The largest consumer nation in the world, the U.S., was heavily influenced by the consumption habits of those born in the 50s and 60s – baby boomers. Similarly in China, strong consumption growth is now coming from dynamic spending habits of the post-90s generation (“九零后”). Like the baby boomer generation in the U.S., the post-90s generation is experiencing rising disposable incomes, increasing living standards, and possesses a positive future outlook.
Historically, socio-economic and political uncertainties fueled China’s extraordinary savings rate of more than fifty-percent. Today, these uncertainties are less of a concern and habits are rebalancing how many look at consumption. The post-90s generation grew up with higher living standards and daily necessities being subsidized by parents and often grandparents, who all centered around supporting an only child. This generation then entered higher-paying careers and has started to manage their own personal finances. These consumers are extremely comfortable with e-commerce and foreign products, and possess a desire to purchase fashionable, premium and new products. As this generation enters parenthood, we anticipate these habits will continue to emphasize “the spend” rather than “savings”, helping drive sales of our baby and kidswear platform Little Star and our premium snack platform Castle Snacks.
The consumption patterns of China’s post-90s generation can be summarized into six themes: (i) entertainment and socializing with friends, (ii) products that tell a compelling story and evoke emotion, (iii) consumption influenced by “Otaku” from Japanese culture, or a preference for consuming in your own home environment, (iv) differentiated buying experiences, (v) excess consumption and a willingness to buy on credit, and (vi) purchasing through mobile platforms. According to research by Peking University and NetEase, the post-90s generation enjoys spending primarily on clothing, footwear and jewelry, and are willing to make unplanned purchases on travel and high-end jewelry and accessories. They are also more likely to have their consumption decisions influenced by business leaders, academics and celebrities.
The dynamics of consumer demographics in China play an important role as Lunar brands localize for tastes and preferences and nationalize distribution and marketing. Within the Lunar ecosystem, our brands are able to process and share our understanding of these market dynamics, which has heavily influenced the success we have had with Yeehoo’s e-commerce growth and the early success we have experienced with Yao Taitai’s online sales.