They are smart, rich, global, digitally switched on, ready to engage and spend, and there are hundreds of millions of them – meet the Chinese millennials. According to banking giants Goldman Sachs they are the most influential generation on the planet today and there are many reasons for smart Australian businesses to get on board – now and for the future.
Businesses need to include Chinese millennials into their strategies to tap into their fast-growing consumer power across a range of products and services. China is on the cusp of becoming not only the world’s largest economy, but also the biggest investor in research and development, and an innovation leader.
With recent news that China is struggling to handle volatility and although this will fundamentally disrupt the business-as-usual approach from small-to-medium enterprises to multinationals in terms of consumer demands, talent acquisition and the rate of innovation required to keep pace with trends.
Former Co-Chief operating officer of Goldman Sachs, Harvey Schwartz thinks otherwise. “The internet which will change everything in China as the penetration rate of cell phones is very high and the 450 million kids, the Millennials, who are 20 to 30 years old.” The Millennials love gadgets, shop online and are entrepreneurial.
Indeed, the services sector accounts for an estimated 50 per cent of the overall economy. Much of the focus by analysts is on China’s Purchasing Managers Index (PMI), which measures activity in manufacturing sector and which makes up 40 per cent of the economy.
There is no doubt China will face more volatility and turbulence as it strives to reform but as Schwartz says the 450 million Millennial’s and what they represent should not be overlooked. “This is the consumer-led economy that will happen. It will be game changing in China over the next 20 years.”
The smart Australian business will engage these groups for what they will become, as well as what they are right now. Chinese international student numbers in Australia top 100,000 each year and comprise China’s bright, connected, ambitious and aspirational millennial leaders, who will one day hold the balance of power in China.
The savvy business will view Chinese millennials not as a cash cow for Australian universities but as a high-yield talent pool to tap into now and with an incredible return within five years, whether they remain in your business or not.
More than a quarter of Chinese millennials hold a university degree compared with 3 per cent of their parents.
Incentives have helped boost the pool of start-up capital in China balloon from $32 billion to $338 billion, making the Chinese government the largest venture capital ‘company’. Now millennials aspire to gain a job at Alibaba, Tencent or any number of the Chinese “unicorn” companies
Businesses that wish to harness Chinese millennials, 94 per cent of whom have a smartphone, must have an integrated China digital strategy, which does not sit as an appendix to business as usual, but rather as a core function. Consumer spending of Chinese millennials is growing at 14 per cent, twice the rate of that of their parents.
The smart business will not mistake Chinese millennials as university students who can’t wait to cruise their way through university. Rather, it will recognise them as customers who may arrive in Australia needing products and services which cater to their needs as a student, homebuyer, investor, entrepreneur, traveller and influencer.