By Lin Bai | Tuesday, June 30, 2009
As one of China’s post-80s generation (aka Generation Y), I still remember my glory days in high school. A pair of Nike Michael Jordan sneakers, a Motorola pager, or a Giant-brand mountain bike – and you were the most popular kid in your class.
For reference, in Mainland China, the post-80s generation refers to those born after 1980 and before 1990. And according to China’s census yearbooks, 200 million babies were born during this time period, 90 million of them in urban areas. How many is that? 90 million is more than the population of the top 3 states in the United States: California, Texas, and New York. I don’t know about you – but, that’s a lot for one generation.
They have been labeled as “spoiled, egotistical, self-centered, and rebellious”. While I may not fully agree with those kind words (my mother thinks otherwise), my personal thought is, in reality, my generation happened to be born into the most technological, most highly advanced networked age to date. With that, we are more concerned about social responsibility and smart investing than any of our predecessors.
In 2009, the youngest are 19 years of age - and this generation is playing an increasingly important role in China’s consumer market, gradually becoming one of the most lucrative segments ever coveted by marketers, the so-called China “gold mine”.
Why is this generation the “Gold Mine”?
Reason 1– An International Generation
We are the first born after China’s economic reforms growing up in a better environment than our parents could ever dream. We have more disposable income and a greater appetite for consumption, partly driven by international ties. This generation is addicted to the Internet and video games. We seldom read newspapers but many of us are quite knowledgeable about the latest Hollywood trends and fashion trends. We constitute the majority of online shoppers. We live in a world of KFC (considered a chic Western fast food in China), mp3s, QQ, Mobile phones, streamlined TV dramas and Hollywood movies. We dye our hair blue and wear distressed designer jeans with holes. And unlike our parents’ generation, we are more receptive to new things, follow latest fashion and trends, and are quickly becoming the face of China.
Reason 2 – The Little Emperors and Little Princesses
As a result of China’s one–child policy, this generation is cursed with the “me” factor. With no siblings to compete with, we are considered the “little emperors and the little princesses” of the family, doted on by our parents and possibly four grandparents.
And unlike kids in the US or in the other countries, this “gold mine” generation is financially fully supported by parents well into their twenties or, at the very least, until they graduate from college (many of them still rely on their parents even after they get a job). To throw in a little fact - according to China Research Center on Aging, a surprising 30% of working age employees in China are supported by their parents.
This generation represents the “hope” of the family. Just like most parents all over the world, Chinese parents save the best for their kids and might even spend their entire life’s savings on their children’s education, wedding, or a purchase of a new apartment (or if not, at least the down payment).
The short saying, “son drives Porsche and dad drives Honda” is really not all that uncommon in China. We have an incredible influence over our parents’ spending, especially for big-ticket items.
Reason 3 – A Different Consumer Attitude
The post-80s generation has a markedly different behavior in consuming than their parents.
First, unlike their predecessors who lived frugally and save as much as they can, this generation believes that money is something to be made and not saved. We are confident that we can (and will) definitely make big “bucks” in the future - especially after an intensive education starting at primary school, there is an expectation for a higher standard of living after college graduation.
If this “expected” mentality isn’t enough, we also believe if we cannot afford a high-rise apartment or a Mercedes Benz with our current salary, why not spend and pretend that we can. Thus, an introduction to the so-called “Moonlight Group” (people who live paycheck to paycheck, spending it all by month’s end). There is a saying in China that they are "spending tomorrow's money on today's dreams".
Second, it is not only a mode of thinking, but is also how we are spending which is a big differentiation in attitude. Unlike our parents, who spend money for necessities such as basic appliances and groceries, this generation likes to live big… and luxuriously. We spend on leisure, entertainment and luxury consumer goods. Our rule for buying is not based on how well it is made, but whether we “like” it (or not). We focus less on a product’s usefulness than on its appeal. Purchases are heavily based on appearance, popularity, and, what I like to refer to as, the “flash” factor (how much attention they would get from the others if they own it).
Xing Yuan, a noted Sociology Professor at Shanxi University, states that:
“This generation has no idea of thrift because as they grew up, they live in an environment with a rich supply of commodities”.
Reason 4 –The Future Middle Class
In the next few years, the post-80s generation will constitute (as some of them already do) most of China’s entire middle-class. Compared with previous generations, the past-80s generation “as a whole has the advantage of daring to overthrow traditions and challenge old ways of doing things”. We have strong motivation and drive for making money and society has given us plenty of opportunities. Not only are we better educated and start earlier at making substantial money than previous generations, we are doing this across all industries including sports, entertainment, IT and business. Piano prodigy Lang Lang, world champion hurdler Liu Xiang, NBA basketball players Yao Ming and Yi Jianlian are some of this generation’s celebrities – who are also representatives of this new generation of China’s “gold mine”. In fact, in Forbes’ 2009 annual “Top 10 Chinese celebrities list”, 50% of those listed belong to the post-80s generation.
How have companies today been targeting this “Gold Mine”?
Coca-Cola has always understood how to target this particular generation. Whether it is sponsoring live events around college basketball games or cross-promoting “World of Warcraft” (the no.1 online video game in China) to promote Coke products, Coke is fully aware of just how pivotal this new generation is and will become. The taste of Coke stays the same, but the experience Coke brings to young folks is always new– this change is exactly what we’re seeking.
Gucci and Louis Vuitton understand that their staple audience in mainland China will actually be 22 to 32 year olds. So, in response, they've promoted 500 yuan ($73) to 1,000 yuan ($146) bags for that segment.
Globally, the Swiss brand Swatch has positioned themselves as a must-have for people from 8 to 80 years old. In order to target post-80s generation in China, Swatch realigned their marketing strategy: they selected a Chinese pop icon singer Liyuchun (born 1984) to be the brand spokesperson.
A national example, China Merchants Bank has launched the "Hello Kitty card" and "MSN card" to attract the post-80s generation.
Conclusion: the Gold Mine is the next frontier of advertising
This generation’s product consumption was a key factor in China's retail growth in 2008 - representing 20% of all spending (China Market Research Group).
And if everything said and done in China is still not an indicator of this future - according to China’s National Bureau of Statistics, the number of Chinese younger than 30 will surge by 61 percent to 500 million people by 2015. That’s more than the current population of the United States. Enough said.
As part of this lucrative member of this post-80s generation, I’m actually quite excited what the future holds in China. I can proudly boast that I’m making history and changing China as an economic force. Whether it’s for the better (or for the worse), I’m a proud part of that change. So, the next time you decide you want to tap into the largest group of consumers in the world – think of this “spoiled, egotistical, self-centered, and rebellious” crowd. Think China and join the gold rush!
