In China, the youngest members of families wield outsized wealth compared to the same cohort in other countries, a recent OC&C Strategy Consultants report.
Referred to as the twenties and thirties, this generation has quite different spending and saving habits from their parents, responsible for much of the Chinese millennial and Gen-Z luxury spending.
One of the reasons, according to Jing Daily, is a 4-2-1 paradigm. Four grandparents, two parents, and one child to whom attention and money has passed without the need to share with a sibling. As the Chinese middle class has grown, these “little emperors and empresses” often live at home, unburdened by the student debt that saddles many of their contemporaries in the West.
Of course, that privilege won’t last for long. As Chinese society ages, these children will be left with a larger burden of older relatives, as the pyramid gradually inverts to a 1-2-4, and an only child has a hard future ahead.
Other problems afflict the society, leading to the government’s announcement that it was going to end the policy in 2015. With a preference toward male children, the gender balance has skewed towards males. It also contributed to an acceleration in the average age of the population. Both effects are being felt now.
According to Mei Fong, an author of a book on the one child policy, loneliness has become a strong driver of consumer spend. Witness, for instance the growth of livestreaming in the country.
On a slightly more positive note, increased spending power coupled with educations that allow greater access to white collar jobs means that the luxury sector is growing despite broader fears in the economy. Spending has defied the broader economic slowdown, because of these consumers, the Financial Times found.
Sourced from OC&C Strategy Consultants, Jing Daily, Financial Times