Digital natives rise, herald consumption boom

Born between mid-1990s and early 2010s, the tech-savvy Gen Z not only promote consumption trends but inject fresh impetus into technological innovation, industry insiders said.


A potential buyer (left) checks out fitness equipment at a new store of China's e-commerce giant JD in Xi'an, Shaanxi province, on May 20, or"520", a date whose pronunciation sounds like "I love you" in Chinese that heightened consumer activity. [Photo by Yuan Jingzhi/For China Daily]

May 31, 2022

BEIJING – Gen Z consumers can’t have enough of smart stuff, cool services and intelligent tech

June 18, also known as “618”, marks China’s biggest online shopping festival for the first half of every year, and talk is this year China’s Generation Z will likely spark a consumption trend not only in China but the rest of the world, if the global efforts to contain COVID-19 outbreaks succeed in sustaining economic recovery.

On “520” or May 20, a special day for young lovebirds in China, the retail sector witnessed heightened consumer activity.

For the uninitiated, Gen Z are consumers born between the mid-1990s and the early 2010s; they number 260 million digital natives in China. That’s 19 percent of the country’s population, with a strong appetite for homegrown, intelligent and fashionable products.

That appetite ensured consumption expenditure accounted for 65.4 percent of economic growth in 2021, driving GDP up by 5.3 percentage points (to 114.4 trillion yuan or $17.7 trillion), according to the National Bureau of Statistics.

Even globally, Gen Z account for one-third of the population, which makes them the world’s largest generation group, according to a survey conducted by, a US-based mobile analytics company.

Industry insiders said China’s Gen Z, like their counterparts elsewhere, grew up with the rise of the internet, instant messaging, smart devices and other digital technologies. What’s more, they are well-educated, have developed distinct personalities and hobbies, and are capable of making their own choices.

A variety of fascinating factors characterize Gen Z’s consumption in China-and market forces are investing a great deal of time and money to understand and exploit such factors as Gen Z hold out hope that economic recovery could still be possible in spite of the resurgent COVID-19.

For instance, the guochao trend-the rise of homegrown brands that weave Chinese cultural elements into their design or branding-is gaining popularity among Gen Z, according to a new report released by the JD Research Institute for Consumption and Industrial Development.

Sales of products whose names incorporated Chinese characters that mean “Chinese red”, a culturally auspicious color, surged 326 percent year-on-year from Jan 1 to April 25.Personal care and health products, Chinese white liquor or baijiu, apparel and smartphones are among the highest-selling categories, said the JD Research Institute report.

The tech-savvy Gen Z prefer to buy intelligent, innovative products like electric vehicles, cameras, shower systems, air conditioners and lighting equipment. Their choices not only promote consumption trends and industrial upgrade but inject fresh impetus into technological innovation, industry insiders said.

In terms of health, low-sugar beverages are gaining traction among Gen Z. On JD’s online marketplaces, low-sugar products including tea drinks, beer, condiments, and vitamin and mineral supplements surged 20 times year-on-year during the Jan 1-April 25 period.

Sales of health management products skyrocketed nearly 20 times year-on-year, while that of nutritional products like seal oil and collagen chondroitin went up by more than 10 times year-on-year.


People wearing hanfu, one of the traditional Chinese styles of clothing, participate in a carnival event in Changzhou, Jiangsu province, on May 21. [Photo by Xia Chenxi/For China Daily]

Gen Z consumers also prefer visually appealing products as shown by the 166 percent year-on-year rise in their sales. They also frequently buy products and services that bring convenience to their lives.

For instance, Gen Z’s purchases of ready-to-cook meals and vacuum mop combos on JD surged by 200 percent and 142 percent year-on-year, respectively. Sales of underwear washing machines also rose almost 20 times year-on-year.

“Young Chinese shoppers, especially those born after 1995, have unique consumption ideas, prefer trying something new and boast comparatively high purchasing power,” said Chen Yao, a senior analyst at the JD Research Institute.

Gen Z consumers have witnessed China’s rapid economic development, which enabled them to have a global perspective and willingness to embrace diversity. “When enterprises launch products for this group, they should take multiple factors, such as function, appearance and design, into consideration,” Chen said.

Market consultancy iResearch said Gen Z consumers pay equal attention to entertainment and learning, have high consumption ability and prefer to buy fashionable or trendy products like high-end skin care and cosmetics recommended by key opinion leaders.

