Whether you like it or not, the post-00s have entered the scene, while the post-90s and post-80s are heading into their thirties and forties. As people lament their youth, they gradually realize that the Millennials have matured, becoming the main consumer force and the 'cash cows' for businesses. A series of consumption trends centered around Millennials are undergoing new changes.

The Formation of Millennial Consumption Habits

The so-called 'Millennials' typically refer to those born between 1982 and 2000. In China, due to the specific historical background and social environment during their birth and growth, they have gradually formed distinctive consumption concepts.

First, Millennials grew up during a period of rapid economic development in China. Since the reform and opening-up, China's economy has embarked on a path of long-term high-speed growth. In constant prices, China's GDP in 2017 was nearly 150 times that of 1982 (the starting year for Millennials) (see Figure 1). Meanwhile, China's urbanization rate has accelerated since the 1980s (see Figure 2). As a result, unlike the previous generation, Millennials have fully enjoyed the dividends of economic growth, rarely experiencing severe material shortages during their upbringing, thus they have a stronger subjective demand for consumption upgrades.

Second, Millennials received more attention during their birth and growth. In 1982, 'family planning' was written into the report of the 12th National Congress and implemented in the Constitution. Millennials were born under this background, mostly as only children, with family structures typically in the '4+2+1' form. As the '1', they grew up under the high attention of six elders, which indirectly shaped their more personalized consumption habits compared to the previous generation.

Third, Millennials are digital natives. Since the 1990s, with the popularization of personal computers, the internet began to sweep the globe, and its rise accompanied the growth of Millennials. By the end of 2016, China's internet penetration rate exceeded 50%, with mobile internet users accounting for over 90%. According to a survey by Beijing Oulixin, among Millennials, the penetration rates of mobile phones and the internet are as high as 85% and 93%, respectively. Influenced by the rapidly innovating internet, Millennials possess consumption traits such as emphasizing individuality, being willing to try new things, and having strong brand awareness.

In fact, the various consumption preferences of Millennials are subtly influencing the preferences and demands of the entire consumer group. Statistics from the well-known American research institution ComScore show that the main consumer group aged 25-34 in mainland China has long exceeded 30% of the total population, far above the world and Asia-Pacific averages. They place more emphasis on quality and service, pursuing personalized, fresh, exciting, diverse, high-quality, and experiential consumption, thereby leading a wave of personalized and diversified consumption demand.

Consumer Profile of Millennials

So, how big is the consumption potential of Millennials?

According to a Goldman Sachs research report, China's post-80s and post-90s groups number about 415 million, accounting for 31% of the total population. As their average annual income grows from $5,900 in 2014 to $13,000 in 2024, they will dominate the consumption landscape for the next decade.

The '2017 Young People's Consumption Trends Data Report' jointly released by China Everbright Bank, Suning.com, and other major brands shows that by the end of 2016, the average monthly income of young people nationwide was 6,726 yuan, with average monthly expenditure of 4,386 yuan, a ratio of about 3:2, indicating the strong consumption capacity of Millennials.

Thus, understanding the consumption characteristics of Millennials has become a top priority for business research.

According to a CITIC Securities research report, Millennials have relatively distinct consumption characteristics in various fields such as clothing, food, housing, transportation, travel, shopping, and entertainment, as follows:

(1) Clothing: Personalization + Internetization.

Millennials want to be different and pursue brand personality, but due to temporarily limited economic capacity, they are more willing to compare prices online and offline through multiple consumption channels to buy the clothes they want with the least money. This leads to the phenomenon of Millennials being keen on online shopping.

(2) Food: Emphasis on experience, preference for mid-to-low-end consumption.

Millennials are less influenced by advertising, have their own unique preferences for taste, environment, service, etc., and are willing to spread word-of-mouth and share their experiences. In addition, due to limited financial strength, they do not frequently visit high-end restaurants; instead, mid-to-low-end restaurants with distinctive features and selling points are more attractive to them.

(3) Housing: Focus on housing quality over price.

According to a survey by 58.com's Real Estate Research Center, whether in first-tier cities like Beijing, Shanghai, and Guangzhou or other cities, young Millennial graduates are most concerned about a comfortable living environment, with rent, transportation, and roommates ranking after comfort, which also means they have to bear higher rental costs.

(4) Transportation: Car purchase balances appearance and quality, with strong brand awareness.

When Millennials buy cars, they value both appearance and quality. Taking the post-90s as an example, according to NetEase Auto's 'Post-90s Young Consumer Car Purchase Trends Report', 49% of post-90s car buyers pursue appearance and style, while 48% pursue quality and reliability. Additionally, German car brands are most favored, followed by Japanese and American brands.

(5) Travel: Yearning for freedom, love of travel.

Millennials love to travel, especially the post-90s group. According to Ctrip statistics, post-90s travel an average of 4.2 times a year, with domestic travel accounting for 79.3% and outbound travel 20.7%, consistent with their personality of liking new things and being willing to try.

(6) Shopping: Keen on online shopping, rational consumption.

Millennials have a natural close connection with the internet, making them the backbone of online shopping. Moreover, they are willing to spend on things that truly attract them, but this does not affect rational choices; they rarely waste money on unnecessary things.

(7) Entertainment: Strong entertainment ability, open to new forms of entertainment.

Millennials grew up in an environment with relatively abundant material life, and their pursuit of life's entertainment is greater than other age groups. Their entertainment interests cover entertainment circles, sports, games, and many other areas, with a wide distribution. At the same time, fresh, fun, and creative things can easily capture their hearts, making them more likely to pay for them.

Three Major New Consumption Trends of Millennials

Now, with the explosive development of internet technology and the continuous emergence of new business formats, the consumption habits of Millennials are quietly showing new trends, mainly involving the following three aspects:

First, the rising niche consumption. Niche consumption refers to people with common interests, values, and life sentiments from different dimensions gathering together to form a consumer group centered on communities. It can be said that the rise of internet social tools has brought these 'like-minded' friends together. They are all carriers of more diversified and personalized consumption preferences, thus creating the prosperity of various enthusiast forums and small communities.

Second, the thriving 'lazy consumption'. Relatively affluent material conditions, convenient and efficient internet environment, and the pursuit of simplicity and speed have gradually given Millennials the trait of being 'homebodies'. Taking the post-90s as an example, according to a CITIC Securities survey, the top leisure and entertainment activity for post-90s is 'staying home and surfing the internet', with staying at home listening to music, watching videos, and sleeping being their preferred way to spend holidays. As a result, the 'lazy economy' has emerged, aiming to cater to consumers' 'lazy to the end' needs and provide related supporting services. This also explains the great popularity of services in catering, housekeeping, express delivery, and other fields.

Third, a clear tendency towards overconsumption. Data from the '2017 Young People's Consumption Trends Data Report' shows that over 76% of young people with monthly income above 4,000 yuan have credit cards, and advanced credit consumption has been accepted by most middle and high-income young people. Various internet financial products are also sought after by Millennials due to their low threshold and high efficiency. Although they have a stronger willingness to consume in advance, Millennials are not just willfully buying; on the contrary, with P2P, funds, crowdfunding, and other wealth management products prevalent today, their financial awareness is equally strong.

The future belongs to the young, and so does the consumer market. Facing this blue ocean of Millennial consumption, have you entered the game?

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