of the country’s total annual consumption in the next five years will be from citizens born
between 1985 and 1995
research at Credit Suisse.
Credit Suisse estimated that over 60 percent of those from the younger generation in China spend a minimum of three hours surfing the Internet on their mobile devices. These people have an average of 50 applications on their devices, with online shopping apps showing the highest adoption rates.
While apparel, accessories, digital goods and groceries remain the most popular items bought online by consumers from the younger generation, entertainment products such as film and performance tickets, as well as traveling products including hotel bookings and flight tickets, are quickly catching up.
Yin noted that a majority of the conventional consumer product companies he and his team have been tracking reported an annual growth rate of around 4 percent in 2014, about 3 percent lower than China’s GDP growth. However, this does not necessarily mean that people have been cutting back on spending. Rather, Yin notes that companies in the e-commerce and online-tooffl (O2O) sectors have seen explosive growth in China.
Among all e-commerce segments, Credit Suisse forecasts that O2O food delivery services will grow the fastest, with a compound annual growth rate of 63.7 percent.
The 2014 market size of 9.51 billion yuan ($1.49 billion) is expected to grow exponentially to 41.75 billion yuan in 2017.
According to the report, forces driving the robust growth of food delivery services include the declining willingness to cook at home, restaurant chains wanting to maximize output from their kitchens to mitigate escalating real estate prices, and favorable support from investors.