Passion, fashion, curiosity and imagination…There are many words we can use to label today’s youth, but there’s only one that is closely connected with young people throughout history – "future".

According to the statistical data released by the National Bureau of Statistics, Z-Gen, a demographic cohort of approximately 260 million people born between 1995 and 2009, representing about 19% of the total population in 2018, with 99.45 million born between 1995 and 1999, 83.12 million between 2000 and 2004 and 79.95 million between 2005 and 2009 (Excluding Hong Kong, Macau, Taiwan and Overseas Countries).

What impact will the changes in the youth’s decisions and preferences have on future market dynamics? What major trends will we see in Z-Gen’s consumption of cosmetics? What can color cosmetics brands do to win their hearts?

To better understand these young people, Tencent News & Penguin Intelligence, together with products such as QQ, Qzone, and QQ Kandian, released the 2019 White Paper on the Spending Power of Z-Gen. Based on young people’s product-related behavior data and research data and by studying Z-Gen netizens, it provides insights into the young population of 260 million as well as their current and future consumption trends.

PART 1: Z-Gen’s Brand Consumption

1. Nearly 40% of the Z-Gen females spend more than RMB 2,000 on cosmetics per year.

It's obvious that Z-Gen female netizens spend significantly more than males on fashion and cosmetics. 92.4% of the Z-Gen females surveyed buy cosmetics, and nearly 40% of them spend more than RMB 2,000 per year. Of the males purchasing cosmetics, most only spend less than RMB 1,000 per year. 

2. Most important considerations for cosmetics purchase decisions: safety and experience .

In making cosmetics purchase decisions, safety and user experience are Z-Gen’s top considerations. In addition, 46.4% of the females surveyed also attach importance to the essence ingredients of cosmetics. Generally, females spend more on cosmetics, and demonstrate a far higher demand for product quality.

3. Cosmetics brands most preferred by consumers.

Z-Gen females purchasing M.A.C and Innisfree in the past year represent around 30% respectively. Consumers of L'Oréal, Dior, Shiseido, Estee Lauder and Maybelline constitutes more than 20% respectively. For Z-Gen males, three most purchased brands are L'Oréal, Dior and Shiseido, of which L'Oréal consumers make up 18.4%, a percentage much higher than those of other brand users.

4. Luxury cosmetics brands are the most hotly discussed, and domestic brands are on the rise.

Luxury brands with higher prices appear more frequently in QQ groups. On social platforms or online forums, Z-Gen show great interest in discussing top cosmetics brands. 

From posts in QZone, the top 5 mentioned by males aged from 18 to 25 are all luxury brands. It’s evident that males use and understand cosmetics much less than females, and that premium brands are normally what they are exposed to first.  “Gifting” is one of the reasons for purchasing cosmetics, as can be seen from what they share and discuss on social platforms. 

In addition to luxury brands from Europe and America, domestic brands are also sparking discussions by young females online. It’s apparent that females aged 18 to 25 talk about a far more comprehensive range of brands. 

PART 2: Z-Gen’s Purchase Preferences

1. Cosmetics are must-buy items for Z-Gen females.

Except for housing expenditures, Z-Gen spend most on dining every month. “Eating” tops Z-Gen’s list of expenditures, followed by apparel and social media.  .

Cosmetics are another important purchase for females. An average Z-Gen female spends approximately RMB 272.6 on cosmetics per month. 

2. The impulsive consumption is OUT and the consumption tends to be rational.

22.6% of the Z-Gen said that they have not had any non-essential consumption at present. More than half of the Z-Gen think that their monthly non-essential consumption accounts for 1%-20% of total expenditures, and only 13.4% said that their non-essential consumption has reached more than 30%.

On the whole, the consumption of the Z-Gen is more rational, and the average non-essential consumption ratio is maintained at a lower level.

3. Timeless products are preferred, and external packages are an extra plus.

Of the Z-Gen members, 69.3% say that they prefer classic products. 15.7% of the Z-Gen members surveyed say that the external package of a product is also important, which can be regarded as an extra plus.

4. Channels from which people can learn about brands: recommendations from friends, and online advertisements

Of all the channels from which people can learn about brands, recommendations from friends and online advertisements through APPs and search engines ranked the top 2, with respectively 55.1% and 47.4% of the Z-Gen members surveyed picking them. Advertisements in stores, TV commercials, and news are also important channels for more than 40% of the Z-Gen members surveyed.

Celebrities, online KOLs, magazines and ads on WeChat Moments are preferred by female consumers.

5. Nearly 40% of the Z-Gen consumers buy second-hand products.

37.4% of the Z-Gen consumers buy second-hand products. Most of the Z-Gen consumers interested in second-hand products prefer to products whose condition is at least fairly good, and only 8.1% are okay with products of poorer condition.

6. Payment on account or in installments is an important means of payment for Z-Gen.

59.5% of the Z-Gen consumers surveyed says that they normally don’t buy products that are beyond their purchase power, while about 40% say that they have made purchases on credit.

For the Z-Gen consumers living beyond their means, using platforms such as fun.alipay and baitiao.jd for payment on account is the most common means, while payment in installments is the second most favored form.