Aug 18, 2021|

From Gen Z to Silver Seniors: Potential of Chinese Consumption Power


by Siyi Zhao

When it comes to the next powerful consumption groups in China, Generation Z and the Silver Generation are rushing to become the backbone force. During an online roundtable held on August 18, JD’s data analysis shows distinctive consumption trends of these two generations: youngsters are jumping on the bandwagon for products with cultural IP, while seniors are straining to get used to the rapid digitalization of society.

For the past decade, the consumption power of Chinese people has surged tremendously. According to the National Bureau of Statistics, China’s total retail sales in 2020 have doubled since 2011, with online shopping business increasingly infiltrating people’s lives and gradually becoming an indispensable part of the retail industry.

Based on the sales report of JD’s 618 Grand Promotion in 2021, more and more people across China are joining the shopping festivities, with more than half of the sales contribution from lower-tier cities. And the sales distribution of different generations has been becoming more and more balanced. Although the bulk of the customers are still people from the age of 26 to 55, Generation Z and the Silver Generation are expanding their territory continuously.

A Generation Pursuing Group Identity

iResearch China, a market research and consulting company focusing on e-commerce reveals that, while China has gradually deepened its integration with the international society in the end of the 20th century, Generation Z were born subsequently with the emerging of the internet. Since then, they have been marinated in a virtual and diverse environment, and formed a strong sense of individuality, which leads to the main characteristic of the group’s consumption behavior: willingness to pay for the additional value of the products, usually to catch up with the vogue of the society.

“Our research shows that the key reason for Generation Z to buy items like action figures and blind boxes is for social value within their friend circle so as to grasp a sense of group identity,” says Liu Hui, the chief data officer of JD Big Data Research Institute.

Therefore, while JD’s overall analysis indicates that China’s Gen Z are the predominant consumers for all the new launches, smart products, and emerging services, they specifically developed their dominance in the art toy industry possessing cultural IP, in which the sales of action figures have soared by 618% year-on-year in 2020, sales of Lego by 375%, and blind boxes by 235%.

Meanwhile, youngsters are also actively embracing those time-honored brands, for which sales among Gen Z have increased by 315% during JD’s 618 Grand Promotion in 2021, a surge significantly surpassing the sales from their parents’ generation.

Moreover, the potential of purchasing health products by Gen Z is enormous. The sharpest increase comes from the annual sales volume of antioxidant products, which is six times more than last year. Sales of smart health observation devices have also risen 314%, making the biggest year-on-year increase across all age groups.

Another major growth area for Gen Z lies in the pet category, in which the increase of sales for overall customers for this group has increased by five times more than in other customer groups.

In addition to all the entertainment items, JD analysis points out that over one million people under the age of 25 are searching for books for self-development every day, in which books of all kinds of qualification tests for professional certificates are among the best sellers, demonstrating that studying for skills and occupations contribute to some of the biggest pressures Gen Z have been bearing.

Chasing the Digital World as Everyone Does

According to the National Census, China has 264 million people above the age of 60, accounting for 18.7% of the total population. Meanwhile, according to the Cyberspace Administration of China, one fourth of Chinese netizens are above the age of 50, showing the Silver Generation will become a major force in online consumption.

However, Qian Yu, a senior researcher from iResearch China, points out what the silver seniors are requesting is customized products and services catering to their needs. “The problem is that for seniors, sometimes they can’t purchase anything because there is simply no product for them to consume in the market,” he says, “and it is inappropriate to throw out the so called ‘solicitude-marketing,’ which portrays the seniors as a passive and underprivileged group of people.”

The pandemic combined with the prevailing usage of online services, especially the health services, have further precipitated seniors’ participation in online shopping. JD analysis suggests that sales of health services have increased ten times more in 2020, and the volume of orders of online diagnoses has also spiked by 233 times.

Apart from taking care of their physical health, the silver group has invested significantly in maintaining their hobbies. Sales of instruments, exercise equipment, photographic gear, and cosmetic products have all increased by around 100% for the group.

The biggest consumption trend for seniors is in the industry of smart digital products. Last year, the number of people between 45 to 55 who purchased smart equipment had doubled, and that for people above 56 had also grown by 250%. Other than catching up with the society’s technology trend, they are buying other ingeniously designed items for emergencies, such as wireless emergency buttons, and portable oxygen machines.

To help improve their shopping experience, JD has launched a special interface within JD’s app for seniors, in which the font size is larger, customer service is easily reached, and interaction with family members is convenient, basically assuring every step seniors are taking for online shopping is easy and clear. For instance, they can talk to their family members within the app by just clicking a shortcut button. Then the latter can pay for the orders remotely.

Liu Hui of JD believes seniors’ consumption behaviors are driven by surprisingly open attitudes. “Seniors are actually more than excited to accept new products for a healthier and more convenient life,” he said. “They seem more willing to buy smartphones everybody else is using, rather than being shut out of the digital world.”