Chinese consumers are increasingly looking to enjoy now, pay later

China’s 90s generation is racking up debt on installment apps.

China’s 90s generation is racking up debt on installment apps. A new report by Ant Financial’s Huabei Credit 花呗 shows that the average user born between 1990 and 1994 is carrying debt 18.5 times their monthly salary. Based on an average wage of RMB 6,917 (USD 1,023) per month, that shakes out to around RMB 120,000 (USD 17,760) per user. 2018 numbers show that one in every four of China’s post-90s consumers is on the platform.

Why it matters

China is bidding farewell to its culture of thrift

A decade ago, the numbers painted a consistent picture of the frugal Chinese consumer. In 2008, China enjoyed a household debt-to-GDP ratio of just 17.8% (CEIC Data), just as the US was hitting an all-time high of 98.6% for the same metric in the same year (which of course was a major contributor to the severity of the Global Financial Crisis that unfolded that year). Similarly, China’s savings rate was one of the highest in the world, with “40 cents of every dollar of disposable income saved,compared to 3 cents of every dollar in the US” (CNN).

Now, though, the pendulum has swung in the other direction, with household debt rising steadily, and hitting 48.9% of GDP in 2017 (compared with 78% in the US that same year). Installment apps aren’t the only driver of the debt increase, of course – traditional credit card issuances is also way up, from around 150,000 in 2009 to over 600,000 in 2018 (CEIC Data).

Brands are collaborating with installment apps to boost sales

In 2017, Michael Kors became the first luxury brand to collaborate with Huabei Credit (Jing Daily):

  • “From August 15 to 18, fans could place pre-order requests on Huabei’s platform, and the credit company froze part of their Huabei money as a deposit to reserve the bag.”
  • “As a result of the exclusive offer and credit payment, Michael Kors saw a boost in sales. Within the first 300 seconds of the start of the promotional event, 150 Selma bags were sold.”

Consumer credit is one key development helping to further unlock the Chinese consumer machine. Brands need to consider installment app partnerships to fully tap into the trend.



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