It is obvious by now that the Age of the Millennials has begun. The largest generation ever recorded in human history is expected to take over the global consumer market in the years just ahead. Asian Millennials currently represent 45 percent of the overall population of that region, and by 2020 it is expected that 60 percent of all Millennials will live in Asia. Having in mind that this region is one of the most important economic centers in the world, how will this generational shift affect the global market, and will Asian companies continue to grow or will the unusual lifestyle that Millennials promote have a negative impact on Asia’s development?
The Millennials generation has been in the spotlight for years now; it has been studied, researched, and surveyed more than any previous generation. And the results have shown that young adults born between the 1980s and early 2000 (as most scholars define Millennials, give or take a few years) are changing social norms and fighting the stereotypes when it comes to their lifestyles, careers, education, etc. Keeping in mind that this generation is truly extraordinary, one must ask how the shift between generations that is bound to happen in the next decade, if not sooner, will affect the global market, which sectors are going to feel the positive impact of Millennials taking over the Global Consumer Market, and which sectors are endangered?
When it comes to this generation, Chinese and Indian Millennials are the ones that everybody needs to watch. Their average incomes are already increasing, and they are expected to take the lead as the biggest consumers of tomorrow. Global investment bank Goldman Sachs has published a report in which they state that Chinese Millennials number 415 million young people, which is more than the entire working population of Western Europe and the US combined. The only group larger than this one is the Indian Millennials, which today number around 440 million young people. Having these numbers in mind, it is clear that these large groups are going to determine which sectors are going to progress and which ones are going to crash in the years to come.
So what are the spending habits of Asian Millennials?
First let’s see how the market perceives this large demographic. According to APEX: “Asian Millennials are moneyed, educated, technologically proficient, socially united – and a little bit spoiled.” According to the experts, Asian Millennials do differ from Millennials in other parts of the world, mainly because they are more tech-savvy while Millennials elsewhere are more technology dependent. Despite this fact, and the countless studies about the number of times young adults use their smartphones during the day, a clear addiction to the digital world does not mean that companies will have an easy time selling their products to this target group. Posting ads on social media and other popular websites does not guarantee success in the future. Mainly because Millennials – and this is not a regional but a general characteristic of this demographic – are very cautious when it comes to spending. This generation is known to eat out more often than Baby Boomers, but at the same time Millennials do look for deals, including quality food that is also cheap. In the food industry, the category of fast casual restaurants is expected to blossom with this generation. Fast casual restaurants represent a good balance between price and quality while at the same time keeping food visually attractive for the inevitable social media posts.
A rational way of thinking about their finances has also influenced this generation’s decisions about homeownership. While their average incomes have the tendency to grow, young adults in Asia are not so eager to leave their parents’ homes. A CBRE survey of 5 000 participants – Millennials from the Asia-Pacific region – showed that 63 per cent of them still live with their parents. If you keep in mind that it takes an average of 25 years to pay off a house in Beijing – you can see why living at home with mom and dad sounds awesome.
Now if you have decided not to invest your money in homeownership and your paycheck keeps getting bigger, how are you going to spend that money? If you are an Asian Millennial, your priorities are leisure activities and shopping. Traveling is the number one priority. Even this industry, although it is bound to be more successful every year, will have to make some changes because Millennials are not too interested in the traditional travel arrangements. “Agility Research”, a market research firm, has conducted a survey in which 900 Millennials from China, India, Hong Kong, Singapore, Malaysia, and South Korea participated. The results showed that 77 percent of those surveyed would choose destinations that offer new activities and experiences, 61 percent stated that they want a custom experience, while only 38 percent preferred an organized, traditional group tour.
Asian Millennials are bound to change consumer market trends globally, so let’s hope that companies will be able to follow the fast way of living and advancing that this demographic represents.
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