There are about 200 million Chinese between the age of 15 and 24, accounting for about 15% of the population. As digital natives, those born after 1990 and especially those born after 2000 have grown up with internet and have formed a unique shopping habits online.

QuestMobile, a Chinese data research firm, recently released a report on the rising consumption power of the country’s post-00s generation (in Chinese), which refers to those who were born in the 2000s. They are now between 10 and 17 years old. With the first batch of these teenagers heading to college, retailers must be more aware of the potential business opportunities brought by catering to the young Chinese. Here are some highlights from the report.

Growing number of young mobile users

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China has over 1 billion mobile devices, and the post-00s generation has 8.1% of them, meaning there are about 85 million devices being used by these tweens and teenagers. The 10-17 age group accounted for 7.5% of the entire mobile population in March 2016 and gradually increased to 8.1% by June 2017.

However, their time spent on mobiles is less than the national average by three hours a month, given that classes and homework still occupy most of their time.

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In terms of market penetration rate based on business type, messaging apps, video streaming, and music streaming apps are the most common on young users’ phones. It’s also worth noting that apps for K-12 education (kindergarten through to grade 12, the final year of high school), gaming, and camera apps are also popular among the young cohort.

The post-00s generation spends the most mobile time on messaging apps, clocking up 61.3 hours a month, nearly 1.6 times the average.

Education apps prevailing among young Chinese

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Chinese teenagers spend 24.2 minutes per day on online education apps, with Baidu-backed Zuoyebang (作业帮, literally “homework help”) topping the chart with a 19.7% penetration rate. Xiaoyuansouti (小猿搜题, literally “a little ape searching for exam questions”), another top K-12 app, came in second in market penetration with 10.3% penetration rate.

The online education sector has also been benefiting from live streaming, which has transformed how the nation’s K-12 students receive their after-school tutoring.

We should also keep our eye on apps that help students pick their college majors, such as EWT360 (开学e网通). Although the app only came in at number 10 on the market penetration chart, it is likely to become more popular and come in handy when these teenagers are preparing for the gaokao, China’s college entrance examination.

Social networking apps still dominate the market

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Teenagers have a strong need for mobile social networking. The data shows that the group opens these apps nearly 42 times a day, with usage totaling about 140 minutes per day.

The top three social networking apps all hold penetration rates of over 50%, with WeChat topping the chart with 81.5%, followed by QQ and Weibo.

It’s worth noting that the apps for fans of celebrities are something that young Chinese are also after. IDOL (爱豆), an app catering to fans that provides news, videos, and live streaming of the idols’ activities, has won over teenagers with its TGI (Target Group Index) exceeding 400 where 100 is the average.

Video streaming shows a niche market on the rise

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While iQiyi, Tencent, and Youku remain the top three go-to platforms for videos, Bilibili, a spiritual home for Chinese fans of ACG (anime, comics and games—a sort of subculture in East Asia), sees a 16.1% penetration rate. The Chinese teenagers’ love for Bilibili, more widely known as “B Station” (B站 in Chinese), shows that the businesses surrounding the underground anime fan culture have huge potential to thrive.

Also, the post-00s are showing their consumption leanings toward short videos, with Douyin, Meipai, and Miaopai coming in the top 10 for penetration rate. This shows that personalized and fragmented content is catching their eye.

Aside from the post-00s generation, the post-95s (1995) are another group that can bring in huge sums of revenue. China Tech Insights (CTI) along with Penguin Intelligence, backed by Tencent, earlier this month released a consumer report on the portraits of the post-95s.

It suggests that the young cohort, who are between 18 and 22 years of age, will become a major consumption power in the next five to 10 years when they enter the job market.

In comparison with previous generations, the post-95s generation was raised in a more affluent era. From 1995 to 1999, when the post-95s were born, the nation’s per capita disposable income surpassed RMB 5,000, which is seven times that of post-80s and twice that of post-90s incomes, according to the report.

New video ads strategy

As the post-95s pay more attention to films and TV shows where their favorite stars appear, they are more likely to skip over video content that they’re not interested in, the CTI report shows.

This can make product placement even harder, but leads to a new pattern of advertising—powered by big data and floating layer technology, a new technology for advertising that could place ads in sections that are most frequently watched.

Preference for online banking over traditional

As digital natives, the post-95s generation prefers to manage their finances online. Fintech products cater more and more to the new generation’s taste, as they are used to online shopping and making online payments, the CTI report says.

“They are more emotional (in terms of buying) and less concerned with being frugal,” wrote Jeffrey Towson, a private equity investor and Peking University professor, on his blog. “They buy clothes and furniture based on how it makes them feel—and how they want to see themselves,” he wrote.

Indeed, the shopping pattern of China’s millennials is a lot different than the previous generations’. “They are really confident about their own financial futures,” suggested Towson in his blog post.

Taobao, China’s dominant online marketplace run by Alibaba, retrieved data from its site and in May released a data report on the “empty nest youth,” referring to those who are single, living alone, and between the age of 20 to 39.

Young Taobao shoppers are most active around 10 p.m. (Image credit: Taobao)

Young Taobao shoppers are most active around 10 p.m. (Image credit: Taobao)

The report shows that these youngsters mostly live in Shenzhen, Beijing, Guangzhou, and Shanghai. They love to shop online late at night, mostly around 10 pm and are willing to spend nearly RMB 5,000 annually on Taobao, which is pretty much the amount they earn a month, according to the report.

All these various reports are showing something in common, something obvious yet essential to run businesses tailored to China’s millennials—you have to go online.