How to promote 5G packages in small and medium cities

According to the May operating data released by the three major operators, the total number of 5G package users nationwide has reached 450 million, including 220 million China Mobile, 120 million China Telecom, and 110 million China Unicom. It is estimated that the penetration rate of 5G packages is 27.9%, which means that about 30% of users across the country have upgraded to 5G packages.

From the perspective of package value, the current standard price of 5G packages launched by the three major operators is above 128/129 yuan, and the superimposed upgrade or new discount may be lower. Compared with 4G packages of the same grade, 5G packages are in terms of traffic, voice and rights. The content is slightly better. Therefore, regardless of whether the user has upgraded the 5G terminal, whether the 5G signal is covered by the residence/work location, the 5G package is a more cost-effective choice. Therefore, we can speculate that a considerable part of the current 5G package users are naturally upgraded from 4G high-value users.

From the perspective of the distribution trend of 5G base station construction, big cities> small and medium cities> rural areas. On the whole, large cities have high user demand and strong consumption power. 5G signal coverage is relatively good, while coverage in small and medium cities and rural areas is poor. Current 5G package users also mainly come from large cities, with low penetration rates in small and medium-sized cities and rural areas. But with the further construction of 5G base stations, how should small and medium-sized cities promote 5G packages? Can the current promotion model in large cities be replicated?

The rise of small and medium-sized cities, the new generation of consumption has become a new growth engine

With the acceleration of urbanization, the population and economic volume of small and medium-sized cities cannot be underestimated. A survey report on "China's Small and Medium-sized Cities Development Report (2019): Road to High-Quality Development" issued by the Institute of Small and Medium-sized Urban Development Research shows that as of the end of 2018, there are a total of small and medium-sized cities in mainland China (in a broad scope, including municipal districts including townships). ) 2,809, with a total population of 1.181 billion, accounting for 84.66% of the total population of the country; the total economic volume reached 76.43 trillion yuan, accounting for 84.89% of the national economic total.

In addition, the "McKinsey 2020 China Consumer Survey Report" pointed out that from 2010 to 2018, in third- and fourth-tier cities, the compound annual growth rate of households with an annual disposable income of RMB 140,000-300,000 reached 38%, which is higher than that of the first- and second-tier cities. 23% of the city. These wealthier families account for more than 34% of the population in third- and fourth-tier cities, close to the level of high-tier cities five years ago. The report also mentioned a new trend emerging in small and medium-sized cities—the new generation of consumption in low- and middle-tier cities has become a new growth engine. This important consumer group is represented by young women. They are not worried about the cost of living or future savings. Strong willingness to buy. They use Douyin and Xiaohongshu as their resident locations, starting with the latest generation of mobile phones, skin care products or cosmetics recommended by bloggers of grass-rooting beauty and makeup, and online celebrity check-in points when traveling. This is closely related to the rise of e-commerce platforms such as JD.com, Tmall, and Pinduoduo, because e-commerce platforms have helped brand owners extend their sales channels to lower-tier cities to a certain extent, and have promoted the increase in consumer spending by wealthy young people in lower-tier cities. According to the report's research data, “young shopping professionals” in second-tier and lower cities accounted for only 25% of the respondents, but contributed nearly 60% to the growth of consumer spending.

These two report data to some extent subvert our stereotype of low consumption power in small and medium-sized cities, and at the same time inject a booster for operators to promote 5G packages in small and medium-sized cities.

Differentiated play in big cities is strong, and small and medium-sized cities pay more attention to network quality

At present, in big cities with better 5G coverage, the consumption habits of different consumer groups are very different. Some are quite rational, pursuing quality rather than social recognition; some are pursuing the highest cost-effectiveness; some are cautious and not easy to consume Therefore, when operators promote 5G packages, they often create differentiated promotion strategies based on different user groups and different scenarios, and strive to obtain the largest customer scale.

Taking Guangzhou as an example, the current operators mainly promote 5G smart home integration, package integrated 5G number cards, gigabit broadband, smart home networking, high-definition TV, smart access control/security/lighting and other products in high-end communities. User promotion is mainly to build a quality network and build a good reputation. For ordinary communities, urban villages and even mobile users, the package tariffs, content, and product form will be increased or decreased to meet user needs. China Unicom even launched Wangkazhijia Broadband for frequent business trips, outings or mobile users, creating wireless mobile WiFi to expand the scale of broadband.

