400 million middle-income groups form the backbone of consumption and the rise of the post-90s advanced consumption generation

category:Finance
 400 million middle-income groups form the backbone of consumption and the rise of the post-90s advanced consumption generation


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Qixi Festival, a carnival of consumerism has just come to an end. Luxury brands contract advertisements for circles of friends, telling people to express love with jewelry and bags.

Buy it to express the prevalence of consumerism is a routine of brand and self-media, and also a profile of the growth of wealth and consumption upgrading in China. Especially the emergence of 400 million middle-income groups with purchasing power, not only luxury consumption, but also education, culture and sports consumption are growing in an all-round way.

In addition, the post-90s and post-95s generation, known as the most flower-able generation, have shown an explosive consumption potential and become the users for luxury brands.

According to the Central Banks Overall Operation of the Payment System in the First Quarter of 2019, by the end of the first quarter, the total outstanding credit of credit cards for half a year was 79.743 billion yuan, compared with 8.804 billion yuan in 2010. Over the past ten years, the total outstanding credit of six months overdue credit cards has increased by nearly ten times.

Consumption Upgrading and Anxiety of 400 million Middle-income Groups

After 85 years of working for an Internet company in Beijing, Sichuan girl Xiao Zhang (pseudonym) said she was heavily indebted and did not admit that she was middle class. A year ago, she bought a house in Beijing. The down payment was about 3 million yuan. In terms of material consumption, she no longer frequently changes her mobile phone, but also wears a shirt of more than 20 yuan each. But there is no lack of experiential consumption, such as outbound tourism and fitness consumption.

How hot are the words middle class in the past two years? Since the media is well versed in this way, any headline articles related to middle-class anxiety, life style and childcare are easy to become explosive money; consumer enterprises also shout the middle class wins the world and compete for the label of middle-class matching.

Avocado, overseas tourism, skiing, marathon... Lifestyle and consumption labels related to the middle class emerge in endlessly. Who is middle class? How many middle-class people are there in China? The vocabulary related to the middle class that can be found in official statistics is called middle-income group, whose consumption capacity is regarded as an important support for Chinas economic stability.

A recent report by BCG, a Boston consulting firm, shows that one third of global luxury sales come from Chinese consumers. On the eve of July Eve, international luxury brands have been bombarded intensively in the circle of friendsadvertisements, which shows the importance they attach to the Chinese market. Foreign brands with declining earnings data are also looking forward to the Chinese market as an important step in its turnaround. Rapidly growing Chinese middle class is seen by them as a savior to the companys business crisis.

At the beginning of 2019, Ning Jitao, director of the National Bureau of Statistics, said that China has the largest and most growing middle-income group in the world. The National Bureau of Statistics has made internal estimates, and this group has exceeded 400 million people in 2017. For the middle-income group, the annual income of a typical family of three in China is between 100,000 yuan and 500,000 yuan. There are 400 million people and 140 million families in China. They have the ability to buy cars, buy houses and travel in leisure.

Judy, an associate researcher at the Institute of Sociology of the Chinese Academy of Social Sciences, thinks that the middle-income group in official statistics is an economic concept, mainly based on income, while the middle-income group is a concept in sociology, with the indicators referring to occupation, income and education level.

Although many middle-class claiming to be middle-class under the pressure of housing loans are full of anxiety and insecurity, the standards of middle-class and middle-income groups are still vague in China. The standards will change dynamically in different cities and time points, but it is certain that the overall purchasing power and consumption level of pan-middle-class groups are not high. No doubt.

Huang Zhen, a professor at the Central University of Finance and Economics, also believes that the overall consumption capacity of middle-class people is improving. In terms of consumption patterns, they are shifting from quantitative consumption to quality consumption in pursuit of higher level and quality consumption. From the perspective of income, the middle-income group in China is expanding, and the overall consumption capacity is also improving.

In 2008, Judy, who was also a doctor of Sociology in the United Kingdom, interviewed 30 middle-class people in Beijing and wrote a book on Chinese middle-class consumption patterns. Ten years later, she continues to follow and study new changes in middle-class consumption.

As for the insecurity of the middle class, she has analyzed the anxiety of the middle class in BRICS countries, which is prevalent in developing countries. Apart from the pressure of housing loans, the middle class also has multiple anxiety about health care, childrens education and old-age support. The failure of social security to keep pace with economic development is a problem faced by BRICS countries to varying degrees in their development. As a result, the middle class has a high life pressure and low risk resistance, which affects their life and future planning.

If the middle class is the backbone of Chinas consumer economy, the consumption momentum of the younger generation has brought a lot of new weather to the consumer market.

The Boston Consulting report also mentioned that luxury consumers under 30 contributed about 42% of their consumption, and those under 35 contributed as much as 78%. It seems that the luxury consumption market in China has shifted from the older generation to the consumers after 80 and 90.

Compared with the post-60s and Post-70s who have experienced the era of material scarcity, the post-90sgrowth catches up with the prosperity of Chinas market economy, with abundant consumer goods, rapid economic growth, a sense of security of ahead consumption and expectations for the future being more optimistic.

In addition, the lower and lower threshold for young people to borrow money also objectively facilitates advanced consumption. In 2017, many ministries and commissions jointly issued the Notice on Further Strengthening the Normative Management of Campus Loan, clearly banning the business of campus loan, and no network lending institutions are allowed to grant loans to college students.

With the banning of illegal campus loans, in addition to the credit card business of traditional banks, products launched by well-known Internet companies are popular on campus.

Xiao Li, a sophomore in a university in Wuhan, has provided loan services on several Internet platforms. The amount given to her by each platform is not too high, less than 800, more than 2000, but these add up to more than 6,000.

