Article at a glance:

Marketing to China's hinterland

• China's smallest cities and towns, the gateway between urban and rural China, are often omitted from the country's growth story as being too small or poor to care about. But our research into these centers of urbanization has revealed hidden pockets of wealth that shouldn't be overlooked.
• The most attractive consumer segment in these markets consists of the aspirants: some 35 million households with average monthly incomes of about 3,800 renminbi ($475)—not far behind the average income in China's biggest cities.
• This segment is spread out among about 12,000 towns and small cities that dot China's landscape. Companies must carefully weigh the costs of reaching them against the potential gains.
• Appealing to the sophisticated aspirations of the segment and effectively sealing the purchase at the point of sale could be critical.