Compared with large cities, customers in small and medium-sized cities are more "rich" and "free". High housing prices and strong housing demand squeeze the disposable income of residents in large cities, while small and medium-sized cities have relatively lower spending power due to lower housing prices and living costs.

In addition, the overall job competition pressure in small and medium-sized cities is less than that in large cities, and users have relatively shorter overtime and commuting time, while living in Chinese entertainment and staying at home are longer. Therefore, the perception is more obvious when facing issues related to the happiness of life, such as the quality of the Internet.

Small and medium-sized cities need to pay more attention to refined operations to meet the needs of various groups

From a regional perspective, the living habits and spending power of residents in small and medium-sized cities are very different from the east to the west, and the north and the south are very different. Therefore, compared with large cities, small and medium cities are a more complex market.

In terms of users, the characteristics of young people's active attempts deserve more attention in the early stage of 5G package and smart home promotion. According to various consumer reports, the sinking market in third-, fourth- and fifth-tier cities is an important market for smart products. Among them, urban youths have shown higher willingness to pay for smart speakers, smart large screens, smart bracelets, and sweeping robots. In addition, young users in small and medium-sized cities have stronger social attributes, so operators need to pay more attention to product innovation and social attributes in the process of 5G promotion for young people to obtain better user impressions.

In addition to the user group of "young shopping professionals", small and medium-sized cities also include groups with spending power such as migrant workers and silver-haired people. Among them, migrant workers can settle permanently in cities and towns with the development of the "14th Five-Year Plan". Then there are more opportunities to achieve upward mobility of classes. The silver-haired group is a more obvious trend at present-the aging of the population. This group has a huge population and will be an important consumer market in the future. On the whole, young people are more willing to “early taste” and embrace new technologies. New urban residents pay more attention to the improvement of family experience, such as children’s education; while the silver-haired group pay more attention to health, wellness and tourism, so operators In terms of 5G promotion, it is necessary to actively adjust the content and rights of product packages based on the needs of different regions, different groups of people and scenarios, so as to achieve the goal of best meeting the needs of users.

In addition to public users, professional scene services require 5G

People in the communications industry often say that "4G changes life, and 5G changes society." With the further development of 5G, the development of operators in small and medium-sized cities is not only the acquisition of new users, but professional scene services are the operators’ larger market, such as e-commerce live broadcast, smart security, online education, smart healthcare, smart cities/ County seat and so on. Among them, the new business format based on short video and e-commerce APP live broadcast breaks the shackles of traditional offline sales, helps direct connection between consumption and production, and brings new opportunities for production and economic development in small and medium-sized cities. And 5G provides better quality and more stable network support for live delivery, while the corresponding collaborative development of high-definition technology and Internet of Things technology allows consumers to have a smoother and more consistent experience.

In terms of smart cities, operators have long established benchmarks. After China Mobile released the 5G+ plan in 2019, Zhejiang Mobile took the lead in establishing the country's first 5G industry alliance. Wuzhen Town Government and China Mobile Jiaxing Branch signed a 5G demonstration town construction strategic cooperation agreement to jointly launch the "Wuzhen 5G Demonstration Town". The project focuses on 5G+ conventions and exhibitions, 5G+ tourism, and 5G+ urban governance, selects key scenarios, creates bright spot 5G innovative application demonstrations, builds "Wuzhen Super Brain", and explores the construction and operation mode of smart towns. In the end, a smart future block with integrated management, housing, purchase and play can be realized.

The "14th Five-Year Plan" requires unswervingly building a digital China, accelerating digital development, and proposes classification to promote the construction of new smart cities, improve the city information model platform and operation management service platform, build a city data resource system, and promote the city's digital brain Construction and other goals. Driven by both policies and technologies, operators need to actively break away from the network access charging pipeline operation mode and explore more service-oriented business opportunities for professional scenarios. For small and medium-sized cities, we can actively explore local characteristic needs, seize opportunities for digital development, do a good job in tackling the needs of government units/commercial customers, and provide high-value solutions/digital information services.