[Editor's Note: Much has been made of China's potential for a consumer, rather than export, driven economy. The potential has caused marketers to salivate in expectancy for centuries. However, estimates of 40 to 50 million Chinese consumers with sufficient disposable income equate China to roughly the size of the Italian market. But has the equation finally begun to change with the latest generation of Chinese to enter the workforce?
Today's post has been graciously contributed by Lin Bai, who, as a professional analyst of trends, writes from the perspective of that new generation of Chinese. Ms. Bai, born and raised in China, is a New Ventures Analyst for Metan Development Group. Prior to that, she was with Trimtabs Investment Research and International Data Corporation. Ms. Bai was educated at the University of San Francisco and the University of London.]
The Gold Mine: China’s “Post-80s” Generation of Consumers
As one of China’s post-80s generation (aka Generation Y), I still remember my glory days in high school. A pair of Nike Michael Jordan sneakers, a Motorola pager, or a Giant-brand mountain bike – and you were the most popular kid in your class. In Mainland China, the post-80s generation refers to those born after 1980 and before 1990. According to China’s census yearbooks, 200 million children were born during this time period. This generation is gradually becoming one of the most lucrative segments ever coveted by marketers, the so-called China “gold mine”.
Our “post-80s” generation has more disposable income and a greater appetite for consumption, partly driven by international ties. We are addicted to the Internet and video games and constitute the majority of online shoppers. We are more receptive to new things, follow latest fashion and trends, and are quickly becoming the face of China.
As a result of China’s one–child policy, this generation is cursed with the “me” factor. With no siblings to compete with, we are considered the “little emperors and the little princesses” of the family. And unlike children in the US or in the other countries, this generation is fully financially supported by their parents well into their twenties or, at the very least, until they graduate from college (many of them still rely on their parents even after they get a job). In fact, according to the China Research Center on Aging, a surprising 30% of working age employees in China are supported by their parents.
The post-80s generation has a markedly different behavior in consuming than their parents. This generation believes that money is something to be made and not saved. We are confident that we can (and will) make big “bucks” in the future - especially after an intensive education starting at primary school. We also believe if we cannot afford a high-rise apartment or a Mercedes Benz with our current salary, why not spend and pretend that we can. Thus, an introduction to the so-called “Moonlight Group” (people who live paycheck to paycheck, spending it all by month’s end). We also focus less on a product’s usefulness than on its appeal. Purchases are heavily based on appearance, popularity, and what I like to refer to as the “flash” factor—how much attention they would get from the others if they own it.
In the next few years, the post-80s generation will constitute (as some of them already do) most of China’s entire middle-class. Not only are we better educated and start earlier at making substantial money than previous generations, we are doing this across all industries including sports, entertainment, IT and business. Piano prodigy Lang Lang, world champion hurdler Liu Xiang, NBA basketball players Yao Ming and Yi Jianlian are some of this generation’s celebrities – who are also representatives of this new generation of China’s “gold mine”. In fact, in Forbes’ 2009 annual “Top 10 Chinese Celebrities List”, 50% of those listed belong to the post-80s generation.
This generation’s product consumption was a key factor in China's retail growth in 2008 - representing 20% of all spending (China Market Research Group).
As a part of this lucrative member of this post-80s generation, I’m actually quite excited to see what the future holds in China. I can proudly boast that I’m making history and changing China as an economic force. Whether it’s for the better (or for the worse), I’m a proud part of that change. So, the next time you decide you want to tap into the largest group of consumers in the world – think of this “spoiled, egotistical, self-centered, and rebellious” crowd. Think China and join the gold rush!
