The rise and rise of China’s modern-day yuppies, and what it means for consumption
Young, free-spending singles are predicted to become a lot more influential on the Chinese economy in coming years, and grow in numbers
Eligible, affluent young Chinese singletons have become arguably the country’s most-powerful demographic, now accounting for about 15 per cent of the total population, according to analysts.
And these big-spenders are predicted to become a lot more influential on the economy in coming years, even changing overall consumption patterns.
“Very different from the past, there is an ever-growing number of young urban professionals now in China choosing to delay, or even give up on the idea of marriage altogether, and develop their own happy lifestyles instead,” said Xiao Chan, an analyst for Orient Securities.
“We are already into what we see as the fourth ‘wave’ of singles’ characteristics, and they are leading a significantly different life, in terms of consumer values than their predecessors, with individual convenience, health, leisure, and entertainment now holding the keys to happiness.”
Citic Securities has also picked up on the phenomenon, equating the growing influence of the group to the cash-rich “yuppies” of the 1980s – a term used in the West, short for “young urban professional” or “young upwardly-mobile professional”, who dominated much of the spending of that era in cities such as London, Paris and New York, enjoying the lifestyles afforded by high-paying jobs and a lack of familial responsibility.
China’s “unwed” population (those who traditionally would have been married in previous generations) reached 200 million by the end of 2015, Citic says, citing data from the Ministry of Affairs.
“The majority of this group, mostly young qualified professionals living in bigger cities, have strong purchasing power,” said Citic analysts Guo Yi and Dai Jiaxian, in a recent note.
The nation’s average monthly disposable income – loosely defined as the amount of cash that households have available to spend or save after income taxes has been paid – in China was around 2,395 yuan (US$348) during the first quarter this year, according to the latest official data from the National Bureau of Statistics.
But according to other figures released by e-commerce giant Alibaba, to accompany the company’s massive shopping gala Singles’ Day on November 11 last year, more than half of the country’s single men and women have average monthly disposable income of between 3,000 and 5,000 yuan.
And nearly 30 per cent reported having around 5,000 to 8,000 yuan at their disposal every month, with 10 per cent having some 8,000 yuan or more.
Singles’ Day was first commercialised by Alibaba in 2009, “for single people to celebrate and buy presents for themselves”, but it has since become the world’s largest annual online shopping event, with sales eclipsing the combined total of online revenues generated during the equivalent “Black Friday” and “Cyber Monday” shopping days in the US.
Last year, Alibaba – which owns South China Morning Post – claimed total transactions on its Tmall site reached 121 billion yuan on that single day in November.
“Affluent Chinese singles have become the main target of retailers and service providers in what has now become a ‘consumer upgrade’. They are the new bellwether of consumption trends,” said Guo and Dai.
The upgrade refers to consumers raising the standards of their lifestyles mainly through spending on fashion, fine dining, household goods, and travel.
The first characteristics of singles were simply measured on the fact they were spending more on “leisure seeking”– but that’s grown into a multi-faceted range of pleasure purshasing.
“The average ‘unwed’ tends to enjoy more flexibility in how they spend their time and have a higher demand for entertainment, than those that are married,” the Citic analysts said.
“They usually spend more time and money on games, for instance, online TV streaming and movies, and are inclined to spend more on ‘value-added services’.
The second big boost to the number of singles was their development into “social-networking animals”, they added.
“To make themselves more attractive, more single men joined gyms, took nutritional supplements to build up muscles and look lean, while single women liked to share cooking experiences on social networking sites, to convey the message of ‘the virtuous wife’,” they said.
The third characteristic of singles then developed: the “novelty seekers”.
“Advertisements for products during that stage became thinly veiled in sexual implication and innuendo, to appeal to this growing group of single consumers.”
And now, we are firmly seeing the latest new characteristic, those who seek out “personalised products”, which can make them stand out from the crowd.
Today’s affluent young Chinese single is an dedicated advocate of innovation, and loves nothing more than displaying individuality.
Topping their bucket lists are top-of-the-range, fast-moving consumer goods, often customised in a wide range of choices, to show off personal flair. And retailers have been quick to latch onto the group.
A nice example is “Taohuazui”, which literally translates into “peach blossom tipsy” – a liquor developed by the Shenzhen-listed drinks maker Luzhou Lao Jiao, which was widely enjoyed by stars of the hit TV drama, To the Sky Kingdom.
Based on the profiles of this latest wave of Chinese yuppie singles, Citic analysts have identified four segments that are set to be benefit most: entertainment, recreation (such as paid online content providers), games, and social app developers.
Leisure foods, such as high-priced snacks and drinks suppliers, dairy product makers, or even quick delivery service providers, are also expected to expand fast, aimed squarely at this upwardly mobile new generation of big spenders.
As are “appearance-related” segments: for males, that means nutritional supplements, and for the fairer sex it might be expensive beauty products, and even plastic surgery.
Some of the slightly more offbeat product groups that are also being tipped to cash in on the free-spending youngsters are stewed duck neck producer Zhou Heiya (a traditional favourite, now turned expensive luxury item), infant formula maker Biostime, Angel Yeast, the selfie improvement app Meitu, and mobile games developer Sanqi Interactive Entertainment Network Technology.
Liu Yan, an analyst with Southwest Securities, also highlights another burgeoning market likely to profit from the thickening young wallets – the online “personal ads” industry.
“There are 200 million single adults in China, with men greatly outnumbering women. So it’s becoming more difficult for men to find a girlfriend, or a wife, ” Liu said.
“Women have also become more educated and better paid compared with the past and more self-confident to go out and find a new partner, after a divorce or split-up.”
“Demand is huge in the online dating and marriage market.”
By far the most popular dating site, with just over a quarter of the market, is Jiayuan.com, founded in 2003.
Its latest figures show net revenues increased 16 per cent to 714 million yuan, thanks largely to a jump in income from its most expensive offering, the “one-to-one matchmaking service” which promises to find you the perfect other half – for a premium price, of course.