Growth and development in China over the past few years has been remarkable. As the coastal and eastern cities begin to fill up, numerous investment firms have begun to move inward towards the second, third and even fourth tier cities.

Lunar Capital, though currently based in Shanghai, has stated that one of its goals is ‘inward and inland growth.’

“We believe if you’re going to be successful in these regions, you can’t just rely on a team that’s sitting in Shanghai, you have to have extra resources, whether it’s in our Chengdu office or people who are based locally with our portfolio companies full time,” explained Derek Sulger, a founding partner of the company.

Adam Roseman and his firm ARC China have recently invested in a tier four city’s clothing retail outlets. He agrees with Sulger’s statement, and believes it is indeed important to be on site in order to manage business and to utilize the potential of these areas. ARC China invests in several second and third tier regions like Fujian, Liaoning and Szechuan.