Youth in China’s lower-tier cities ‘set to power spending’

By Chu Daye Source:Global Times Published: 2019/11/19 20:18:40


Photo: VCG

A fresh force is rising in the Chinese economy that is likely to sustain strong domestic consumption growth - 120 million small-town youth, a report showed on Tuesday. 

This cohort will mean a lot to foreign companies eyeing the country's consumption market, the world's largest. 

There is a high-potential group of 120 million Chinese consumers living in lower-tier cities, who are bullish on their purchasing power over the next 12 months, according to a study released on Tuesday by global measurement and data analytics company Nielsen.

Nearly 60 percent of them have monthly disposable incomes of more than 3,000 yuan ($427), it said.

Big potential combined with stiffer competition can be expected as foreign companies expand their reaches into the traditional base of local Chinese companies in lower-tier cities, Justin Sargent, president of Nielsen China, told the Global Times.

Compared with their compatriots in the first- and second-tier cities, small-town youth identified by Nielsen show a stronger tendency to improve their housing conditions and are more willing to spend more on healthcare, according to Nielsen. 

They also want to be seen as fashionable, open-minded and ready to make decisions for themselves. In reality, such characteristics mean they are more likely to become early adopters of new products and services - and more likely to have their buying decisions influenced by celebrity endorsements.

In the company's Consumer Trend Index (CTI) released on Tuesday, the third-tier cities posted the fastest year-on-year growth during the third quarter. The index measures perceptions of local job prospects, personal finance and willingness to make purchases.

In the third quarter, domestic consumption contributed about 60.5 percent to GDP growth in China. Globally, China's CTI for the third quarter stayed at 114 points, beating a globally average of 107 points.

In the past four years, third- and fourth-tier cities contributed about 60 percent of consumption growth, according to Nielsen.

Globally, China's CTI for the third quarter stayed at 114 points, beating a globally average of 107 points.


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