Young Chinese consumers spend good in the midst of slower economic growth

Hong Kong – Young people China may not buy cars or houses, but there is always money for milk tea and toys.

It is a difficult period to be a young person in China: the second world economy is growing much slower that it was when their parents were their age, with the American-Chinese Trade War threatening weigh more on growth. Competition for jobs is cutaneous and young people’s monthly unemployment stands at About 15% on averagewith Chinese universities projecting a record 12.22 million new graduates This year.

Feel “besieged” in life Faced with these economic obstacles, young Chinese consumers in the country and abroad find smaller purchases.

“I go to make myself happy,” said Kitty Lu, a 23 -year -old Chinese student in Melbourne, Australia. “It seems a bit reckless, but I have a number in my mind.”

Lu said most of her expenses were going to support the celebrities she loves. Sometimes it allows itself to “small indulgence” in the form of “blind” toys such as Disney Dolls or the Monster figurines LABUBU who have become a global frenzy.

“To be honest, I am not in these dolls,” she said, adding that the purchase consists more of having fun with friends when they open the blind box to see which doll is inside.

Lu spending habits are reflecting an increasing trend in recent years in young Chinese people who show “low interest” for large purchases such as houses and cars, but embrace food and cultural products that offer “instant emotional gratuity”, according to the Fudan Development InstituteA reflection group based in Shanghai.

This phenomenon, also known as “emotional consumption”, has led to an average annual growth of around 12% in industries, including films and games since 2013 a report In March by the Chinese Kingsoft Internet Services and Services Company. The overall emotional consumption market is expected to exceed $ 270 billion this year, according to the report.

Sweet drinks, low price, happier life

One of the largest beneficiaries of Chinese consumer trends was the country’s drinks sector, which according to S&P Global should reach 6% this year.

Mixue, a bubble tea chain known for its cheap drinks, now has more stores in the world – Over 45,000With almost 10% of them outside of continental China – that any other food channel and drink, including McDonald’s, which has a world number of stores 43,000, And Starbucks, with 38,000. In March, mixing actions jumped more than 40% during its market debut in Hong Kong.

The brand’s success comes largely from its low prices and its rapid expansion, especially in less developed cities, because the Chinese adjust their spending habits while attacking employment safety and other economic concerns.

Kelsey Yu, 23, a graduate student in Beijing, said that she had bought a bottle of mixed lemonade for the equivalent of less than $ 1 during a visit in April in the Chinese city in southern Jieyang.

“The drink has cut off my thirst. It had a large part and was cheap,” she said, adding that mixing items are “better value for money” than those of many local competitors.

Yu said that as a gourmet, she drinks tea drinks at least once or twice a week and can “give herself a little more” during her trips.

“I usually order milk tea when I feel tired or if I just want to have a good time,” she said. “But I have self -control. So I don’t have it every day.”

A complicated image of Chinese consumption

Although US officials often say that Chinese consumers do not spend enough, the situation is not as clear as it is represented, analysts said.

During the last quarter of a century, Chinese consumption spending increased on average 8% or more each year, one of the highest rates among major economies. But it was exceeded by the investment, making consumption a smaller part of the overall GDP of China.

Speaking during the “Summer Davos” event of the World Economic Forum in Tianjin on Wednesday, Chinese Prime Minister Li Qiang said that China had sought to become a “consumption power of the size of a mega”.

Stimulated by government subsidies, China retail sales increased by 6.4% in MayThe fastest rate since the end of 2023.

Sales during the 618 online shopping festival of this year, which ended on June 18, were a record of 855.6 billion yuan (119 billion dollars), according to Synun of the retail data supplier15.2% higher than last year.

Young Chinese in particular “live frugally to spend big”, according to Research supported by the State. Although they are concerned about the budget with regard to daily necessities, they “do not hesitate to make follies” for their hobbies and their happiness, he said.

“I prefer to spend 300 yuan ($ 42) over a good meal, and if the food is really good, I think it’s worth it,” said Yu. “But if it’s a 300 -year -old clothes, I could hesitate.”

In the midst of the economic challenges of China, consumers of the middle class are less concerned with the brand and prefer cheaper alternatives, said Yaling Jiang, founder of Aperturechina, a consulting company specializing in consumer research.

“Now the backup is considered cool, and the search for value is considered cool,” said Jiang. “I think the slowdown has definitively changed the culture of expenses.”

Chinese colmoles nowadays spend money almost exclusively for the first and second floors, where food and drinking stores are concentrated, Jiang said.

“People are walking in the shopping center with a cup of milk tea or coffee,” she added, looking at what is available in stores before returning home to buy cheaper online alternatives.

Chinese luxury market, which had taken into account Almost a third of world salesdecreased from 18% to 20% last year, according to A January report by Bain and Company.

“I think that the emphasis is less placed on the comparison of social status, and the more the emphasis on what brings them personal happiness,” said Lynn Song, chief economist for Greater China to ING, a post-paymic change that has also been seen elsewhere.

Consumers in China are negotiated and spend, according to the sector, said Shan Guo, partner of Hutong Research, an investment consulting group based in Hong Kong.

“They do not buy luxury bags, but they buy Pop Mart,” said Guo, referring to the Chinese retailer behind Labu toys. “Labu can be quite expensive.”

Despite the concerns about slower economic growth in China and elsewhere, LE, Melbourne’s student said that her friends were always “completely ready to spend for fun”.

“These are not big spenders,” she said. “They are just happy to treat themselves when they have a good time.”