China’s consumers are becoming more cost-sensitive, and that means a profound change in the country’s retail, says business analyst Shaun Rein at CNBC. “The name of the game for Chinese youth in 2024 is trading down. Instead of Starbucks, youth are buying Luckin coffee,” Rein says.
CNBC:
Chinese young people are increasingly shopping and dining at the basement units of malls, a trend the social media has labeled the “B1B2” economy.
The basement floors — B1, B2 — typically house low-cost gift and souvenir shops, apparel outlets, the supermarket, and other relatively affordable consumer product stores like Miniso and Luckin Coffee.
“Landlords try to put anchor tenants like LV, Apple or Starbucks on pricier real estate on the ground or first floor,” says Shaun Rein, managing director of China Market Research Group. Historically, higher-end shops have attracted more footfall, but China’s weak economy means the cheaper brands are now drawing the crowds, he adds.
The hashtag ”#Young people only go shopping at B1B2″ has been trending recently on Chinese social media platform Weibo.
The reply to a Weibo user’s post on how she and her peers usually go straight to the basement floors for shopping captures the mood of the Chinese youth: “Everything we can afford is underground!”
Anything not in the basement floors is considered to be “in heaven,” signaling it’s out of reach.
“The name of the game for Chinese youth in 2024 is trading down. Instead of Starbucks, youth are buying Luckin coffee,” Rein says.
Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.
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