Why you should understand the Chinese millennial generation
The Chinese millennial generation has grown up. According to the Chinese Sixth Nationwide Population Census, China's Millennial Generation has about 415 million people, accounting for 31% of the total population. In the next few years, the millennial generation is expected to become the majority of labor and the majority of consumers. They will reform China and the world.
Millennials make online shopping and mobile payments mainstream in China.
The millennial generation is the first generation growing up with the Internet in the history. Their access and acceptance of internet make online shopping and mobile payments mainstream. Online shopping, online ordering, online socializing, all daily needs can be solved online; they hate everything that they have to line up for, such as paying water fee, paying the electricity bill, paying fines, and even getting married or divorced. They never want to go to these kinds of places and waste their time. With the popularity of smartphones and the development of Internet technology, all payments could be made on mobile phone now.
Online shopping has become a national pastime in China, with approximately 77% of netizen using it as their favorite leisure activity. The annual "Single Day," the country's biggest yearly online shopping spree on November 11th, fully reflects this enthusiasm. For example, Alibaba's promotion has generated sales of RMB 121 billion ($25.3 billion) this year. In 2017, the transaction volume of China's online retail market reached 1,715.1 billion yuan, up from 3,155.6 billion yuan in 2016, an increase of 39.17%. 80% of the sales were brought by Millennials. They already changed the whole retailing system.
Millennial generation promotes credit consumption in China
In 2017, Alipay's national bill showed that among the 100 million Ant Check Later users, Ant Check Later was the most popular online credit payment method in China, China's “Millennial Generation” accounted for 86.5%, and one out of four post-90s used the Ant Check Later. In 2017, the number of the people who used to pay through Ant Check Later exceeded 3.2 billion, an increase of 344% over the previous year.
With the promotion to Millennials, borrowing has also achieved scale expansion and user acquisition. At present, the number of cumulative service users has exceeded 10 million, and the accumulated loans have exceeded 300 billion yuan, meaning that “millennials” prefer to spend ahead of time.
What is the consumption potential of the “Millennial Generation”?
The millennial generation grows up in the period of China's economy booming. Since the reform and opening-up policy started in 1978, the Chinese economy had experienced a long-term high-speed growth. China's total GDP in 2017 was equivalent to nearly 150 times that of 1980. In the same period, China's urbanization rate had also accelerated since the 1980s. As a result, the “millennials” are entirely different from the previous generation. They fully enjoy the dividend of economic growth. Most of them have not experienced serious shortages, so they’re more willing to pay for themselves.
According to the research report of CITIC Securities, “Millennial Generation” has relatively distinctive consumption characteristics in various fields of “clothing, food, housing, cars”, as follows:
1) Clothing: Personalization and the internet.
Millennial Generation hopes to be different and wants to pursue individuality. However, because of the relatively limited economic condition, they are more willing to buy the most wanted clothes with the least amount of money. Thus, they like to compare the online sales prices throughout various sales channels, and this leads to the flourish of online shopping.
(2) Food: Pay more attention to experience and prefer low-end consumption.
The millennial generation is not easily affected by advertising and because of their preference of taste, environment, and service. The millennials are willing to share the experience online, which brings out some online companies like Meituan.com and Dianping.com. Also, due to limited economic strength, they do not often go to high-end restaurants. Instead, low-end restaurants with distinctive selling points are more attractive to them.
(3) Housing: Pay attention to the quality over the price.
According to a survey conducted by the 58 City Real Estate Research Center, no matter whether it is in a big city like Beijing or other smaller towns, the most concerned topic for young “Millennial Generation is whether the living environment is comfortable. The consideration of rent, transportation and roommates come after the concern of living environment although it means that they have to pay a higher rent.
(4) Cars: Appearance, quality, and power of the brand awareness.
Millennial generation likes a car with both good appearance and quality. Take the post-90s for example. According to the survey of Netease Auto's “Traffic Consumption Report on Young Consumer Groups after the 90s”, 49% of the post-90s car buyers in China pursue appearance and style, while 48% of the post-90s car owners pursue quality and reliability. Besides, German car brands are most favored by them, followed by Japanese and American brands.
The hardest generation? Anyway, the working hours are getting longer.
Compared to the previous generations, the working hours of millennials are unprecedented. A survey shows that 84% of respondents work more than 40 hours a week, 30% of them work even more than 50 hours a week, and 25% of the respondents do two or more jobs at the same time. The survey also shows that 43% of China's millennials are expected to work long-term; their expected retirement age is 65, and even 18% of them plan to work continuously. This data is outstanding even on a global scale. Only Japanese work more than Chinese people; more than 33% of Japanese are willing to work until the end of life.
It is hard to be attributed to the individual struggle. The fact is that the production is in need of the society and the cost of living are continually rising. However, the retirement age is continuously being postponed, and the trends shall continue. Millennials are the first one-child generation in human history. The typical Chinese family is called “4-2-1”, which means one young person will afford four older people’s pension at least. It will irrevocably delay the retirement age. Another thing that brings much pressure to millennials is that the real estate price rose up nearly 20 times during the last 20 years. If you want to buy a house, a big loan is expected .
The Millennials has dominated online consumption market. As the time goes by, it will become the dominant power of China in the next twenty years. Learning more about them is a compulsory course for business to succeed in the changing markets of China.