Young people become major driver of consumption upgrading in China
By Li Jie, People’s Daily Overseas Edition
Young people in China are becoming the main consumer group of many popular products, including “mystery” toy boxes, sneakers, designer toys, garage kits, e-sports products, as well as high-end cosmetics and beauty products, injecting fresh impetus into the country’s consumption upgrading trend.
“I try my best to save money, and then buy the stuff I want instead of putting the money into a bank account,” said a post-2000s college student nicknamed A Nian, who decided to finally place the order for a new Apple product over a month later after she was attracted by the product.
According to A Nian, she could afford the product with the money she had saved.
Many of her friends have basically the same attitude towards consumption as her, A Nian said, adding that “They are willing to spend money on things they like, whether for better looks or following fashion trends, or simply because they want to have the same products people around them have.”
Although young people born after 1995 or 2000 may not have much disposable income, as they are either still students or newcomers to workplace, they dare to spend money, which is regarded as a distinct feature of the age group.
Partly because of the rise of China’s Generation Z (people born between 1995 and 2010), the country’s luxury sales were estimated to grow by a stunning 48 percent in 2020, when the global luxury market declined at an expected rate of 23 percent, according to a report from Bain & Company.
The report added that the purchase of luxury collaborations and limited editions by people born after the 1995s grew 300 percent to 400 percent between January and October 2020.
Data also show that young consumers between the ages of 18 and 29 account for over 57 percent of the consumers of high-end luxury beauty brands. Meanwhile, the post-90s generation has become the largest potential consumer group in luxury car industry.
China has about 170 million people aged between 20 and 29. As people in the age group is about to enter a golden age of career development and income growth, their spending habits are expected to become more personalized and quality-oriented.
Since 2010, Internet-related industries have risen in China and e-commerce has brought unprecedented convenience and efficiency to consumers’ shopping experience, according to Fu Yifu, a senior researcher at the Suning Institute of Finance, noting that the country is witnessing more personalized and quality-oriented consumer behaviors and more distinctive features of consumption upgrade than ever.
As the Chinese economy and society continue to advance while residents’ income rises, more and more consumers have developed an awareness that they should spend money for themselves, Fu noted, adding that consumer units in the country have also begun to shift from households to individuals, and that spending on personalized and brand products has grown rapidly.
Young consumers have shown distinguishing features compared with consumers from other age groups, according to Li Yang, an associate professor of marketing at the Cheung Kong Graduate School of Business (CKGSB).
They are more confident, pursue individuality, have diversified interests, enjoy social interaction, and feel a stronger sense of identity in domestic brands, Li added.
The rise of young consumers means that their personalized consumption of quality products is expected to promote industrial upgrading and bring enormous opportunities to the high-quality development of industries and economy, Fu said.
Li believes that more domestic brands will emerge in the future. Driven by consumer demand, domestic products and brands will have brand new cultures and values, and embrace a boom period, according to Li.