefer to choose multi-flavor combination packs. Compared to single products, mixed packs are growing significantly faster, with a growth rate of over 200%. Trend 2: Pursuing a Healthier Diet and Lifestyle The report shows that among snack products, dried persimmons, plums, dried strawberries, papaya, and dried pineapple have seen significant growth, becoming indicators of a new generation of healthy foods. In contrast, high-oil and high-fat seed nuts and greasy and sweet pastries are showing a declining trend, such as walnut kernels, chocolate with nuts, and wafer biscuits. Overall, the gradual awakening of health awareness has evoked different taste preferences. In addition, in the past, consumers' awareness focused more on whether food had additives, but now their attention is broader. Products with characteristics such as alkaline, high fiber, low fat, and collagen have stronger consumer demand and faster growth. This reflects that consumers are paying more and more attention to healthy food, caring about their physical health, body shape, and refusing obesity. Driven by the pursuit of health, beauty, and thinness, small-town youth also have a stronger orientation towards the functionality of purchased products. In Alimama's report, it was found that beverages with the character '酵' (ferment) have a very high growth rate, as many people associate '酵' with 'slim'. At the same time, the functionality of beverages is being better explored, with keywords such as refreshing, awakening, energy, hydration, and aiding digestion becoming the fastest-growing. In terms of population, there is still a huge potential market for food and beverages targeted at special segments such as the elderly, children, and pregnant women. The market penetration rate for products targeting children, pregnant women, students, and the elderly maintains a growth rate of about 40%. This means that merchants need to deeply understand the consumption characteristics of these groups, cater to their health requirements, and quickly develop special beverages to maintain a foothold in the future market. Trend 3: Satisfying Emotional Needs Cars, houses, savings, workplace... These keywords have always troubled the young generation in today's society. However, compared to small-town youth, thanks to lower housing prices and rents in third-tier and below cities and the habit of living with parents, small-town youth have a lower proportion of housing expenditure and a higher quality of life. But regardless of whether the pressure is greater, there needs to be an emotional outlet. For the young generation born in the 1980s and 1990s, who have an indissoluble bond with major snack brands, snacks are always a perfect choice. The report shows that two types of snacks are growing faster: one is crispy but not greasy biscuits, such as puffed foods and egg rolls, crispy, thin, or sandwich biscuits, which can relieve life pressure to some extent; the other is savory meat snacks, such as dried tofu, pork, duck, chicken, etc., which can stimulate the taste buds and accompany inner loneliness. Snacks play different roles at all times, and the three most prominent snack times for small-town youth are 'late-night companionship', 'office leisure', and 'evening leisure'. Late-night companionship—from 0:00 to 5:00 in the deep night, night owls start their post-midnight revelry, with snacks accompanying them to avoid loneliness; Office leisure—from 3:30 to 6:00 in the afternoon, afternoon tea time, snacks serve as a social carrier in the office; Evening leisure—from 7:30 to 9:00 in the evening, family reunion, snacks become a lubricant for emotional communication among family members; During office leisure and evening leisure, the demand for extra-large and bulk snacks is very high. This means that snacks are not only a personal companion but also a lubricant for social relationships, and sharing snacks during gatherings can enhance feelings. Small-town youth show a significant increase in consumption before traditional festivals such as New Year's Day and Chinese New Year's Eve. They place more importance on traditional festivals and family values than urban youth. During festivals such as New Year goods, birthdays, and Qixi, the penetration rate of beverages increases far more than snacks, even reaching 11011% on Qixi. That is to say, whether in birthday scenarios or Valentine's Day or New Year goods scenarios, small-town youth prefer to give beverage products rather than snacks. The penetration rate of gift-boxed snacks decreased by 5%, while the penetration rate of beverages increased by 35%. Trend 4: Pursuing Novelty Following trends is another label of small-town youth consumption. The report points out that snacks with internet celebrity attributes are particularly popular among small-town youth, with a year-on-year transaction amount growth of 4510% in 2017, about twice the growth rate of urban youth. Among the snacks consumed by small-town youth, snacks featured in short videos reached a penetration rate of 3.4% last year, exceeding the penetration rate of over 50% of snack subcategories. With the rise of new media and short videos, small-town youth have gradually undergone a role transformation. Taking a certain IP watch milk tablet as an example, from the product's rise to its hot-selling stage, the penetration rate among small-town youth has remained high, and there was no reversal in the later stage. The times have made them a new generation of trendsetters. In recent years, surprisingly, during the initial stage of new product promotion, the penetration rate in the small-town youth market is higher than in the urban youth market. It is only two months after the outbreak that urban youth's consumption power begins to reverse. This is precisely the emergence of new media that has driven the role transformation of small-town youth, gradually turning them from trend followers into trend creators. The improvement in the consumption capacity of 'small-town youth' can be seen as part of the transformation and upgrading of Chinese residents' consumption. With better living conditions and more choices, the demand for a better life naturally rises. Such demand includes not only material aspects but also spiritual aspects. The importance of 'small-town youth' lies in the fact that they constitute a very important part of the 'olive-shaped society' that today's Chinese society aims to build. In other words, the 'small-town youth' between urban and rural areas, their daily life changes and growth experiences, to some extent affect whether we can achieve the development goal of expanding the middle-income group, and reflect whether the transforming China can embark on a higher-quality, more balanced, and more fully developed path. In this sense, the 'appearance' of 'small-town youth' in the consumption and cultural fields presents such a possibility and opens a different perspective. Although first- and second-tier cities have strong per capita consumption capacity, small and medium-sized towns have more population, so the market size is larger. In addition, small-town youth do not need to invest too much in buying houses, and they enjoy relatively low price levels, naturally having more abundant cash flow for consumption. In a highly commercialized society, it is often entrepreneurs who can first discover the value of a product or a market. However, behind the label of 'small-town youth', it is not just business, consumption, and the derived mass entertainment and attention economy. 'Small-town youth' have far richer meanings and connotations. Source: New Food Review (ID: zgsppj) -END-