Reaching China's Next 600 Cities

Demand for consumer goods in hundreds of cities across China is increasing. While Chinese companies in smaller cities look to expand into larger cities, their international counterparts are trying to do just the opposite. The China market is no longer limited to Beijing and Shanghai, or even provincial cities such as Changsha, Hunan; or Harbin, Heilongjiang. International companies that do not ramp up their sales, marketing, and distribution efforts risk losing touch with consumers, losing market share to domestic and foreign competitors, and becoming marginal players. China's smaller cities are unfamiliar territory for many international consumer goods companies, which often face competition from Chinese counterparts that already know these markets well. Small cities have been serving as incubators for Chinese companies before they expand into larger markets. In the years to come, many relatively unknown Chinese consumer brands from smaller cities will achieve scale and compete with existing market leaders in various consumer product categories.