Spending Spree
They're young. They have money to burn. And the race is on to win them as customers
SHANGHAI--Sharmin Du breezes into the Coffee Bean in Xintiandi, a trendy cluster of western shops and restaurants. She's wearing Diesel jeans, her yoga bag slung over a shoulder. It's 3 o'clock on a Sunday afternoon, and she hasn't eaten yet, so she orders a smoothie and a scone. Her mobile phone (the latest model, with speedy Internet access) buzzes; she answers, alternating between flirtatious Shanghainese and a more businesslike English.
The pretty 32-year-old with round eyes and red highlights in her hair is living a life all but incomprehensible to her parents--with whom she lived until just this year. "I used to spend all my money buying name brands: Louis Vuitton, Christian Dior, Hermes. If I want to travel or go out, I can do anything I want," she says. "But it's new for us. In the U.S., kids know what they like. But in China, no one in the past thought that way--what do I prefer? What do I like to do? I am just starting to figure that out now."
They're young, they're profligate, and they have western marketers positively salivating. This new generation of "Chuppies"--Chinese yuppies--is riding a wave of unprecedented commercialism in the country. There are already 100 million "middle class" Chinese, and by 2010, that number is projected to double. Chinese consumption is estimated to increase by 18 percent a year over the next decade, compared with just 2 percent in the United States. Technologically savvy, the avaricious young shoppers in this rising tide are even making purchasing decisions for their parents. They are the first generation to use credit cards--and the first to cause a substantial drop in what used to be one of the world's highest savings rates.
Marketers estimate that China's youth will become the most powerful consumer force in the world within the next 20 years. And they're being wooed by savvy marketers who clearly see a tipping point in front of them. "China is like a blank canvas," says Jude Robert, creative director at Asia Pacific Network Communications, an integrated marketing firm. "You can bring in anything you want, as long as you market it right."
The Chuppies came of age after the Tiananmen Square democracy protests in 1989. Unlike their parents, who lived through the privation and turmoil of the Cultural Revolution, this generation has known only relative stability and economic prosperity. Many openly embrace the late leader Deng Xiaoping's revolutionary proclamation that "to get rich is glorious." They even have an American nickname for themselves, "Bobos," adapted (somewhat incorrectly) from a David Brooks book published in 2000--and translated to Chinese in 2002-- Bobos in Paradise. Their growing appetite for foreign goods has coincided with a rush by multinationals into the country that began in earnest in the mid-to-late 1990s, when--after China's accession to the World Trade Organization--the government began loosening its regulations toward companies wanting to set up shop in China. "China is going from pay phones to cellphones, from standardized television dramas to DVDs, without the step of VHS in between," says Frank Pan, greater China marketing director for Diageo, the spirits company that owns Johnnie Walker, Guinness, and several other famous brands. "Bicycles are still everywhere, but last year China started hosting the Formula One races."
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