In 2023, a year marked by the prevalence of low prices: the '9.9 yuan' trend spread from coffee to milk tea, various discount stores became popular, Hema 'moved mountains', Meituan 'tug-of-war', and Pinduoduo's market value surpassed Alibaba's... 2023 was also a year of 'spending like water': major tourist cities were packed with people, concerts remained hot, and in the first half of the year alone, box office revenue for commercial performances nationwide increased by 673.5% year-on-year. Amid this seemingly contradictory contrast, we wonder: what changes have occurred in young people's consumption? Are they more conservative or more generous? What factors influence their spending? In early December, DT Business Observer released a '2023 Youth Consumption Survey' with 1,148 respondents. Nearly 70% were female, about 80% were born after 1990, 1995, or 2000, and 90% came from first-tier, new first-tier, and second-tier cities. Therefore, this survey reflects, to some extent, the consumption trends of young people in big cities, especially women.
Overall, they spent more than last year
Consumption structure changed
1. 30% saw income rise, nearly 60% spent more than last year
Overall, about 30% of people saw their annual income rise this year, but nearly 60% spent more than last year. Looking at different age groups, changes in spending are basically linked to changes in income. Younger groups earned more and spent more than last year: Over 85% of those born after 2000 and after 1995 said their income was 'about the same' or 'increased' compared to last year, and nearly 70% of each group said they spent more than last year. Among those born after 1980 and after 1985, fewer saw income increases, and nearly 40% in each group saw income decline. Correspondingly, a higher proportion of these groups chose 'spent less than last year' compared to other age groups. It's worth noting that these are relative changes for respondents themselves and do not imply that the absolute income or spending of those born after 2000 or 1995 is necessarily higher than those born after 1985 or 1980.
2. Spending on services increased, while beauty and fashion decreased
Where did people spend more? Specifically by category, apart from durable goods like cars, spending on home appliances, household items, and books/stationery changed little. Spending on FMCG products diverged: beauty and personal care, and clothing, shoes, and bags saw significant declines, while food and beverages, and sports/outdoor items saw relative increases. Most notably, spending on services like travel, performances, and medical aesthetics increased.
The same shift in consumption structure is reflected in new product spending. Among categories people are willing to try new products, services rank first, followed by food and beverages, then clothing, shoes, and bags, with beauty and personal care ranking only eighth. In DT Research Institute's 2021 new product survey, the top five categories people were most willing to buy were: clothes (61.2%), cosmetics/skincare (55.7%), food and beverages (49.5%), shoes (42.6%), and phones (41.3%).
A new consumption trend: Rational Experientialism
The shift in consumption structure stems from a change in consumption mindset. Based on the survey data, we summarize this year's consumption trend as 'rational experientialism' (2022 was rational pragmatism): 'Experience' means that if a product or service genuinely offers a better user experience or satisfies emotional value, it's okay to pay more. For example, spending more on a better hotel during travel, or paying a premium for products with better user experience. 'Rational' means they value cost-effectiveness while balancing quality and actual needs, often comparing prices across multiple platforms and seeking dupes to find the optimal consumption solution.
Below, we analyze specifically around the keywords 'experience' and 'rationality'.
First, 'experience'.
1. Nearly half spend more for emotional value
Among items with significantly increased spending, besides 'increased usage needs', two other important reasons are: the product/service provides emotional value (49.3%), and they developed new hobbies this year (41.6%). This year's trends align: from Zibo barbecue to special forces travel, from outdoor trends, concerts, to now Northeast travel... Their biggest difference from other consumer goods is that people shift from simply 'buying and using' to actively participating and immersing themselves as experiencers. In contrast, only 15.6% spent more due to 'upgrades in quality/function/design', and less than 10% due to stockpiling or price increases. Overall, the main reason for increased spending is a greater pursuit of spiritual life. This pursuit may have started as 'revenge travel' after three years of the pandemic, but has gradually transformed into a daily healing of carpe diem.
2. Willing to pay more for 'user experience' and try new things
Young people are still willing to spend more on products, provided the product itself is 'worth it'. How to judge if a product is worth it? Overall, 'urgent need in life' (70.0%), 'quality' (69.9%), and 'user experience' (68.8%) rank in the top three, roughly equal. But those born after 2000, 1995, and 1990 all put 'user experience' ahead of 'quality'. If a product or service offers a better experience, such as 'better texture and effects of skincare', 'smoother digital products', or 'more comfortable hotel stays that make you happier', young people are willing to pay a premium. Similarly, if a new product offers a better user experience, they are willing to spend to try it. The key is that 'user experience' is about one's own feelings, not product attributes or others' descriptions.
