One-third of all study abroad students in the United States hail from China. Pre-Covid, China was the largest outbound travel spender in the world - and the 40-and-under population hold two-thirds of the country’s passports. Not only that, according to both McKinsey and Bain, China will account for roughly half of all global luxury spending by 2025. Seventy-nine percent of the spending on luxury goods and services in China is done by people under 40. The result is a divide in generational spending power that is pretty astounding. In a way, China’s economic history can be summed up by this generational evolution: The older generation ate bitter yesterday so that today the younger generation can eat hot pot.
#MILLENNIAL MONEY MOVES HOW TO#
China’s older generations have had to learn how to be consumers, whereas its younger generations just get it.Ĭhina’s older generation was defined by their ability to “eat bitter”-that is, to do hard things for long times with deeply delayed gratification. This is in stark contrast to their parents and grandparents, most of whom grew up poor in a very different political climate, and as a result developed a famously thrifty approach to life-one akin to the approach many Americans developed during the Great Depression. Born into China’s modern economic era, they don’t know anything else. China’s young generations are the first for whom consumerism comes naturally. Chinese youth - by which I mean people under the age of 40, loosely the equivalents of our Millennials and Gen Z-outnumber American youth five to one.
In China, by contrast, young people both make trends and move markets.
Millennials and Gen Z may drive trends and make headlines in the United States, but Boomers are still the core consumers. We forget this in part because young people make headlines and look good in ad campaigns. In most Western economies, wealth is still focused in the Boomer + age brackets, as this graph makes alarmingly clear.
Not all global youth cohorts have as much economic clout in their own national consumer ecosystem as their peers in other countries. How much market impact does a youth cohort have in its country?ĭifferent countries have different generational pecking orders. The framework involves four “orbits of inquiry” - general organizing principles, that is, that leave space for drift between points. It has come in handy in particular for us at Young China Group as we help global brands and investors understand young consumers in China and the West, but it is open-ended enough to be applied more broadly. The question comes up so often that I’ve developed an open-ended framework to answer it - one that can help make sense of the swiftly shifting tectonic plates of global consumption. Whenever I give talks, whether it’s London or Cairo or Rio, people always ask the same question: “How do the younger generations in China stack up against our own?” I get questions like this because I’m the founder of a market-insights company called Young China Group. “Do Millennials in China also love avocado toast?”Ī global executive asked me this, in earnest, a month ago.
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