Why are Chinese youth ’buying now, and paying later’?
中國年輕人為什么轉向了“先買(mǎi)后付”的消費模式？
People aged between 18 and 29 constitute 36 percent of the borrowers of consumer finance (not including housing loans), making them the most numerous of the borrowers, according to market research on China’s consumer credit markets in 2018, released by the Academic Center for China’s Economic Practice and Thinking at Tsinghua University.
The report also notes that users aged between 30 and 39, 40 and 49 make up 30 percent and 33 percent respectively, with the last one percent being 50 years or older.
The sharp contrast between the largest group and the smallest group reflects the changes in consumption habits between different generations of Chinese people. That is to say, the older generation prefers living within their means, while the younger favors living in the moment or consuming first and paying later.
Different life experiences lie behind this phenomenon. On the one hand, Chinese born in the 1960s usually hold a frugal attitude towards consumption as they’ve spent most of their life working hard, trying to save as much money as possible in case of rainy days.
On the other hand, Chinese youth now have better living conditions than when they were children and do not have to worry about daily necessities, so they often don’t think twice before buying what they want.
The rapid development of the world’s most populated country since its reform and opening-up in 1978 is seeing a transition from a manufacturing-oriented society to a consumer one.
Years of manufacturing efforts are producing more goods available for consumption. Under these conditions, it’s easy to understand why Chinese youth don’t need to worry that the things they want to buy won’t be available. On the contrary, what they do worry about is that they don’t have enough money to buy most of the things they want.
Another factor driving the "buy first, pay later" trend is undoubtedly the increasingly popular and advanced online credit services in a cashless Chinese society.
Besides Alipay’s Huabei, another e-commerce giant JD.com also launched its virtual credit card service Baitiao to let its users buy products on its app and websites now and pay the debt later, usually in the next month or following months if users choose to pay in installments with interest.
