There are 200 million of them and they’re richer than ever. So why aren’t China’s singles doing more for the economy?
With as many single adults as the entire populations of Russia and the UK combined, it’s little wonder companies have spotted the potential to profit from China’s enormous army of young, free-spending singletons.
But despite their numbers, disposable incomes and willingness to spend, it seems the mainland’s unattached adults aren’t contributing as much to the economy as might be expected. In fact, they may actually be harming it, according to some analysts.
I think the growing number of singletons does more harm to the economy than good
China’s swelling ranks of singletons is a relatively new phenomenon brought on by economic development and a profound change in people’s perceptions of remaining unattached. According to the Ministry of Affairs, China’s “unwed” population (those who traditionally would have been married by now in previous generations) reached 200 million by the end of 2015.
“Singles today generally have a higher and rising disposable income, and tend to focus and spend on themselves,” said branding consultant Jacqueline Thng, a partner at Prophet.
According to the latest official data from the National Bureau of Statistics, the average monthly disposable income in China was around 2,395 yuan (US$348) during the first quarter of this year. But data released by e-commerce giant Alibaba last year shows more than half of the country’s single men and women have average monthly disposable income of between 3,000 and 5,000 yuan. And nearly 30 per cent reported having around 5,000 to 8,000 yuan at their disposal every month, with 10 per cent having some 8,000 yuan or more.
World Economic Forum data shows that upper-middle-class consumers who are 35 or younger on average spend 40 per cent more on purchasing, across a range of product categories, than previous generation consumers with similar incomes.
But the higher purchasing power and willingness to spend of single people today isn’t necessarily translating into a positive economic contribution.
“Granted, the single urban professionals are changing overall consumption patterns in China and benefiting businesses in sectors like entertainment and personal care, but I think the growing number of singletons does more harm to the economy than good,” said Dr Ning Zhang at China National Academy of Economic Strategy.
With less responsibilities than their married peers, single people can develop a laid-back attitude which can easily turn into a lack of motivation to work.
“Take Japan for example. More and more young people want to avoid familial responsibility by not getting married. The high unmarried rate in Japan has had a negative impact on the economy,” said Dr Zhang. “Some singletons feel they only need to feed themselves so are not under much pressure to create more wealth for the family.”
The best strategy [for retailers] is not to intentionally make singles feel that they are singled out
Although people are gradually feeling more secure about being on their own, there’s evidence to suggest singles are more insecure about issues like family duty, financial burden and emotional stress compared to married couples.
According to a survey conducted by market research firm Mintel, the purchasing power and average spend of a nuclear family is much higher than a household of one. Couples are more confident in their financial status and stability since they are not the solo income generator in the household.
Singletons often feel pressured to plan a future for themselves, which tends to make them less inclined to buy high-value items, instead opting to invest more in insurance and finance products.
Young parents, on the other hand, are likely to spend a considerable amount on baby-care products and are more willing to splash out on their significant other, which drives domestic consumption.
Even though Chinese singles are not the big spenders one might have imagined, they are still a prime target for retailers and service providers in sectors such as fashion, entertainment, food and travel.
“Married people and single people in China are the same in essence. However, they are more likely to be in different life stages and thus have different life focuses,” said Anila Ma, lifestyle analyst at Mintel.
Without much familial responsibility, singletons naturally tend to focus more on themselves and improving the quality of their own lifestyles. This has made luxury brands more popular among urban singletons, because they can afford them and like to “give themselves a treat” from time to time.
“Luxury brands are symbols of status and seen as better brand experiences – for singles in China, this means more opportunities for affordable luxury and brands in many categories – from beauty and apparel to fine dining and travel,” said Thng. “Everything relating to self-actualisation and external status expression will attract the singles of today.”
However, shopaholic singles today are harder to please as they are more experience-driven than ever before.
Thng said companies should sharpen their brand image, improve overall brand experience and even adopt a more personalised approach to product and services delivery to appeal to the more demanding singletons in China today.
But personalisation can easily slip into discrimination if not approached carefully. Campaign concepts suggesting singles are a different type of person from married people could in fact alienate single people, according to Mintel’s survey.
“Brands should focus on providing services that can equip singles with a sense of security and make them feel protected, cared for, understood and safe – especially in the areas where they have difficulties managing on their own,” said Ma.
“The best strategy is not to intentionally make singles feel that they are singled out.”
