The age of conspicuous consumption has arrived in China, with college students and recent grads playing an important role. They are part of the Enlightened Generation (born after 1981), which is characterized as being more urban, more educated, and will spend significantly more of their incomes consuming than their parents’ generation.
China now has a population of more than 1.3 billion people, dominated by three generations: The Lost Generation, the Boom Generation, and the Enlightened Generation. From a financial standpoint, the Lost Generation has little and spends little. The Boom Generation benefitted from the rapidly expanding economy in China, but tends to invest more to help their children. This comes in the form of a home to raise their family, funds to send their children to a university, and further saving to help their children get married and buy a home. The Enlightened Generation tends to spend on consumer goods and has little concern about saving for the future.
While more than 300 million people in China are considered middle class, college graduates are expected to maintain a disproportionate amount of consumer spending. The Boom Generation had less than 6% of its number with a university education. The Enlightened Generation is expected to have more than 30% with a college degree. By 2025, there will be nearly 200 million Chinese with university degrees, mostly working in professional careers. They will influence consumer markets not only in China, but throughout the world.
A recent survey of college students in China by DigitalMediaIX showed students heading to college with more than $1300 in technology products alone, which includes a laptop. smart phone, and often a tablet. More affluent students have the ability to spend much more, with the Apple “3-set” costing more than $2400. Sales of technology products to college students in China alone represented more than $10 billion in 2012.[1] On top of technology spending, students are also consuming fast food, soft drinks, snacks, candy and personal care and a variety of services, adding another $20 billion of consumption.
College students in China are digitally savvy. They shop on their computers, buy products with their smart phones, and connect with friends and peers to a greater degree than their U.S. counterparts. They are influenced by their peers and information they receive through social media and online.
The $30 billion market with college students today is just the start. Brands that can engage the Enlightened Generation will find them to have an influence on the overall market and offer significant opportunities for the future.
Photo Courtesy of China Daily
[1] Source: DigitalMediaIX, College Students in China, the Next Generation of Consumers, 2013
Photos Courtesy of UW-Madison Archives