3. Prefer offline shopping over live-streaming
Another manifestation of 'experientialism' is in channel preferences. Survey data shows that the 'return to offline' trend continues post-pandemic. Although e-commerce platforms remain the most common shopping method (96.4%), 36.6% also chose 'offline shopping', higher than live-stream shopping (21.3%). We asked similar questions in past two years' surveys, and the data was very close: 36.2% in 2021, 40.1% in 2022, and 36.6% this year, basically stable. Another set of data from Winshang shows that since Q2 this year, mall foot traffic has recovered to 2019 levels, and continued to grow in Q3, up 20.9% compared to 2019. But an interesting finding is that malls and merchants have noticed that young people are more enthusiastic about B1 and B2 floors, which host the most low-price retail and small restaurants. It can be argued that people still want to be physically 'present' and experience a connection with products, but they may not spend on high-premium items in malls.
Of course, young people's pursuit of experience also has a rational side.
4. Even if cheap, they don't want to stockpile
In 2023, there were only two categories where people significantly reduced spending: beauty and personal care (15.8% spent more, 39.8% spent less), and 'clothing, bags, and shoes' (26.7% spent more, 42.1% spent less). The reasons for 'spending less' are concentrated on 'buying less': reduced usage needs, already bought last year, and reducing or stopping stockpiling rank as the top three reasons for reduced spending. In response to the question 'Share a memorable dupe or a product you bought less of', many respondents mentioned that even during promotions or with great discounts, they consider using up what they have first. For example, with cosmetics, if you don't wear makeup daily or often, consumption is slow, and samples alone can last a long time. But cosmetics have expiration dates; even if you stockpile at a discount, you might not use them or throw them away due to expiration, which is like picking up sesame seeds and losing the watermelon—wasting more money.
5. Seeking dupes, but with similar quality
'Buying cheaper' is also a reason for reduced spending, with 22.5% saving money by finding 'dupes'. However, we noticed that when choosing dupes, respondents frequently mentioned phrases like 'quality is not much different', 'same effect', 'no difference in use'. For example: 'Switched from a well-known foreign outdoor brand to a domestic OEM small brand; quality is similar, meets daily needs, and the price difference is nearly 1,000 yuan.' 'I buy various daily necessities on Pinduoduo; on average, they're much cheaper but no difference in use.' 'I used to change my phone every two years, now I plan to every 4-5 years. I used to change my car every 5-6 years, now I plan to every 10 years. Extending the replacement cycle for these durable goods doesn't actually affect the user experience.' In other words, even when reducing budgets, people care about whether the product is good to use. Whether the brand is big-name is no longer that important. Survey data also shows that KOL recommendations, celebrity endorsements, and 'big brands' or 'new concepts' no longer persuade young people to pay premiums. In response to 'What makes you repurchase?', 'quality passes' ranked first. This is also reflected in DT Business Observer's previous co-branding report: the two main reasons young people buy co-branded products are: 1. Based on their hobbies: liking the IP; 2. The product itself is OK: tasty, fun, or useful.
6. 45.8% use Pinduoduo more frequently
Survey data shows that the top five shopping apps used more frequently by consumers in 2023 are: Pinduoduo (45.8%), Taobao (40.3%), Douyin (29.9%), JD.com (28.1%), and Xiaohongshu (17.5%). Taobao and JD.com are traditional leading e-commerce platforms. This year, they also launched 'lowest price nationwide' battles amid the low-price trend. The most notable rise is Pinduoduo. At the corporate level, Pinduoduo's market value once surpassed Alibaba's; at the consumer level, Pinduoduo ranked first in 'apps with higher order frequency' across all age groups from post-80s to post-00s, especially among post-00s (54%) and post-95s (50%). Besides price advantages, many young people also favor Pinduoduo's after-sales service: instant refunds, and even 'refund without return' services. Additionally, Douyin's overall ranking in the survey has surpassed JD.com, and Xiaohongshu, originally a social content platform, has cultivated new shopping habits for some after ramping up e-commerce this year. Beyond price and quality, changes in e-commerce platform usage are also related to app user experience. Short video or live-stream formats offer a richer shopping experience than traditional shelf e-commerce. Consumers are easily influenced while browsing, and place orders while watching videos.
Final Thoughts
To summarize the core consumption trend from this survey: rational experientialism.
'Experience' is mainly reflected in: consumption items—more spending on travel and performances; product attributes—willingness to pay premiums or try new products for better 'user experience'; consumption channels—shopping offline and caring about app user experience.
'Rationality' is mainly reflected in: consumption habits—reducing stockpiling and seeking dupes; product attributes—not swayed by KOL recommendations or celebrity endorsements; consumption channels—considering price and using Pinduoduo more.
In 2022, DT Business Observer summarized the annual consumption trend as 'rational pragmatism', which does not mean frugality or stinginess, but rather rejecting excess and waste, and establishing one's own standards for goods. This year, we believe consumers have continued the rational part, but on the 'pragmatic' level, they have increased the weight of emotional value and spiritual experience. If rationalism returns goods to their use value, 'experience' returns consumption to self-perception.