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Nasdaq-listed fintech company LexinFintech has observed that China’s young consumers are not spending any less as the economic growth slows, especially on domestic brands, according to its annual 618 e-commerce shopping festival.
Sales on its installment e-commerce platform Fenqile surged 60 percent during this year's 618 shopping event and the number of customers increased by 90 percent.
Young consumers are not spending any less despite an economic slowdown and the 150 million Gen Z are increasingly the driving force behind consumption.
Nearly 70 percent of consumers on Fenqile were under 25 during the festival, and domestic brands like Huawei were popular.
Sales of domestic mobile phone brands jumped by 71 percent year on year. Huawei saw a particularly significant rise of 138 percent, eclipsing iPhone’s 65 percent growth, although the latter remained the favorite brand, taking up close to 80 percent mobile phone sales on the platform.
This echoes a Credit Suisse study in 2018 that a generation of consumers is emerging who are more likely to opt for domestic brands.
Digital products, sportswear, and cosmetics were the most popular categories during the festival. The concept of making purchases on an installment basis is seen by young consumers as not just a way to satisfy an urgent need, but as a normal shopping method.
While spending more, they are also spending more rationally than they are usually perceived, with an average monthly repayment of 373 yuan (US$53.9), down by 23 percent compared with a year before.
Lexin analyzes customer behavior and profiles to make targeted recommendations. Attributes like age, gender, educational background, region, and purchasing history are factored in.