Young people in China are often stereotyped as lavish spenders, more concerned with self-expression than saving for stability, yet they are among those most affected by the economic fallout from COVID-19 and many have been tightening their belts.
Economic observers had hoped that the easing of lockdown restrictions would have unleashed a wave of “revenge spending” to boost the economy, but there is evidence that spending habits among the young may have changed fundamentally.
According to Sixth Tone, an online magazine based in Shanghai which has published a special feature on young urban consumers in China, the shock from lost jobs and income has forced many to become thrifty – a trend which some have embraced as a lifestyle choice, with potential long-term consequences for the consumer economy.
Sixth Tone’s sister publication The Paper conducted a survey in April with the Shanghai University of Finance and Economics, which revealed that nearly 45% of respondents aged 21 to 30 said their income had fallen during the pandemic – more than any other age group.
At the same time, experts have reported that Chinese millennials are showing unprecedented interest in saving money.
Zhongyan Research Institute, for example, conducted a survey in March that found 57% of consumers born after 1990 and 63% of those born after 1995 said they intended to plan their spending more carefully in the future.
“Young people tend to consume impulsively, but after the epidemic … the proportion of prudent and rational consumption will increase,” Wang Feng, head of the Zhongyan Research Institute, told Sixth Tone.
This observation is supported by some of the interviews Sixth Tone conducted with young consumers. Miranda Chang, a 34-year-old financial worker from Xi’an, said: “I didn’t need to think about money when buying things before. [Now] I feel like I have to make a plan and pay special attention to my expenses.”
“Being quarantined for an entire month because of the epidemic made me realise that life without splurging is more fulfilling and fun,” she added. “I feel that it’s great to live with my feet on the ground.”
However, Wang Feng said she expected millennial spending habits to return to normal once the economy eventually recovers, although this could take some time in some sectors like luxury goods.
“Young people have the desire and need for social networking and entertainment, and after three to six months this kind of consumption will become normal again,” she said.
Sourced from Sixth Tone; additional content by WARC staff