China’s young generation are emerging as mainstream consumers and becoming the driving force behind the growth of domestic brands, thanks to their higher disposable incomes and wide-ranging demand, said Bai Ming, deputy director of the international market research department at the Chinese Academy of International Trade and Economic Cooperation.

Bai said Gen Z wield enormous purchasing power, some of which has helped stoke the rapid growth of domestic brands, which in turn showcases the continuous enhancement of China’s manufacturing capacities.

“Younger Chinese shoppers are also displaying a heightened sense of national pride. China’s Gen Z consumers no longer seek high-end foreign brand names purely for social status. They are looking for products that can truly represent their identity, meaning it is more challenging than ever to maintain brand loyalty among this group,” said Kenny Yao, a director at global consulting firm AlixPartners Shanghai.

Nicole Sun, partner of the PwC M&A advisory service in Shanghai, said consumption has become a way for young people to express their values, and compared with other age groups, the younger generation has a natural affinity for brands that demonstrate “technological power”.

Moreover, an increasing number of young people would rather spend money on experiences rather than the product itself, Sun said. “Growing up in an era of rapid economic development in China, young Chinese, especially those born after 1995, have unprecedented curiosity and desire to explore local and even traditional cultures.”


An employee of The J Shop, an upgrade of JD’s fashion and lifestyle business, sells products via a livestream in Xi’an, Shaanxi province, on May 20. [Photo by Yuan Jingzhi/For China Daily]

But, COVID-19 resurgence weighed on consumer market this year, with retail sales down in the first four months.

Retail sales of consumer goods, a significant indicator of China’s consumption strength, slipped 0.2 percent year-on-year to 13.81 trillion yuan ($2.06 trillion) in the first four months. In April alone, retail sales declined 11.1 percent year-on-year to 2.95 trillion yuan mainly due to the short-term impact of COVID-19, said NBS spokesman Fu Linghui.

“The pent-up consumption will be gradually released when the epidemic is brought under control and production and people’s lives return to normal,” Fu said, adding consumption will gradually recover from the COVID-19 impact in the second quarter and continue to stabilize the economy.

Industry experts said China’s consumer market growth is expected to see recovery this year, on the back of a series of supportive policies to shore up consumption.

“Consumption plays a fundamental role in China’s economic development and is the main driving force boosting economic growth and ensuring people’s livelihoods,” said Wang Yun, a researcher with the Academy of Macroeconomic Research.

Noting that COVID-19 resurgence is a risk to consumption recovery, Wang called for more efforts to both unleash consumption potential in big-ticket items like automobiles and home appliances, and ease restrictions on home purchases, to promote the recovery of consumption and stabilize economic growth.

China will roll out measures to boost consumption, so as to keep economic fundamentals stable and cushion the impact of COVID-19, according to the decision made at an executive meeting of the State Council, China’s Cabinet, in April.

It was decided at the meeting that relief policies for hard-hit sectors such as catering, retail, tourism, civil aviation, and road, waterways and railway transportation will be promptly and fully implemented. Local authorities are encouraged to intensify support and assistance for these sectors, to stabilize more market entities in consumer services.

Spending on home appliances, automobiles and other big-ticket items will be encouraged. No new restrictive measures on car purchases shall be set at the local level. Localities with purchase restrictions already in place should increase new license plate quotas step by step.

Liu Xiangdong, a researcher with the China Center for International Economic Exchanges, said consumption, as a significant pillar of economic development, is expected to maintain growth momentum this year despite headwinds from external uncertainties and resurgent domestic COVID-19 infections.

A series of measures like smoothing logistics and supply chains, implementing tax and fee reductions and giving out consumption vouchers should be taken to further unleash consumption potential, Liu said, adding that more supportive policies should be formulated to boost employment, increase residents’ income and enhance their purchasing power.

Young Chinese consumers are more global-minded and enthusiastic about homegrown products compared with previous generations, said Zhao Ping, deputy head of the Beijing-based Academy of China Council for the Promotion of International Trade, adding they are set to become the mainstay of China’s next powerful consumption group.

She called for more efforts to encourage enterprises to leverage new-generation information technologies like big data, cloud computing and artificial intelligence so as to create new types of green and intelligent consumer goods, and cultivate new consumption growth points.

scroll to top