(Source: https://pltfrm.com.cn)
Introduction
China’s vast geography and economic diversity mean a one-size-fits-all pricing strategy doesn’t work. Consumers in Tier 1 cities like Shanghai have different spending behaviors than those in Tier 3 or 4 cities. For overseas brands, region-specific pricing is critical to market penetration—but it doesn’t have to be expensive. This article explores affordable ways to execute region-based pricing variations while maintaining profitability and operational simplicity.
1. Segment Regions by Purchasing Power and Platform Penetration
1.1 Understand City Tier Structures
- Tier Breakdown: Tier 1 cities are price-tolerant but competitive, while Tier 3–4 cities are more sensitive to value and promotions.
- Strategic Tip: Offer full-price SKUs in Tier 1 while pushing discount bundles or economy-size variants in Tier 3+ regions.
1.2 Map Platform Usage by Region
- Douyin & Kuaishou: High penetration in lower-tier cities—ideal for value-oriented pricing.
- WeChat & Xiaohongshu: Better suited for Tier 1–2 users who prioritize brand image and premium offers.
2. Localize Promotions Without Splitting Inventory
2.1 Use Platform Targeting Tools
- Geo-Based Campaigns: Launch region-specific promotions using Tmall, JD, or Douyin’s backend location targeting.
- Affordable Execution: No need for separate inventory pools—just target different ads or coupon codes per region.
2.2 Adjust Discount Frequency by Region
- Insight: Lower-tier markets respond well to regular discounts and flash sales.
- Action Step: Create rotating promo calendars with higher cadence in value-conscious cities.
3. Modify Price Points Based on Regional Preferences
3.1 Adjust SKUs and Package Sizes
- Example: In Tier 1 cities, promote premium multi-pack or full-size bundles; in Tier 3–4 cities, offer single-use or smaller trial versions at lower unit prices.
- SaaS Tip: Use e-commerce analytics to track which bundles convert best by region and adjust offers accordingly.
3.2 Match Price Psychology
- Localization Tip: Use culturally familiar prices—¥88 in southern cities (luck symbol) or round numbers like ¥100 in northern provinces.
- Impact: Increases relatability and removes friction from the buyer decision process.
4. Keep Operations Lean With Tech-Driven Flexibility
4.1 Centralized Pricing Dashboard
- Software Use: Implement SaaS-based pricing tools to control region-specific promotions and track price elasticity without duplicating listings.
- Efficiency: Reduces operational complexity while enabling agility.
4.2 Test and Iterate in Micro-Markets
- Pilot Programs: Launch test bundles or price points in select cities to validate demand before scaling.
- Feedback Loop: Gather user behavior data and tweak content, pricing, or messaging for full rollout.
Case Study: Korean Beauty Brand Optimizes Conversion Across City Tiers
A Korean skincare brand used region-specific targeting on Tmall Global and Douyin to price its starter kits. In Shanghai and Shenzhen, it promoted full-priced gift sets with luxury packaging. In Changsha and Zhengzhou, it offered ¥88 trial kits via geo-targeted short videos. Despite using the same inventory, the campaign drove 40% more conversions in Tier 3 cities and increased the average cart size by 25% in Tier 1 cities—all without raising fulfillment costs.
PLTFRM is an international brand consulting agency that works with companies such as Red, TikTok, Tmall, Baidu, and other well-known Chinese internet e-commerce platforms. We have been working with Chile Cherries for many years, reaching Chinese consumers in depth through different platforms and realizing that Chile Cherries’ exports in China account for 97% of the total exports in Asia. Contact us, and we will help you find the best China e-commerce platform for you. Search PLTFRM for a free consultation!
