After months of stress due to the pandemic, young Chinese are creating a new wave: "revenge saving". Instead of "revenge" by shopping freely, many young people choose to save drastically.
Accordingly, young people in the country of a billion people set a goal of saving "as much as possible" and spending at a minimum level, a way to regain control of their lives. This trend is completely opposite to the trend of "revenge shopping" or "revenge spending", two concepts that have been mentioned a lot in the international media after the COVID-19 pandemic.
The volatile economic landscape has forced young Chinese to change their consumption habits.
On the social network Xiaohongshu, a 26-year-old girl named Little Zhai Zhai shared her method of limiting spending. She said she only spends 300 yuan (over 1 million VND) per month, and she also cut her daily meal expenses to just 10 yuan (35,000 VND).
Many young people also "post" ads looking for partners to achieve their savings goals together, creating a motivated and effective "compensation savings" community. One of the ways young people save money is to choose to eat at community canteens for the elderly, where fresh and delicious food is sold at relatively cheap prices.
Since last year, young Chinese have been buying one-gram “golden beans” for 400-600 yuan. Many said they usually buy one or two beans a month, equivalent to the cost of drinking milk tea.
Saving money is becoming a trend on Chinese social media sites, where young people set very strict monthly goals.
In addition to simple savings, this is a long-term investment for young people. Traditionally, middle-aged and elderly people buy the most gold, but now Gen Z (born 1997-2012) is the customer group attracted to these products.
After the pandemic, a wave of "compensatory shopping" and even borrowing to spend appeared everywhere around the world, while Chinese Gen Z chose to save.
There are hashtags such as “reverse consumption” and “stingy economy” that are trending on social media, another sign that young Chinese are tightening their purse strings. Specifically, “reverse consumption” refers to a conscious effort to cut back on spending, while “stingy economy” refers to actively seeking discounts and deals when shopping.
"Young Chinese people have a mentality of revenge saving," Shaun Rein, managing director of China Market Research (CMR), told CNBC. "Unlike young people in the 2010s who often spent more than they earned and borrowed money to buy their favorite items like Gucci handbags and iPhones, young Chinese people have now started saving more."
In addition to simple savings, this is a long-term investment for young people.
On the online forum Reddit, many accounts said they supported this new "strategy" of Chinese youth. One account said he really liked this new concept of saving. Despite having a good salary, he was willing to refuse to buy a car, a set of clothes or anything else if he felt it was not really necessary.
According to a recent report by the People's Bank of China, total RMB deposits of households in the country increased by 11.8% year-on-year in the first quarter of 2024. Although China's GDP in the first quarter exceeded expectations, growing 5.3% year-on-year, forecasts still point to a further slowdown. The International Monetary Fund (IMF) forecasts growth of 4.5% in 2025.
Confidence has disappeared among young people. It will take years, if not longer, for them to be able to spend freely again.
Another factor, experts say, is a tightening labor market that is particularly unfavorable for young people. The unemployment rate for those aged 16 to 24 was 14.2% in May, much higher than the national rate of 5%. While there is no official data on monthly earnings for college graduates, a survey found that college graduates earned an average monthly salary of 6,050 yuan ($832) in 2023, up 1% from the previous year, according to domestic reports published by MyCOS.
Confidence has been extinguished in the hearts of young people, leaving a huge void. They will have to go through a long, even very long journey, to be able to spend confidently again as before. The consumer confidence of young people is like a small flame, gradually extinguished. To rekindle that flame, there must be new sparks, stronger stimulants.
