Despite China’s discouraging economic climate, characterized by soaring youth unemployment rates and sluggish growth, the country’s Generation Z (Gen Z) population continues to prioritize experiences, leisure activities, and travel. In a survey conducted by Mintel Group Ltd., it was found that consumers born after 1995 have consistently increased their spending on movie tickets, beauty services, bars, sporting events, and travel throughout the year. This trend reflects the Gen Z’s contemporary approach to redefining their lifestyles and seeking happiness amid challenging times.
Experience-led Spending as Gen Z’s Way Forward:
Blair Zhang, a senior research analyst at Mintel, notes that experience-led spending has evolved into the primary means for Gen Z to resume their lives post-Covid. Activities such as going to the cinema, visiting exhibitions, and outdoor exercise have become the norm for this generation. Rather than focusing on acquiring expensive gadgets or working towards long-term financial goals, such as saving or buying a home, Gen Z consumers are increasingly investing in affordable experiences that bring them joy and enrich their lives.
Adapting Priorities in a Challenging Job Market:
China’s youth significantly contribute to the country’s consumer market growth. However, amid a struggling post-Covid economy and reduced hiring opportunities, the unemployment rate for individuals aged 16 to 24 reached a record 22% in June. In response, Gen Z consumers are choosing to reevaluate their priorities. They are eschewing big-ticket purchases and situational goals, instead opting for access to affordable experiences that allow them to explore domestic travel destinations, attend comic conventions, and discover new restaurants with friends.
The Power of Happiness and Self-expression:
Savannah Li, a recent college graduate in search of a marketing assistant job, emphasizes the importance of treating oneself occasionally. Even during lockdowns, Li found solace in making secret chocolate purchases through a window, highlighting the significance of maintaining emotional well-being during challenging times. This desire to live happily in the present propels Gen Z consumers to spend on themselves, even without secure employment.
The “Lying Flat” Movement and Changing Consumer Behavior:
Zak Dychtwald, founder of the Young China Group trend research company, notes that the “lying flat” movement has gained momentum among Chinese Gen Zs over the past 18 months. Faced with an ultra-competitive job market, many young individuals desire to escape the rat race. While traditional sectors still witness consumer spending, some retailers catering to youth demographics, such as Unilever Plc, Yum China Holdings Inc., and Chow Tai Fook Jewellery Group Ltd., have voiced concerns or implemented sales promotions due to uncertainties surrounding China’s recovery.
The Quest for Affordable Options:
While Gen Z consumers are still actively spending, they have become more cautious during economic downturns. As Christine Peng, head of Greater China consumer research at UBS Group AG, notes, young consumers now seek more realistic and cost-effective options. This change in behavior is reflected in shopping preferences and highlights the need for retailers to adapt, offering value-based products and services.
China’s Gen Z population faces unique challenges in navigating the country’s struggling job market. Nevertheless, they have embraced experience-led spending as a means to find happiness and fulfillment. By redefining their priorities and allocating resources towards affordable leisure activities and domestic travel, Gen Z remains resilient in the face of economic uncertainties. As marketers and businesses adapt to this changing landscape, offering value-driven options and promoting self-expression, they can successfully engage with this influential consumer group.
Market Capital Research 