Single Economy
Young, unmarried Chinese spending more on convenience, pleasure
Two-slice packs of bread, one-person set meals, and mini-lipstick vending machines have been popping up in China’s convenience stores and shopping malls, all signs hinting at a larger trend: young single people are driving new consumption in the country and boosting economic growth.
Right before Valentine’s Day, Shanghaibased Sinolink Securities published a financial and consumption report about Chinese singles on February 12, pointing out the majority of young unmarried Chinese people tend to consume for convenience and pleasure, and there will be more young Chinese choosing to stay single in the future, echoing a trend seen in neighboring Japan.
“The generations since the 1990s have upgraded China’s consumption. They will play a key role in boosting China’s economic growth, shifting the country’ s export and investment oriented economic growth to a consumer driven economy ,” said Dong Dengxin, director of the Financial Securities Institute at Wuhan University of Science and Technology.
The declining marriage rate in China and society’s changing demographic structure have pushed the country to embrace the “single economy.” The trend of delaying or opting out of marriage reflects profound changes in the perceptions of young Chinese about marriage.
The report by Sinolink Securities also compared China with Japan, saying the latter also experienced a sharp rise in consumption power among single Japanese in the 1980s. Moreover, the report predicted more people will move to major cities in China amid negative population growth, and there will be more young people choosing to stay single due to economic and child care pressure.
Consumption for pleasure
A 29-year-old woman surnamed Li from Northwest China’s Shaanxi Province gave a big red envelope worth 10,000 yuan ($1,476) to her nieces during the recent Chinese New Year. She could afford to after saving a great deal of money in the past year.
“I couldn’t save up in the past, but now
I am single and I can save 3,000 yuan per month for self-improvement and to be filial to my parents,” Li told the Global Times on Sunday.
She used to spend a lot of money on buying clothes, makeup and hairstyling, leaving no money left at the end of the month.
Currently enjoying her single status, Li said her consumption is more rational and she spends more on her interests now. Li has even signed up for driving lessons in the new year.
However, not all singles consume as sensibly as Li. Her friend Anna Qian (pseudonym), also 29, belongs to the “moonlight clan” – a term that refers to Chinese youth who spend all of their monthly salary.
Qian also overdraws more than 10,000 yuan from her three credit cards every month. After buying luxury cosmetics, bags and clothes, she sometimes asks financial help from her parents and friends.
“Her ideas about consumption are very ego-centered, but she lives happily and freely,” Li said about her friend, who has neither a cent in savings nor any family burdens.
Zhao Ping, director of the department of international trade research at the China Council for the Promotion of International Trade, told the Global Times on Sunday that consumption for pleasure is typical of single people because their consumption is aimed at meeting their own individual needs rather than those of others.
“When one person is full, the whole family won’t be hungry,” Zhao said. “Singles are not like married people, who have to consider the needs of their family members. Most of their life choices are made with the priority of making themselves happy.”
This was echoed in the Sinolink Securities report, which surveyed approximately 2,000 respondents nationwide born between 1985 and 1995. The report noted four characteristics of this group’s consumer behavior: spending for convenience, pleasure, expectations and the future.
London-based market research company Mintel Group said in its China Consumer Trends 2018 report that 41 percent of teens in China said they would like to live in an unconventional way to express their own personalities and to be individuals. This has made personalized services and products attractive to millennials, bringing about new market trends such as customized trips and educational training.
New trends
According to Sinolink Securities, more than 220 million Chinese were unmarried as of 2017, accounting for 15 percent of the total population.
Another report on Chinese consumer trends in 2017 by a financial management app called Suishouji noted the national average salary of Chinese young people between 20 and 35 was 6,726 yuan per month, with average monthly spending of 4,386 yuan. In addition, the report said 53 percent of this group
of month. people In terms earned of how more these young Chinese than 8,500 yuan each people link Securities like to spend report their salaries, the Sinoaid said convenience is an important consideration, thanks to the rapid growth of China’s e-commerce industry.
“Online shopping’s advantages do not only lie in its free shopping behavior in terms of time and location, compared with offline shopping malls and supermarkets, but it also provides convenience with its home delivery service,” the Sinolink Securities report said.
The food delivery business is another industry boosted due to the desire for conveatistics nience. According to statistics from Meituan Dianping (a popular Chinese retail review
platform) released in 2018, single people aged between 20 and 30 contributed 65 percent of the total food delivery orders in 2017.
Single young people buy fewer cooking ingredients such as fresh vegetables and meat, compared to people with partners, because ready-to-eat foods are more attractive and efficient than cooking, which requires both time and energy, the Sinolink Securities added.
Analyst Zhao told the Global Times that single people have shown more willingness to eat in restaurants for the foreseeable future. “In Chinese culture, it is too troublesome for one person to spend a great deal of time on cooking but little time on eating. Few people enjoy eating alone. As a result, cooking by themselves is inferior to order a food-delivery service,” Zhao said, adding this will bring about new opportunities for the catering industry and convenience stores due to the increasing demand.
However, she said although single people are more willing to spend, which could stimulate economic growth, companies need to research the market and spending characteristics of single people in China so they can offer products and services tailored to young single people.
Dong also noted that consumption by millennials has broken old patterns and the limits of family fortunes. He gave the example of elderly Chinese who bring instant noodles with them while traveling abroad, explaining that even though Chinese seniors have higher standards of living now, their spending habits remain stuck in the past. “The future consumption of millennials, born for the era of mobile payment and intelligent internet, will tend to be smart. Industries such as fitness, entertainment and tourism will become more and more important in driving China’s economy, thanks to young single people,” Dong said.
He added that both China’s exports and investment are being transformed and upgraded, which may result in a weaker and slowing economic impetus. “Consumption is not seasonal. It can drive China’s economic transformation as well as its industrial upgrading, keeping its driving power persistent and strong,” Dong added.