Everyone Rushes for Luxury Goods? "We're Sick of Old Fogeys' Show-Off Spending"... China Turns to Gold Beans [China.zip]

China's Consumer Generational Shift Reshapes Market Leadership
The Lao Deng Economy Crumbles
Value-for-Money and Emotional-Value Markets Grow

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As the main drivers of China's consumer market shift, the market landscape is being reshaped as well. People in their 50s and older, who once prioritized supporting their families and saving, have emerged as major spenders across online and offline channels. The so-called "Lao Deng economy," once a symbol of wealth and authority and associated with older generations' excessive spending, is fading. Young people, by contrast, are increasingly opening their wallets for purchases that prioritize value for money and personal satisfaction rather than consumption meant to impress others.

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The Lao Deng Economy Falters as the Value-for-Money Market Expands

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According to data from Alibaba's Taobao and Tmall, users aged 50 and over accounted for about one-quarter of active users across the platforms in 2025. In particular, those aged 50 to 59 accounted for more than 70% of all orders in the senior consumer market. Global accounting firm PricewaterhouseCoopers (PwC) said that earlier home purchases among these generations, combined with their children's independence, had eased pressure on household finances. This has given them more spending power for themselves, including on travel, hobbies, and leisure. However, some say that the market is overly focused on the economies serving young people and seniors, resulting in a mismatch. Although consumer tastes are shifting toward activities such as independent travel, photography classes, and leisure sports, products on the market are not meeting their expectations.

Young people are turning away from the "Lao Deng economy," once a symbol of wealth and authority. "Lao Deng" originally came from a northern dialect term disparaging middle-aged and older men, but it has recently become a neologism for outdated consumption and investment habits that emphasize showy appearances and formalities and cling to old ways.

Sina Finance recently highlighted this trend, saying, "The generational shift in the consumer market is changing direction." For example, people born between the 1950s and 1970s spent on real estate, luxury cars, famous paintings, cigarettes, and expensive tea, all regarded as symbols of wealth. While people aged 50 and over once focused their spending on retirement, healthcare, and caregiving, they are now venturing into areas more commonly associated with younger people, such as gyms, travel, and hobby experiences.

The Luxury Market Fades as Value-for-Money and Value-for-Satisfaction Markets Rise 

Real estate, luxury cars, jewelry, luxury watches, expensive traditional tea, and premium cigarettes and alcohol, which once supported the Lao Deng economy, have all recently taken a hit. Real estate prices have fallen 20% to 30%, while stocks of traditional Pu'er tea that once commanded prices of tens of millions of yuan have piled up. Luxury watch prices have fallen by about 30%, including watches that once required buyers to pay a 100,000-yuan premium to obtain. Sales of luxury cars, including Mercedes-Benz and BMW, have also halved. Moutai, once a staple of business dinners, has lost stature as more young people reject drinking culture.

Young people, by contrast, are investing in safe-haven assets such as gold bars and gold beans. They are also spending on concerts, travel, and dining out rather than company dinners or meetups with friends. They are also prioritizing products that offer value for money and value for emotional satisfaction. In a survey by JD.com's Consumer Research Institute, 82.4% of young consumers named value for money as their top purchasing criterion. A Bain & Company report also found that China's luxury market contracted by 3% to 5%, with leather goods and watches, where conspicuous logo display is common, recording the steepest declines.

Local experts expect these changes in consumption to accelerate further around 2035. According to analysis, by 2035, people born in the 1980s will have finished paying off their mortgages and their children will have reached adulthood, creating about 1.31 trillion yuan (261.9607 trillion won) in available cash flow. Even if only 30% of that is spent, it is expected to open up a new consumer market worth about 364 billion yuan (72.7854 trillion won) a year.

This content was produced with the assistance of AI translation services.