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Deciphering China’s Millenial Generation

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Shanghai

China’s Generation Y—something new and something old

The People’s Republic of China has come a long way from when the country was racked with political and cultural instability and widespread poverty.

It would take abject desperation and a powerful leader to thrust China’s door open to a new type of socialism with Chinese characteristics in 1978 that would set the country on the path to economic growth.

It comes as no surprise then that children born after that year would eventually grow up in a different China from what their parents knew. These boom years would define the life of the country’s Generation Y or the millenials—children growing up in the years of China’s emerging economic prowess and strict one-child policy from 1980 to 1989.

Thirty three years after economic reform, some 240 million millenials now have access to things generations before them could only dream of having.

Vicky Zhang, a 28-year-old marketing executive recalls how her father once woke up in the wee hours of the morning to claim a coupon that would allow the family to buy its first refrigerator. Now, some 15 years later, she is a well-traveled professional with a degree from a foreign university. She recently bought the newest Apple gadget, the iPad, and regularly uses her credit card to shop for clothes and shoes online.

China Connection
This brings us to one of the most striking game changers in Chinese society today: the Internet. China is currently the country with the largest online population in the world with 400 million people online. They rely on the Internet for almost all their needs; from shopping to downloading music to expressing opinions on the government and changing societal norms.

More importantly, the Internet has given citizens another avenue to voice complaints and try to seek change. According to state media, there are an estimated 233 million users accessing the Internet through their mobile phones, while the number of people with broadband access has reached 346 million.

On average, Chinese people spend 2.7 hours a day online, according to a report by business consulting firm Boston Consulting Group. Millenials are naturally tech-savvy and consider using social networks, gaming, and commenting on online forums a normal part of their everyday lives.

In China, the most famous online game has to be the massively multi-player, online role-playing game World of Warcraft, where local players indulge their fantasies using prepaid cards in 40and 66-minute increments. The game has become so popular that the government has made efforts to impose its own brand of censorship on the version of the game played in the country. Most players of the game can be found hunched in cavernous, smoky Internet cafes dotted across the city and provinces.

A majority of shopping is now also done online, with local Alibaba subsidiary, Taobao, taking the biggest market share at 190 million registered users. The name means ‘to look for treasure,’ an apt name since prices of goods usually found online on Taobao can easily be at least 50% cheaper than retail prices if you have the patience to look around and compare.

The online shopping platform has forced companies to rethink their China strategy, with Japanese clothing brand Uniqlo maintaining a strong online presence on Taobao. In 2009, more than US$29 billion worth of goods changed hands on Taobao.

According to government statistics, online retail in China made up 1.98% of China’s total retail trade for that period. A 29-year-old Shanghainese graphic designer says she shops on Taobao almost every week. “You know my outfit today? It’s all from Taobao. They even sell famous brands cheaper online,” she says.

Necessary Luxuries
McKinsey & Company, a consulting firm from Chicago, says that 80% of China’s wealthiest are below 45 years old, a fact that accurately reflects China’s new fortunes. China is now the world’s biggest car market overtaking the United States. Foreign international brands have been refocusing their attention to tap into this relatively young and affluent market as it faces dwindling sales in the West.

Despite easy access to imitation goods in the country, luxury brands have been doing brisk business. China is now the second biggest luxury market in the world after Japan. State paper China Daily says that a typical luxury consumer in China tends to be well educated, falling between ages 20–40 years old. Of this range, millenials make up 9% of total luxury buyers with the majority of buyers made up of people ages 31–45 years old.

It comes as a surprise that not all Chinese who buy luxury goods are wealthy. The monthly salary of luxury shoppers varies widely ranging from US$732–7,320. This indicates that Chinese buyers tend to prioritize spending on luxury items more than the rest of the world. It is not unthinkable, then, to find yourself in a far-flung, second-tier city in North China with its own Louis Vuitton store.

French fashion house Chanel opened a new boutique in Shanghai this year with a fashion show by Karl Lagerfeld himself. Another luxury fashion brand, Dior, also held a fashion show presenting its summer collection in the same vicinity.

The More Things Change...
In general, while millenials are obviously more privileged than the generations before them, the pressure to succeed is greater since the opportunities open to them have raised the bar.

A child will have the concentrated love and attention of one set of parents and two sets of grandparents. Grandparents are an active part of child rearing, helping out in babysitting duties if both parents work. This doting has led some to refer to the children of China’s one-child policy as ‘little emperors.’

A BusinessWeek article discussing China’s Generation Y paints a different picture. It says this group has high expectations for their careers and know that they have to work hard to reach their goals. However, while Generation Y is faster to embrace Western habits, that behavior is still filtered through the prism of traditions and customs.

The article reports that survey results show 45% of Generation Y respondents consider family the most important part of their lives. In contrast, 17% said friends were more important and 12% considered their career a priority. Today’s Chinese have a strong sense of family and consider it their obligation to take care of the immediate family as well as uncles and aunties.

One friend, on considering a venue for her wedding reception insists that the place serve Chinese food. She herself preferred French food at the reception but went with Chinese fare in deference to her older relatives.

Typically, when a Chinese couple is dating, the man’s parents will screen the girlfriend for their approval. The girlfriend’s parents will also screen the man before the relationship can go any further. Jasmine Wu, a 29-year-old Mandarin teacher in Shanghai says, “I once dated a guy who stopped seeing me when his mom disapproved of my work.”

She says the mom did not think that teaching Mandarin to foreigners would be a stable job and told the son to look for another girl despite his liking Wu a lot. When asked how she feels about it, she shrugs and says that for practical reasons it would be better not to push it since her date’s parents did not approve.

The new generation of Chinese may have access to more opportunities, and definitely more toys, but there are some things, it seems, that even decades of economic reform cannot change.

Print ed: 07/10

 

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