Young people planning to increase savings

The COVID-19 pandemic has raised China’s “spending-for-today” generation’s awareness of the importance of saving, according to an industry survey.

Launched by Fenqile, China’s first instalment e-commerce platform owned by Nasdaq-listed LexinFintech, the study found that over half of respondents said they planned to increase monthly savings after the pandemic, while fewer than 20 percent said they would reduce savings.

Among those surveyed, more than three quarters were under the age of 30, with over 54 percent between 20 and 24 and around 80 percent had completed or were in the midst of completing their college education

The younger the consumers, the more likely they were to increase savings, the study noted, with 56.8 percent of those between 20 and 24 saying they would save more after the health crisis, the most of all age groups.

Younger consumers, who have become the dominant force in China’s consumer market but are generally not on a firm footing financially, have come to realize that savings are needed to reduce the risks from changes in financial conditions, much more so than their older peers, according to the survey.

Meanwhile, the younger generation are increasingly embracing consumer credit. Aside from savings, consumer credit is increasingly seen as a smart financial tool by young Chinese, and considered an effective way to cushion any personal financial impact caused by the pandemic.

Compared with before the pandemic, nearly two-thirds of respondents felt more positive about consumer loans and instalment payment after the pandemic, with just 11.4 percent feeling otherwise.

The study also found that young Chinese are becoming increasingly pragmatic, focusing on items viewed as daily necessities and health-care products. Items such as 5G smartphones, clothing, eating out, preventative health care and health insurance top the list of the products that young consumers favor, with luxury goods at the bottom of the list.