11 Aug 2017
China’s Middle-Class Consumers: Lifestyle and Spending Patterns of Post-80s Generation
- Chart: Expectations about Future Income_Impact of Economic Slowdown on Daily Expenditure
- Chart: Products Purchased in the Past Year
- Table: Post-80s Lifestyle: More Westernised
- Table: Attitude Towards Quality, Spending, Trends and Brands
- Table: Services Consumption Preference of the Post-80s
- Chart: Services with Higher Consumption Frequency Than Before in the Past Year
- Table: Reasons Driving Consumption of Innovative or High-end Services
- Chart:In travelling, I would like to sleep until I wake up naturally and would enjoy the exotic life
- Chart: I prefer training courses because they can raise my professional qualifications or help me
- Chart: I have used ‘future money requiring interest payment’ and paid interest through instalment
- Table: Heavy Users of Online Shipping and Mobile Apps
- Chart: Ways of Browsing and Placing Orders in Online Shopping
- Chart: Attracted by “guess what you like” Products Offered on Shopping Sites
- Table: Design of Focus Groups
- Table: Design of Online Questionnaire Survey
- Table: Average Monthly Household Income of Respondents (RMB)
- Table: Occupation of Respondents, by City (%)
- Table: Education Level of Respondents, by City (%)
- Table: Marital Status of Respondents, by City (%)
While the number of China’s young-generation consumers is growing, their income is also rising rapidly. According to United Nations estimates, the proportion of the Chinese population aged 25-34 will climb from 14.6% in 2010 to 16.7% by 2020. A survey conducted by the Hong Kong Trade Development Council  finds that group, brought up in an age when China experienced immense economic growth, is more confident and optimistic about their future income and spending than older generations. They buy high-tech and new investment products, and have a liking for relaxing holidays, exercise and entertainment. They also keep an eye on trendiness and personal style. They accept the practice of “spending future money” and their lifestyle is more westernised than that of older generations. Online businesses looking to market their products to this post-80s generation should place more emphasis on data analysis and targeted promotion.
Confidence about Future Income and Spending
Although China’s economic growth has slackened in recent years with its growth rate entering a “new normal”, mainland middle-class consumers are still upbeat about the prospects for their income and spending. According to the present survey, 81% of the mainland middle-class respondents expect their income to continue to increase in the coming two to three years. Regarding the impact economic slowdown may have on day-to-day consumption, 51% of the respondents say they will spend more than before in pursuit of a higher quality of life.
Post-80s consumers, particularly those in the 25-30 age group, appear to be more upbeat about future income and spending than those in the older age groups. Among the respondents aged 25-30, 88% expect their future income will increase while 58% say they expect there to be no impact on their income, but they are likely to spend more than before to improve quality of life. In comparison, just 73% of those in the 37-50 age group expect their future income will increase, while 46% agreed with the “no impact on income; likely to spend more than before to improve quality of life” response.
Keen Interest in Latest and Limited Edition Electronic Products
The survey shows that “imported foods/beverages/health foods” was the product category with the highest purchase rate among consumers of different age groups in the past year. However, the post-80s generation is clearly more interested in the “latest models of electronic products and high-tech products” and “limited edition products” categories than their older counterparts. Among respondents in the 25-30 age group, 64% have bought “latest models of electronic products and high-tech products” in the past year, a figure significantly higher than the 56% of those aged 37-50. 17% of the respondents in the 25-30 age group have purchased “limited edition products” in the past year, compared to just 10% of those in the 37-50 age group. However, the proportion of respondents in the 25-30 age group who have bought organic products in the past year is relatively low, at 57%. 66% of the respondents aged 37-50 have done so.
Post-80s Lifestyle: More Westernised
Compared with their older counterparts, the post-80s generation respondents (especially those aged 25-30) have a more westernised lifestyle. For instance, 34% of the respondents in the 25-30 age group and 31% of those in the 31-36 age group agreed with the statement that their “diet is becoming more and more westernised (eating more bread, butter, steaks and salads)”, while only 23% of the respondents in the 37-50 age group maintain such a diet. The younger respondents also patronise western eateries more often and are more likely to agree that they “keep an eye on information about foreign trends so (they) can learn more about new trendy products”.
More Willing to Splurge on Better Quality Products and Services
In recent years, middle-class mainlanders’ demand for premium products has risen greatly. In this survey, 60% of the respondents said “the grade of products and services I use now is higher than before, even though this means greater spending”. 63% of the respondents in the 25-30 age group agreed with this statement, higher than the 58% of those in the 37-50 age group. Compared with the older respondents, the post-80s generation consumers tend to keep up with trendy and novel products and enjoy trying them; they also find it important whether the brand is fashionable and stylish.
More Willing to Pay for Services
Compared with their older counterparts, the post-80s generation consumers are clearly more interested in buying a number of the products and services singled out in the survey – including new investment products, individual travel to Hong Kong, Macau and Taiwan, fitness club memberships, stage performances, information on trends, and professional training. Among respondents in the 25-30 and 31-36 age groups, 45% had purchased fitness club memberships in the past year, while only 38% of those in the 37-50 age group had done the same. 44% of the respondents aged 25-30 and 43% of those aged 31-36 had spent money on individual travel to Hong Kong, Macau and Taiwan, a figure significantly higher than the 33% of those in the 37-50 age group who had done so.