Ten years ago, when I went to apply for a credit card, I was rejected. A university professor couldnt apply for a credit card. Huang recalled that in addition to the low threshold of Internet platform lending, the number of bank credit card issuance has expanded rapidly, and the threshold of issuance has been decreasing.

In addition to the controversy over young peoples ahead consumption, capital also sees business opportunities and vitality from young people, as well as young peoples optimistic expectations for the future. Compared with what Japanese scholars call Japanese young people entering the era of low desire, the employment environment of Japanese young people has entered the glacial period in recent years, and their expectations for the economic future are rather pessimistic. But Judy also said that the other side of low desire can also be seen that the consumption stage of Japanese young people is a step forward than that of China. They are more disconnected from physical consumption and may pay more attention to experience and spiritual pursuit.

In Huang Zhens view, whether consumption is ahead of schedule may be related to macroeconomic development. In the past few years, the economic situation has been better, and Chinese people are willing to consume ahead of time. What is the future consumption trend, we need to look at it concretely in the light of the future economic situation.

Whether it is middle-class or college studentsborrowing consumption, whether it belongs to advanced consumption or not. Song Tsinghua, a professor at the School of Finance, Central South University of Finance, Economics and Law, believes that credit consumption (or borrowing and credit consumption) is inevitable and necessary under the conditions of market economy as a whole, because market economy is credit economy. With the development of financial system, borrowing consumption will increase. Credit consumption is ahead of time consumption or ahead of time consumption. The trend of ahead consumption or ahead of time consumption in China is generally normal. Not all credit consumption belongs to excessive consumption. Only credit consumption that exceeds its ability to repay its debts is excessive consumption.

Conspicuous consumption and grass planting consumption

In the ten years from 2008 to 2018, the growth rate of deposits of urban and rural residents dropped from 18% to 7%. The per capita disposable income of residents continued to rise, which is also a decade of rapid growth of house prices. Chinese consumption and housing investment are growing rapidly. Although the growth rate of consumption in first-tier cities has slowed down, it is led by the total amount and consumption trend. Line cities are still consumer centers, and the second-and third-tier western cities, which are increasingly favored by brands, are also exploding new incremental potential.

With the penetration of social media into peoples lives, grass consumption is prevalent, and the voice of social media to show off wealth is endless. The small red book, which locates the platform of young peoples lifestyle, is popular to show off their wealth. Some media joke that the bloggers on it are Marashatti per capita, white and rich.

Relative to the middle-class consumption survey conducted by Judy ten years ago, the biggest change in the past decade is the rapid development of online consumption. Many goods and services are online, including consumer loans.

Judy believes that the trend of conspicuous consumption in the middle class has not changed, while the self-directed consumption pursuing pleasure and comfort is on the rise, which has become more and more evident in this decade. Typically, brands such as Uniqlo sell well, and there is no longer an urgent need for big brands to prove themselves. But it is not excluded that conspicuous consumption still exists in different groups, and that social media flaunting wealth does not exist only in China.

Huang Zhen believes that self-Media stimulates conspicuous consumption to a certain extent, but he is sure that it only exists in part of the population, which is a local phenomenon. To some extent, conspicuous consumption is also the result of commercial advertising (using social media) planning, creating a you do not buy you are out of date social psychology.

Huang Zhen mentioned that the social psychology of not buying is out of date, which has been played by businessmen. The post-80s and post-90s are the obvious grass generation. The word-of-mouth communication of online consumption has been deeply rooted in peoples hearts through fashion bloggerspublic numbers and live broadcasts. In the live broadcast of Li Jiaqis buy it and Oh, mygod magic phrase, a batch of lipsticks and essences were snapped up.

For example, the Burberrys Tanabata advertising film love me has the final say this year, the meaning of its communication copy, probably interpreted whether love or love oneself, Burberry is proof of love gift, single hit and non single people.

Others argue that social media only magnifies the ostentatious consumption of the Chinese, and that the consumption of luxury goods by the middle and wealthy classes is becoming more and more obvious. For example, the Chinese are less enthusiastic about bags and clothing for big logos, and some luxury brands are also de-logo.

Wu Zhiyan, a marketing teacher at the School of Business Administration, Shanghai University of Foreign Economics and Business, wrote in her book Luxury Consumption in China: The Rise of Non-conspicuous Consumption. She found that her colleagues in Max Maras coat did not realize that they were wearing big brands because of fabric and comfort; when she carried a brand logo When the obvious bag was put on the platform and asked, she felt embarrassed. In the book, she mentions that the trend of luxury consumption focusing on aesthetics and functionality is becoming more and more obvious.

It is difficult to summarize whether the middle class or young people in China are consuming ahead of time or showing off their wealth nationwide. Scholars usually analyze a certain city or group. For example, Shanghai and Beijing are both first-tier cities. There are differences in consumption patterns in cultural performances. Shanghai people have a higher acceptance of new fashionable performances and plays. Deep performances with cultural attributes are more popular in Beijing. There are differences between the two cities in terms of supply and demand. Sex.

Its hard to find a deep study of consumption in the age of social media and the consumption of young people in the grass-growing generation. Whats worth noting is that online makes Chinese people more fond of showing off their wealth? Or does social media magnify flamboyance?

Huang suggested that for young people, in the current financial environment, they will inevitably be coerced, but still suggested that young people should consume according to their own financial resources, rational consumption, consumption only when needed, not conspicuous consumption. More attention should be paid to risk management and the ability to control the risk of borrowing and lending.

Source: Responsible Editor of 21st Century Economic Report: Han Yukun_NBJ11142