The one-child generation
Born between the ages of 19 and 35, Chinese millennials are part of the one-child generation. Being the only child, means that they were the center of attention in their families. Without other children, parents were more willing to make financial sacrifices to ensure a bright future for their kids.
- From the parents’ perspective, supporting their children’s education financially is an investment for the not just the child but the family.
- Investing in the child’s education has a potentially higher return than pure luxury purchases because it can be leveraged as a means of changing social status for a middle-class family.
Compared to Western counterparts, millennials in China don’t have as much financial burdens to bear, thanks to a more family oriented culture. Whereas in the West, millennials will face the repercussions of the global financial crisis, a mountain of student debt, tighter credit and rising income inequality.
Is financial freedom compensating for something?
Despite the financial freedom from constantly being the center of attention in their families, some of these millennials often find themselves lacking in a certain area; parental closeness.
- Approximately 100 million Chinese millennials are emotionally neglected by their parents. These parents worked in the cities and saw their children once or twice a year.
- As a result, some of these children became rebellious whereas others became fired up to create better lives.
“With my generation, as we are mostly the single child in the family, kids are used to a materially sufficient life, but the downside to that is you don’t really find a lot of peers to play with. That’s why my generation can be individualistic sometimes, and also, since you already grew up in a materially sufficient life, you tend to chase the adventure and thrill of life a bit more as well.”
In essence, for the Chinese millennials, physical luxury goods such as cars and handbags are popular choices when it comes to spending. However, there is also another more dynamic side of luxury spending; partaking in exclusive experiences that excite them and they can brag about.
Heavy consumption is driven by?
Rich millennials are not exclusive to China. There have always been youths with excess income to spend, but what separates Chinese millennials so drastically? After all, you’re probably less likely to hear “American Millennials reshaping luxury consumption” or “Australian youths reshaping global travel industry”versus an article on Chinese millennials. Let’s have a look at what really drives these Chinese youths and their nonchalant spending.
- For the most part, the parents of these rich youths fully pay for education. Despite many international Chinese students enjoying the freedom of not worrying about student loans, they are under enormous pressure to maintain good academic standing to meet their parent’s expectations.
- Furthermore, according to Forbes, 90% of Chinese families own their homes. Without the burden of student loans and mortgages, Chinese millennials have more disposable income to spend on luxury products. Their attitudes on luxury purchases are not the same as the status-seeking previous generation however.
Growing up under tremendous pressure to succeed and being the only child, Chinese millennials often relieve stress by buying high-priced goods, or seeking meaningful connections with the products or experiences they consume.
That’s also why over-the-top brand experiences are considered “luxury.” Furthermore, their preference for unique purchases is an expression of their individuality; an extension of their experience of being the center of attention in the family and means to stand out among their peers.
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