Little Emperors: the future of China’s consumer market

Article Type: Guest editorial From: Young Consumers, Volume 10, Issue 2

The key to knowing the future of China’s consumer market is,essentially, to understand Chinese Little Emperors – a unique phenomenon in the world. China’s one-child policy, started in 1979, created an extended-nuclear family structure of four grandparents, two parents and one child, with both parents and two sets of grandparents lavishing attention and resources on their only child. The Little Emperor generation today has become the most attractive market segment, due to their lifestyle, consumption values,attitude and behavioral patterns, which are distinguishable from not only their parents’ generation but also their counterparts in the rest of the world.

First, China’s population is predominantly young, with about 60 percent under the age of 35; and with the opening up of China, these young people have been quick to adopt new cultural values. These children often grow up spoiled,demanding what they want and spending what they have. Although younger does not always translate to richer, the young Chinese consumer segment is unlike other consumer segments in their lifestyle and spending patterns. While older consumers are not likely to build up credit card debts because they have known poverty, young consumers in the cities have started to spend more using credit cards and other forms of credit. Instant gratification rather than patience is likely to be the norm.

Second, China’s emerging middle class is also unusually young, being in the 25 to 44 years old group, compared with that of most developed markets,whose highest earners tend to be middle aged. Because the Chinese traditionally value education, especially in urban families, household income is disproportionably spent on their children’s schooling. As a result, Chinese youth usually get high-paying jobs early, leading them to join the young,emerging middle class. Therefore, the self-indulgent consumerism has expanded from children’s products into luxury goods, and this has been a driving force behind the rapid expansion of the luxury goods industry in recent years. Particularly, young Chinese consumers are willing to spend a greater proportion of their income on luxury goods than their parents and their counterparts in the US and Europe.

Although the traditional Chinese culture highly values being thrifty and frugal, under the influence of globalization and rapid economic development,Chinese young consumers have begun to embrace modern consumption values, such as materialism and hedonic consumption and to seek for instant gratification through excessive purchasing. Young Chinese consumers tend to value modern products and name brands to impress their peers. The empirical study conducted by Li, Jiang, An, Shen and Jin examined how young Chinese consumers’ money attitudes affect their compulsive buying behavior and how gender moderates such a relationship. Their results show that the consideration of money as a means to buy high quality products and brands increases Chinese young consumers compulsive buying. Such an effect was stronger for male than female young consumers. This result to some extent reflected the influence of materialism and western values on the younger generation in China.

The pressures of being a Little Emperor in a rapidly changing society are reflected in consumer experiences, particularly in the meanings attached to products and brands. Based on their case study with urban young consumers,especially young professional women, Scelzo and Lerman suggest that while being a Little Emperor comes with expectations and responsibilities, today’s Little Emperors have an opportunity to express themselves in ways that their parents did not – through consumption. As such, the world of the Little Emperor is filled with a colorful array of clothing, accessories, and cosmetics stands. For example, Little Emperors carefully and deliberately use cosmetics as a means to reduce the tension arising from the plurality of social,professional, and personal expectations.

The Little Emperors also have the pressure of maintaining expectations from friends, family, and society to be well educated and successful in society. The first generation of Little Emperors is now in their 20s and has entered, or is going to enter, colleges. Recently, more and more Chinese students go abroad to finish their university education. The importance of education in Chinese culture should be duly noted for those who wish to target Little Emperors. Chung, Holdsworth, Li, and Fam’s study, based on samples of Chinese students attending New Zealand universities, reveals that Chinese cultural values still have an impact on students’ choice of international tertiary education and their preferred communication sources for university choice. This study shows that New Zealand society appeals for its low corruption and high level of honesty and fairness, which are attractive to these Chinese youths because these values help to reinforce group harmony, a prominent characteristic of Chinese society. Chinese students’ preference of using education fairs,university open days and representative agents as sources of information for university enrolment is consistent with the high context nature of Chinese society.

Comparied with most western countries, the online shopping environment in China is still relatively less developed and participation level is relative low. However, a rapid growth rate of online shopping among young Chinese consumers is noted. In an attempt to understand Chinese online consumers,Mummalaneni and Meng’s study finds that, online consumers can segmented on their self-rated internet skills and their perception of the challenges involved in online shopping. Their results also indicate clear differences among these segments on their perceptions of service quality and the value offered by the web stores. Understanding differences among Chinese youths in online shopping behaviors and service quality perception will have important managerial implication for online stores.

As China is becoming a consumer society, consumer value changes are largely influenced by mass media and commercials. Such media influences are particularly stronger on young consumers. Chan and Cai’s study examined the impact of television advertising viewing on perceived affluence in the society and materialism based on the cultivation theory, which suggests that television has long-term but gradual and indirect effects on viewers. They find a positive relationship between television advertising viewing and adolescent viewers’materialism. In particular, heavy viewers have a higher level of perceived affluence and materialism than light viewers. When television-advertising viewing was controlled, urban respondents have a higher perceived affluence while rural respondents have a higher level of materialism.

Young consumers nowadays play more important role in purchasing decision making and it will be interesting to know Chinese children’s influences on family buying decision making process. Wut and Chou’s study find that parents and their children usually engage together in decision making process among Chinese families. However, children have more influence in the choice making stage while parents have more control in the final decision stage. Given teenagers now have regular internet access, new products information could be made available online so that those young consumers might at least act as information providers. Therefore, direct mailing and incorporated with internet shopping are likely to be the popular promotion channels for the family products.

Given advertising has significant impacts on young consumers, who are more involved in decision-making process than old generation, Valero provides a legal briefing on the issue of advertising to Chinese children. Because children lack experience, objectivity and the critical faculty to thwart behind the advertising appeal, Chinese government has put in place a legal system to regulate advertising directed to children. China’s youthful advertising industry has changed a lot in little more than a quarter of century. Advertisers entering the growing youth market in China should be aware of the still limited role played by self-regulation. The increasing importance and effectiveness of such self-regulation dictates that the advertising industry and the government authorities arrive at the same interpretation of moral standards.

In summary, understanding the development and trends occurring in China will lead to an understanding of the purchasing behavior and lifestyles of China’s future consumers. Those who are younger, better educated, and financially better off are clearly the most likely bearers of emerging consumerist values, such as conspicuous consumption, aspiration for self-actualization and worshipping Western lifestyle. These relatively younger Chinese consumers seem to be less concerned about saving for their old age and prefer buying the most expensive items they can afford to suit their lifestyle. This generation exhibits characteristics that will help drive China to become a nation of spenders. We hope this special issue will stimulate further academic inquiry of China’s youth markets as well as provide managerial implications for multinational marketers targeting these Little Emperors.

Cheng Lu WangCheng Lu Wang is in the Department of Marketing, College of Business, University of New Haven, West Haven, Connecticut, USA.

About the Guest Editor

Cheng Lu Wang, PhD (Oklahoma State University), is Professor of Marketing in the Department of Marketing, College of Business, University of New Haven. His research areas include consumer behavior and international marketing. He has published in a number of refereed journals, including: Journal of Consumer Psychology, Psychology and Marketing, Journal of Consumer Affairs, Industrial Marketing Management, Management International Review, European Journal of Marketing, International Marketing Review and Journal of World Business, among others. Cheng Lu Wang can be contacted at: cwang@newhaven.edu