• Naomi Head

Young free spenders: The power of the digital youth

Originally published on April 1 2020 for Red Unit

A look at why businesses should be targeting China's millennials to fortify their future

Photo credit: Raychan/Unsplash

China’s 18 to 34-year-olds are behind the country’s spending growth making up 60 percent of the total contributions to their economy. They may only be a quarter of the Middle Kingdom’s 1.4 billion citizens, but they’re not afraid to show their financial power or voice their opinions. Don’t be fooled, there’s more to them than meets the eye.

Why target the 18-34 market?

Chinese Millennials and Gen-Zers are motivated to spend their money in different ways.

But the main reason to target this particular market is their lack of brand loyalty and their desire to try something new. Those born in the 1990s are most willing to experiment as they look to their peers and digital shopping platforms to find the next big thing. Whereas the 1980s generation are looking to realise the lifestyles their parents dreamt of after Deng Xiaoping’s reform and opening.

Photo credit: Red Unit

These aspirations have trickled down to tier three and four city consumers. The 1980s and 1990s generations moved away from home and have experienced metropolitan life firsthand. Now they are looking to bring a sense of global citizenship home.

Tier three and four cities remain untapped and consumers are left hunting for new products that align with their lifestyle and values in a largely empty market.

For this reason, e-commerce platforms are lifelines in tier three and four cities. Delivery networks are in their heyday in China, aiding with the delivery of medicine and supplies during the COVID-19 outbreak, as well as continuing to deliver shopping to busy consumers. But these are the tip of China’s e-commerce iceberg.

China’s tech superstar Alibaba has a host of platforms that have created a symbiotic consumer lifestyle including Eleme, Alipay and Taobao. Each app makes online living easier and gamifies spending in a way that makes it almost impossible to exist in China without consuming. Alibaba isn't the only game in town though, Tencent's WeChat is not to be trifled with as users access a plethora of services through one app and its mini programmes.

What do they spend money on?

China is rapidly evolving and the population has more access to information, education, and travel. As a result, young shoppers have become more conscious of what they are buying, consuming, and experiencing. They are more affluent than ever before and their economic power is reflected in the products they spend their money on.

The days of luxury shopping aren’t behind us, but young Chinese consumers are spending their money on fresh milk and organic produce instead of cosmetics, skincare or fast food.

Across China there has been a growing movement for the zero-waste lifestyle and responsibly sourced food practices.

This trend is here to stay and several urban authorities, including Beijing and Shanghai, have rolled out city-wide recycling policies. While the tier one and two cities pilot these programmes and movements such as zero waste living continue to grow. Meaning tier three and four consumers are seeing the trickle-down effects of the country’s goal of reducing waste and emissions.

What drives the digital youth to spend?

Aside from their growing social conscience, it is considered a patriotic act amongst the 1990s and 1980s generations to support their economy, but each group has its own motivation for spending. The 1980s generation are at the top of their careers with the economic power to support lifestyles their parents dreamt of. While consumers born in the 90s are digitally savvy and want to bring the world to their doorsteps.

What turns them on to a product?

The 1990s generation want to try new things, and unlike their elders, they are less likely to be brand loyal. This opens them up to unique products and companies that share their values.

The 90s spenders use at least 3 to 5 hours looking at luxury goods and will consult up to 16 sources from social media and peer reviews before they purchase a product.

Photo credit: Red Unit

It pays to be in the social media game as younger generations are more likely to buy products recommended by influencers and online bloggers or snub those deemed unworthy by the online shopping community. 1980s consumers are more concerned with quality products and emulating the lifestyle Western media showed after reform and opening in the late 80s and early 90s.

What can Red Unit do for you?

Now is the time to bring your brand to China. Tier three and four consumers look beyond their tier one and two counterparts with the curiosity and drive to discover new, high-end products. With Red Unit’s strategy, your brand can integrate seamlessly with the local market. At Red Unit we immerse ourselves in your story and create unique, story-driven campaigns to bring your values and products to this untapped market.

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