China’s generation Z reportedly tend to spend money on luxury goods for more than $7,000 per year (Image credit: South China Morning Post)

Becoming more consumptive, China’s generation Z is addicted to credit

Lifestyle shifts from generation to generation, when people used to think twice before buying luxury products, people nowadays can purchase them without feeling any worries. This current trend mostly happens to generation Z which born from 1995 to 2010.

These growing up consumers have little income and no credit history yet they become more consumptive. When they run out of money, they will look out for credit. Loan lenders, such as banks, peer-to-peer lenders, fintech startup and other mediums which are unregulated are like saviors for generation Z since the credit service providers give easy access for them to apply for credit.

Shocking news coming from the biggest country in the world, a 23-year-old Chinese man, Zeng Jinpeng has debt over 10,000 yuan ($1,500) to a mobile phone app. Jinpeng often to buy food, clothes and travel products via online with a virtual card from Alibaba Group Holding Ltd, Huabei.

Depending only on his monthly allowance of 8,000-yuan from his parents as the source of income, he couldn’t control his spending. When the time to pay back the debt in installments comes, he will borrow again from another credit provider, Jeibei. In the end, his parents had to pay off all his debts.

This overconsumption habit among youngster is causing worry. Zhou Xiaochuan, the former Governor of People’s Bank of China, said in some cases a credit secured by technology can persuade young people to overconsume.

According to a survey, generation Z in China mostly are spoiled by elder since they are the only child in their families. Although currently, the country is in a trade war, they are encouraged about the future causing them to be fearless about their career in the future or international politics.

This generation like to spend more and save less since they don't have any worries, said a partner at OC&C based in Shanghai, Adam Xu.

China’s generation Z reportedly tend to spend money on luxury goods for more than $7,000 per year, even before they reach an age of 21-years-old.

Source: https://www.bloomberg.com/news/articles/2019-07-31/china-s-generation-z-is-hooked-on-credit