16 September 2019
The SNH48 girl group has skyrocketed to fame on the mainland, earning millions for its backers from young people with spending power. Photo: internet
The SNH48 girl group has skyrocketed to fame on the mainland, earning millions for its backers from young people with spending power. Photo: internet

Success of SNH48 girl group sheds light on new Chinese economy

Economic data paints a gloomy picture of the outlook for China’s economic growth.

However, the skyrocketing rise to fame of an “idol” girl group, SNH48, demonstrates the astonishing buying power of the post-90s, the generation born after 1990.

It could indicate where solutions may lie for the economy’s declining growth.

SNH48 is the sister group in mainland China of Japan’s AKB48.

Established three years ago, SNH48 has 75 members, who are all part of the post-90s generation. 

The average age of their fans is about 20, and 60 percent of them are young men.

The group holds a “general election” to choose the most popular idol each year, and fans have to pay to vote.

They can vote more if they buy more votes.

Some fans spend tens of thousands of yuan to vote for their idol.

The first general election generated more than 10 million yuan (US$1.57 million), excluding revenue from related products like T-shirts and handkerchiefs.

The phenomenon has injected some fresh hope into China’s lackluster economic landscape.

Investors believe they can get back 10 times what they invested in the idol group.

The emerging young Chinese consumers have five characteristics.

First, they cannot keep their hands off their smartphones and spend a lot of their time shopping online.

Second, they are eager to express their own personality when buying products.

Third, they value taste and favor meaningful products and stories.

Fourth, they readily use credit cards to buy something they like.

Fifth, they are willing to live from paycheck to paycheck to enjoy quality of life.

Unlike their parents, the post-90s will spend all they have or even borrow from others to satisfy their desires.

They prefer to use leverage when investing in stocks, in the hope of making a fortune.

By contrast, their parents prefer to save and budget for their spending.

The post-90s might unleash vast buying power in the next decade as they enter the peak period of their careers and buying capacity between the ages of 21 and 30.

Online shopping is a favorite pastime.

Alibaba’s Singles Day shopping promotion took in over 10 billion yuan in the first 13 minutes.

The post-90s spend a total of 24 billion yuan in online shopping per month, a report released by comScore said.

On their shopping lists are clothes, cosmetics and mobile phones, the report said.

There are 140 million people in China’s post-90s generation, making up 11.7 percent of the total population.

They account for 26 percent of the country’s online shoppers. 

Their voracious appetite for spending online has driven the rallies in the stock prices of e-commerce leaders Alibaba Group Holding Ltd. and

Microlending is another sector that has benefited from China’s emerging post-90s shoppers. 

The younger generation borrows money through microlending apps to pay for travel or clubbing and repays by installments.

Tencent Holdings (00700.HK) has positioned itself well for this group of target consumers, through WeBank and social network platforms like WeChat and QQ.

The internet giant has achieved a 165 times return with dividends on the stock market over the last decade. How about the next?

Internet technology stocks have become the most sought-after in China’s switch to the new economy.

And it’s very likely that 17 foreign-listed China stocks will be included in two MSCI benchmarks this Friday, including Alibaba, Baidu Inc. and Qihoo 360 Technology Co. Ltd.

The move could attract US$7 billion from passive funds into these stocks.

This article appeared in the Hong Kong Economic Journal on Nov. 12.

Translation by Julie Zhu

[Chinese version中文版]

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HKEJ columnist