China’s Gen Z consumers shift from chasing status and trends to be ‘more rational and selective’

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“CAUTIOUS” APPROACH IN BOOSTING Use

Since 2021, China’s government has introduced a series of procedures aimed at redistributing income and wealth, generally framed under the symbol of” popular prosperity”, says Mr Xu.

This has led to reprisals on high-paying companies like tutoring, the financial industry, and the software market. &nbsp,

” While these methods were intended to address income inequality, the effects have been significant, with the economy suffering greatly.”

Yet, there seems to be a change in the government’s strategy. According to Mr. Xu, new Third Plenum policies may recommend a move toward encouraging urbanization and stimulating migrant workers to settle in cities, work for a regular job, and perhaps even buy homes. &nbsp,

Instead of focusing only on lowering the earnings of the rich, the goal is to encourage growth in income among the lower-income groups. This technique, while encouraging, is unlikely to produce immediate results, and perhaps get five to 10 years to materialise- if it succeeds at all, Mr Xu adds.

Mr. Yu remarked that” the state is very evident that they do need to pull domestic consumption, and today’s situation is not appropriate for them.”

They want to really deepen the reform and finish a number of tasks in order to improve the Taiwanese economy’s quality, not just its quantity.

Amid these coverage shifts, Chinese homes, especially in the country’s largest towns, are exhibiting a designated caution in their investing. The rapid drop in housing costs in these urban centers is one of the main causes of this. &nbsp,

Previous tenacious housing markets started to deteriorate in mid-2023, according to EIU’s Mr. Xu, following the trend of smaller towns that saw value declines in 2021 and 2022. This decline has resulted in a bad success effect, where people’s spending is influenced by both their perceived wealth and their income.

The government’s assault on well-paying work in major Chinese cities has even contributed to this precaution. For example, investment banking incomes have dropped to as low as quarter of what they once were, causing consumer spending to decline. This trend is further demonstrated by a 7 % decrease in China’s personal income tax income this year.

” If you see a really small cut in personal income tax paid, that may indicate that all those who enjoy good jobs may have experienced a significant decline. So that’s possibly explaining why usage has been more careful”.

Kantar Worldpanel’s Mr Yu believes there’s a lot of “big intentions” behind driving use, although those are “grand approaches to translate into substantial policy, and may take some time”.

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China’s eateries slash prices by up to half to woo diners hungry for value, but at what cost?

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According to spectators, a competitive environment is compelled to provide more value to extremely budget-conscious diners, particularly as the economy is deteriorating and prices are rising, making it more difficult for consumers to tighten their belts.

They also warn against continuing cost reductions from the perspective of the company. Eating establishments also need to make sure their food and service requirements are upheld, in order for their popularity to suffer. &nbsp,

According to Mr. Daniel Zipser, who leads McKinsey’s customer and financial function in Asia, “winners will be those who adapt quickly to new market trends and are adaptable to consumer demands with excellent service level.”

THE QUEST FOR Price

From cuisine to espresso, F&amp, B manufacturers have been slashing costs to get exceedingly budget-conscious diners in a competitive marketplace. &nbsp,

Among them is high-end diner network Hefu Noodle, which announced price reductions in June. A standard dish of pasta costs between 16 and 29 renminbi for members, almost half the price of a regular bowl of noodles when the company was founded in 2012 when Beijing Business Today first launched.

However, common Taiwanese-style cuisine network Xiabu Xiabu announced in May that the prices of its new list would “return to the ancient days”.

According to local media website Guangzhou Daily, average set meal prices that have decreased by more than 10 %, with a single food costing 58 yuan on average and a double meal costing 130 yuan.

The latest developments have sparked conversation on Taiwanese social media platforms. A netizen remarked,” Cuisine prices are falling faster than the heat of the broth.

Local diners are slashing costs, and international fast food chains are also bucking the trend. According to a report released on August 4 by the state-run newspaper Global Times, US fast food giant Burger King is pricing its unique burgers at 9.9 yuan each, almost a fourth of what it was originally priced at.

In the area of caffeine, which Reuters reported in May, Starbucks has increased the number of discount deals being offered nationwide. Belinda Wong, the CEO of Starbucks China, stated in January that the business is” not interested in entering the rate battle.”

According to experts, the price cuts are intended to entice customers because consumer spending is sucked in by the nation’s second-largest economy’s economic and labor market problems. &nbsp,

According to a research report released by Daxue Consulting in April, the latest craze for customers in China is to look for value-for-money choices.

Of the 1, 000 survey respondents, 32.6 per share viewed value as the top concern. Second was the presence of particular recipes, followed by the restaurant’s general atmosphere. &nbsp,

The current trend of pricing is not a passing cycle, and is a reaction to major shifts in the market, said Ms Ashley Dudarenok, chairman of China-focused digital firm ChoZan.

She also made note of the fact that consumer choices for the Foreign F&amp, B business vary considerably depending on the individual and the time party.

According to a survey conducted by McKinsey &amp, Company at the end of 2023, client attitudes in industrial China varied significantly between different age groups.

