Outside Beijing’s fifth ring road, apps tap leisure time in small-town China

Markets in China’s largest cities are slowing and increasingly saturated. Many tech entrepreneurs are now pushing out into third- and fourth-tier cities and rural areas for future growth. As they do, enter a world where the texture and tempo of life can be quite different. Companies that want to thrive in small-town China must adapt to local logic. Those that do succeed are worth watching: they’re pioneering the strategies that are most likely to work in the emerging online markets of rural Asia and Africa.

Interest in this “other China” has grown in recent years with the rise of budget e-commerce platform Pinduoduo. Over 65% of its users come from third-tier cities and beyond, where incomes of less than RMB 3,500 (about $522) per month are the norm. Many are recent arrivals to e-commerce, buoyed by growing incomes, smartphone penetration, and 4G coverage.

Business media have dubbed this the “market outside the fifth ring road” (wuhuanwai shichang), referring to a Beijing orbital highway that draws a mental line between metropolitan China and the land beyond. In many ways, they are a world apart from the urban middle class that drove the first wave of e-commerce in China. The average spend on Pinduoduo is $6, compared to $60 on Jingdong.

What you get

Full access to all premium content and our full archives

Members'-only newsletters

Preferential access and discounts to all TechNode events

Direct access to the TechNode newsroom