China’s Generation Z, defined as those born after 1995, are increasingly turning to leisure shopping as a means to cope with high youth unemployment and a struggling economy. Despite the bleak economic situation, these young consumers are spending more on experiences such as movie tickets, beauty services, and visits to bars and sporting events. According to a survey conducted by Mintel Group Ltd, 40% of respondents reported increasing their spending on leisure in August compared to the previous month.
Mintel senior research analyst Blair Zhang suggests that experience-led spending has become the new norm for Gen Z as they try to resume their lives post-pandemic. Instead of cutting back on spending, young consumers are reevaluating their priorities and choosing to indulge in affordable experiences rather than saving for big-ticket items or the long term. While international travel may be out of reach for many, domestic tourism and the Chinese box office are thriving.
The shift in consumer behavior can be largely attributed to the high youth unemployment rate in China. In June, the jobless rate for individuals aged 16 to 24 hit a record 22%, and there are concerns that the actual number might be even higher. With limited full-time job opportunities, many young people are settling for part-time or low-paying positions. As a result, they are redirecting their money towards local tourism spots, comic conventions, and new restaurants rather than dwelling on the challenging job market.
For recent college graduates like Yang Zhifeng, the job market’s competitiveness has become disheartening. Instead of fixating on the lack of opportunities, Yang chooses to spend her money on activities and experiences that bring her joy, such as visiting local attractions and trying new eateries. Savannah Li, another job hunter and college graduate, shares a similar perspective, believing that occasional self-indulgence is crucial. Even without a steady income, Li doesn’t hesitate to spend money on things that make her happy, such as buying a dress. This mindset aligns with the emerging trend of “lying flat,” where Chinese Gen Zs are opting out of the cutthroat job market to prioritize their overall well-being.
Despite the economic challenges, there are still young consumers in China who are willing to spend. However, they are now more cautious and practical, seeking out more affordable options. Retailers with a large youth customer base are relying on discounts and promotions to support sales. Chinese budget retailer Miniso Group Holding Ltd. has experienced substantial sales growth, with one-third of its China stores achieving record sales in July. Luxury brand Coach has launched campaigns to encourage self-expression among younger shoppers, aiming to foster self-confidence and resilience.
While marketing efforts do play a role in influencing consumer behavior, it is essential to acknowledge the impact of an unstable job market on the spending power of young Chinese consumers. The uncertain economic conditions have forced some to lower their expectations and tighten their belts in terms of expenses. As these young individuals navigate the challenges posed by the economy, leisure shopping acts as a temporary escape and a way for them to prioritize their emotional well-being.
Useful links:
– China Gen Z Women Drive Miniso to Monthly Sales Records
– How Affordable Luxury Brands Are Filling in Consumers’ Black Friday Gap
