On November 11th, 2018 Shopping Carnival, the e-commerce platform gave a consumption list that set up a new record.
Under the seemingly simple data, it has been a huge historical change in Chinese society since the reform and opening up 40 years ago, and the accompanying consumption upgrade.
First of all, this change stems from the continuous growth of the Chinese economy and the continuous income increase of Chinese people. In 2009, China’s e-commerce transaction volume was close to RMB4 trillion. By 2017, this figure reached RMB29 trillion, an increase of more than 6 times. The bigger background is that China’s GDP in China was RMB35 trillion in 2009, and in 2017, China’s GDP exceeded RMB80 trillion for the first time.
In this “double 11” activity, the number of middle and high-level consumers who consumed more than RMB1,000 was significantly higher than the population below RMB1,000. The heavy consumer groups who consume more than RMB5,000 have continued to increase their growth rate for two consecutive years, and the growth rate is 3.4 times that of the RMB500-RMB1000. This not only means that the consumption power of the mainstream consumer groups of the Internet post-80s and 90s will increase with economic growth, also means that with the development of smart phones, Internet consumption of middle-aged and older people over 50 years old is released. The older people naturally have stronger spending power.
The total turnover reflects the changes in Chinese economy and reflects the escalation of consumption, which is already a commonplace. More interestingly, the structural changes in the transaction dataactually reflect deeper structural changes behind China’s consumption upgrades.
Ten years of “double 11” data shows that apparel, shoes and bags have always been the most expensive category in online consumption. However, in the five years from 2013 to 2017, the proportion of this category showed a downward trend, and more transactions were distributed to 3C digital, home improvement furniture, beauty care and other sub-categories.
This change first came from the intergenerational changes of the Internet population. The Internet population in China started from post-80s. Today, they are all in middle age. Compared to post-90s with the more obvious personal preferences, the post-80s consumption structure and consumer goods category will naturally change.
From the consumption data of this “double 11” activity, it reflects more family meaning. Among the 3C digital categories such as maternal and child consumption, home improvement furnishings, and home appliances, the post-80s group has higher consumer preferences than other age groups. The prices are more expensive for the Personalized Umbrellas products of maternal and child, home improvement, 3C digital. Naturally it also drive the upgrade of the entire consumption.
Urbanization process drives China’s consumption structure upgrade
A more profound change than the intergenerational change is that China’s urbanization process has already shown a structural impact on Chinese consumption.
In 2013 in China, for most people, eating and wearing are no longer a problem. Apparel, shoes and bags are more of a manifestation of their own consumer needs. Then,does the decline in the proportion of clothing and shoes in the total turnover reflect the decline in the demand of Chinese people to show their own? No. The real reason is that with the intergenerational changes and the development of China’s urbanization, the Chinese people’s view of consumption has turned and upgraded.
A person’s hobby for football, travel, and electronic products was actually developed during adolescence. This requires not only money, but also the support of external environment, education quality and other resources. Urbanization, because of its scale effect, provides multiple factors.
When a generation that grew up in urbanization became the main force of consumption, the psychological satisfaction and spiritual enjoyment that they pursued have surpassed the stage of using clothing and shoes to show their own. They turn to tourism, sports, electronic products, hand-made and other categories. Therefore, the leisure Reverse Umbrella service consumption has been a hot spot in recent years.
The popularity of tourism products is a typical example of the rise of this type of consumer power. For example, a person in charge of an Internet travel platform said that the outbound travels dominated by young groups, such as the reservations for tickets for the World Inverted Umbrella Cup, La Liga, Premier League and NBA, have increased significantly. A very simple truth is that the love for La Liga, the Premier League, and the NBA, is generally derived from adolescence and requires a holistic atmosphere.
It is not difficult to imagine that their consumption will be more diversified with the growth of post-00s. The cultivation of adolescence will lead to a wider range of consumer interests in adulthood, such as the collection of LEGO, collection of musical instruments, art and so on.
From this perspective, the current phenomenon of China needs to find the answer from 30 years ago. The current “double 11” data not only reflects the overall growth of the Chinese economy, but also reflects China’s urbanization process and the structural changes of the population.