The Gen Zs, aged 18 to 25, exhibit a more “optimistic” perspective on their economic prospects, leading them to spend more on excellent services that offer personal and social significance. &nbsp,

In comparison, the rising middle class in primary- and second-tier towns, especially those aged 26 to 41, tends to follow a more traditional approach to investing, particularly on F&amp, B. &nbsp,

This is often due to their financial agreements, such as children’s education and loan payments, said Mr Zipser.

Better Swallows, BUT AT WHAT COST?

Experts warn that such actions may not be responsible in the long run despite F&amp, B companies dangling discounts and promotions to give consumers more for their penny.

According to Mr. Zipser, the effects on company loyalty and long-term success is questionable, particularly if lower prices come with a price.

” Consumers are looking for price choices, but compromising on service quality can quickly damage a company’s picture”, he said.

Ms Chen, the hotpot standard who frequents chain restaurant brands, said that based on her observations, outlets scarcely maintain portion sizes after reducing prices, even if the quality of food stays the same.

” For example, after Tai Er ( known for its Chinese sauerkraut fish ) lowered its prices, the portion size of its signature pickled fish dish became smaller”, she claimed.

In a Jul 19 report from the Chinese financial paper The Securities Times, Jiumaojiu acknowledged that the exclusive pursuit of low prices is “unsustainable.” &nbsp,

The catering business added that it would instead” continue to maintain the product value-for-money ratio while achieving a balance between quality and price.”

Similarly, Haidilao does n’t see lower prices as the pivotal factor in attracting business, even as it comes out with more budget ventures.

The Chinese hotpot chain first introduced Xiao Hai Hotpot last year, which the company claims is aimed at offering affordable yet high-quality hotpot options. Customers have each spent under 80 yuan on average, it added.

According to popular review and rating app Dianping, checks by CNA found that a 54-yuan value for an individual weekday lunch hotpot set meal coupon at Xiao Hai Hotpot is comparable to a children’s meal coupon, which is only valid for 0. 9 yuan.
 

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China downpour kills at least 50 people in Hunan Province: CCTV

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The downpours in late July were triggered by Typhoon Gaemi, which moved on from the Philippines and Taiwan to make landfall in China, hitting the hilly, landlocked Hunan province particularly hard. Last month, authorities evacuated almost 300,000 people and halted public transportation in eastern China. Large storms have fallen acrossContinue Reading

‘Charging station for modern life’: Why Chinese youths are flocking to ‘retirement homes’

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The majority of the residents are aged between 20 and 40, including consultants, practitioners experiencing job stagnation, and experience applicants. It’s now fully booked for the quarter.

Guanye does not have any formal age restrictions, but there are some unique requirements at another facility in Yunnan’s Mandiu Ancient Village.

Lu Baike, the leader of the Chinese news website Yitiao, stated in an interview that they do not take people over the age of 45. He explained that many of them spend a few days visiting their communities and responsibilities before returning.

” This defeats the purpose of coming around”, he said.

In addition, his heart also does not take in those who have “never worked a day after leaving college and just want to ‘ lay flat ‘”, as this thinking does not coincide with the group’s values.

Guanye’s strategy even diverges from standard caring facilities. The founders told CNA that in a wider efforts of remote revitalization, they had expanded their perception to include a larger community, including renovating unoccupied homes.

Dishes are social matters. Normal activities include rafting, hiking, photo excursions and dumpling-making events, which Mr Cui says helps develop connections between the lodgers and villagers.

Participating in the activities is volunteer because Ms. Xiaofei said the main goal is to create lasting relationships and learn new things, she said.

In China, related children retirement communities have sprouted, indicating a growing demand. While there is no common collection for research, checks by CNA found that such features have been established in areas like Zhengzhou, Chongqing, Yunnan and Shandong.

But the pattern of adolescent retirement homes is seeing opprobrium, particularly from the older generation.

On Chinese social media app Weibo, one person had this to claim:” Why do young citizens want to’ withdraw’ so early? It’s a situation of neglecting person’s correct jobs”.

Another user claimed that the trend reflects “real issues” like the “harsh” work environment and function culture in China, and that it would be difficult to imagine how society was advance if all of the young people adopted this attitude.

” THEY ACQUIRE CULTURAL CAPITAL”

” Young people are tired, many do n’t see hope in achieving what they want in their careers”, acknowledged Dr Amir Hampel, a clinical assistant professor of Global China Studies at NYU Shanghai.

They are n’t just wasting money, he told CNA, even though some choose to opt for a brief disconnect at youth retirement homes.

” They do n’t sit around getting drunk at these centres, for the most part. They acquire cultural capital”.

Fang Jingyu, a 20-year-old university student, was surprised by the brief two-day stay she had at Guanye Youth Retirement Village in early July.

” Previously, I had some prejudice towards rural homestays, with the feeling that the bourgeois charm and local culture were often at odds”, she told CNA.

” However, this was not the case here. I was deeply impressed by the strong emotional bonds between the organisers, guests, and local villagers”.

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