« Start with tier 1 » is the most common piece of China advice and one of the least useful. Shanghai and Beijing are the most competitive, most expensive and most crowded markets in the country. They are where every foreign brand goes first, which is precisely the argument against going there first.
What the tiers actually tell you
- Purchasing power and the density of people who already buy imported goods.
- The cost of everything: staff, retail space, marketing, attention.
- How much competition you will meet from brands that arrived before you.
Better questions than « which tier »
- Where is the industry that buys my product? For industrial goods the answer is often a city nobody outside the sector has heard of.
- Where is my distributor actually strong? Their real coverage matters more than the map you had in mind.
- Where can I afford to be present, repeatedly? Being a real presence in one secondary city beats a token presence in three major ones.
Regional concentration is a feature, not a limitation. A brand that is genuinely known in one province is easier to expand than one that is faintly present nationwide.