A greater number of respondents in the 25-30 and 31-36 age groups said they spent money on fitness club memberships and individual travel to Hong Kong, Macau and Taiwan more often than before. For example, among respondents in the 25-30 age group, 17% said their frequency of spending on individual travel to Hong Kong, Macau and Taiwan is higher than before, compared with only 9% of the 37-50 age group.
Pursuing Trends and Trying New Things
In this survey, 66% of the respondents said “pleasing themselves” is the main force driving them to spend on innovative or high-end services, while 65% said their main motivation was to “experience better and more unique services”. These were also major forces behind the consumption patterns of the post-80s generation as well. However, the desire to “follow trends, and be an early adopter” appears to be an even bigger driver behind the post-80s generation spending on innovative or high-end services, to a far greater extent than it is for older age groups. 37% of the respondents in the 25-30 age group named this as the reason behind them buying innovative or high-end services, compared with only 22% of the 37-50 age group.
Trend Towards Relaxing Holidays and “Spending Future Money”
When asked about their travel preferences, over 50% of all respondents said they liked “tours with detailed schedule and planning”. Only 12% declared a preference for traditional guided tours. This suggests that the travel requirements of the middle class are likely to evolve from “self-guided trips” to in-depth “private tailor-made trips” and “high quality unwinding vacation trips” with specific objectives. The post-80s generation likes unwinding vacation trips more than their older counterparts, with 37% of the respondents in both the 25-30 and 31-36 age groups saying that “In travelling, I would like to sleep until I wake up naturally and would enjoy the exotic life at an easy, slow pace”, compared with 30% of those in the 37-50 age group who said the same.
Probably due to the fact that the post-80s generation, especially those aged 25-30, left college relatively recently, their demand for professional training is higher than that of their older counterparts. It’s also worth noting that the proportion of respondents in the 25-30 age group who have used “future money requiring interest payment (excluding big-ticket items such as real estate and car)” is markedly higher than that of older age groups. This shows that the younger generation is more receptive to “spending future money” and using related financial services.
Heavy Users of Online Shipping and Mobile Apps
The use of online shopping or overseas online shopping (a practice commonly known as “haitao”) by mainland middle-class consumers has grown significantly in the last few years. On average, the survey’s respondents shopped online 63 times a year, or 5.25 times a month – a figure far higher than the average 1.43 times a month found in the 2013 survey. And post-80s generation consumers carried out online shopping and haitao more frequently than their older counterparts.
The survey also shows that the use of smartphone apps to place online shopping orders has far surpassed that of computer browsers, with 60% of all respondents saying they often use mobile apps on their smartphone to do so. Respondents in the 25-30 age group use smartphone apps in this way much more often than their older counterparts. This suggests that industry players targeting post-80s generation consumers should improve their mobile marketing and gain more knowledge about the internet lifestyle of these young consumers.
Online Shoppers More Attracted to Buy by Targeted Promotion
The survey found that when consumers make purchases at shopping sites, they are easily lured by special offers to buy products outside their intended purchases. Only 15% of the respondents indicated that they would not be lured by the promotional gimmicks of shopping sites. 35% of all respondents said they would be attracted to buy by the “guess what you like” products offered on shopping sites but that figure increases to 39% for the 25-30 age group. This indicates that the post-80s generation consumers, who are more keen on shopping online, are also more likely to be attracted by products promoted on websites based on data analysis and targeted marketing strategy.
With its high spending power and penchant for consumption, the mainland middle class is the main target of Hong Kong manufacturers and traders eyeing the mainland market. HKTDC Research has carried out several studies on mainland middle-class consumers in the past for the purpose of tracking and understanding their spending patterns, mentality and changes in lifestyles in order to provide points of reference for Hong Kong companies wishing to tap the mainland market.
Apart from trying to discover the general characteristics of middle-class consumption behaviour, the present survey also explores the impact China’s 13th Five-Year Plan has on middle-class consumption and way of life. One of the policy directions of the Plan is promoting new consumption patterns, which includes encouraging the consumption of green, fashionable and quality products, encouraging the development of custom-made services to meet the demand for personalisation, expanding service consumption, and advancing online/offline integration. Moreover, to take into account the post-80s consumers, who grew up in times when China experienced substantial economic growth and whose upbringing is very different from that of their parents, efforts were made in this survey to reflect their consumption characteristics.
The survey was carried out in January 2017 in eight mainland cities where a total of 2,000 consumers were polled by online questionnaire. Before conducting the questionnaire survey, six consumer focus group discussions were held in Shanghai, Wuhan and Chengdu (two in each city). The objective of the focus group discussions is to further understand the spending mentality of mainland consumers by way of qualitative analysis.
 See Appendix for details of the survey.