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Alibaba set another Singles’ Day record as the e-commerce giant sold more than 168.2 billion yuan (US$25.3 billion) worth of products, a 39-percent increase over last year’s sales total of 120.7 billion, last week on the world’s biggest online shopping date.
While the world was stunned again by the amazing spending power of Chinese consumers, attention should be given to the Chinese people’s infinite imagination and innovation in pursuit of a better life.
China is undergoing a consumption revolution. Driven by the younger generation and characterized by new concepts, habits and means of consumption, the revolution is sweeping through every corner of the country, with its breadth and depth beyond any conventional ideas.
A recent story is quite telling. A female “wanghong” (Internet celebrity) in Hangzhou helped a new shop on the Taobao platform sell 70 million yuan worth of women’s dresses in a single night via live advertising. Please note that this is a new shop, which had no customers before the opening. The pretty girl named Viya created the narrative single-handedly and her ace in the hole is her 1.7-million-strong followers.
Seventy million yuan is a dream figure even for a fair-sized company to achieve after a year of hard work.
That’s one common example of China’s surging “wanghong economy,” which, in turn, reflects China’s booming consumption upgrade.
Wanghong economy, used to refer to the nascent Chinese digital economy driven by Web stars marketing on social media, has been a buzzword since last year. Chinese wanghong who enjoy tremendous popularity attract the attention of Internet users, which can translate into profit through e-commerce and online advertising.
According to CBN Data, a commercial data company affiliated with Alibaba, wanghong economy was worth 58 billion yuan in 2016, surpassing China’s box office in 2015.
In 2016, Alibaba’s Singles’ Day hit a sales record of 120 billion yuan, with most of that coming from its online retail platform, Taobao. Five of Taobao’s top 10 shops that day employed wanghong marketing.
The driving force behind the revolution is the generation born after the 1990s. They have parted ways with the older generations in terms of consumption. According to a recent survey, in the past six years, online consumption and spending on hedonic goods, such as food, beverages and entertainment, has expanded 20-fold, mostly due to millennials.
As “digital natives,” they have developed their consumption concepts and habits under the heavy influence of the Internet and TV. Their parents’ ideas about thrift and living within one’s means have had little impact on them.
Instead of spending money based on what they need, they buy what attracts them, what their idols are using, what their friends are using and whenever they are in the mood to buy.
So they buy everything, ranging from clothes and shoes to cosmetics and accessories, from movie tickets to online games.
They do not even blink when splurging tens of thousands of yuan to tip their favorite live show stars.
Thanks to their patronage, China is witnessing an unprecedented boom, not only in the sales of material goods, but also in cultural goods. Their spending on theater, drama and movies accounted for 84 percent of the national box office last year.
They are not only generous consumers, but active creators and participants in the new consumption patterns. Because of them, China has become the global leader in sharing economy, mobile payment, unmanned stores and many other emerging consumption patterns.
China is rapidly upgrading its consumption structure, by accelerating the development of the tourism, health and medical care and creative industries, as well as the pension industry.
China’s consumption revolution will entirely reshape the country’s economic landscape. Morgan Stanley estimates that by 2030, private consumption will account for 47 percent of China’s GDP.
China’s insatiable appetite for a stable supply of quality goods and services will also offer tremendous opportunities for foreign products. Chinese consumers welcome tender beef from the U.S., Argentina and Australia, fine wine from France and Italy, great seafood such as salmon from Norway and Russia and fruit from Thailand and Malaysia.
Supported by China’s highly developed mobile and AI technology, infrastructure and logistics, the revolution will benefit the whole world.
(The author is an English tutor and freelance writer.)