China's youth unemployment hits a new high again; Popmart gets a sales boost from "lipstick effect" – Charts of the Week
China's youth unemployment hits a new high again; Popmart gets a sales boost from "lipstick effect" – Charts of the Week
The latest updates on employment, e-commerce (Tmall, JD, Douyin, Kuaishou), Popmart's the "lipstick effect", and the real estate market in 9 charts.
"Charts of the Week" is Baiguan's series that features key data points to help you quickly grasp the general state of affairs in China in just a few minutes. We handpick the highlights of the data charts from a variety of sources, analyzing and delivering insights trusted by 100+ top institutional and corporate clients worldwide at BigOne Lab. Don't forget to subscribe before you continue reading!
Youth unemployment
China's revised youth unemployment rate for the 16-24 age group, excluding students, rose to 18.8% in August, marking a new record high, as China's largest class of college graduates—11.8 million students—entered the weak job market this summer. The unemployment rate for the 25-29 age group, excluding current students, also rose to 6.9% in August, up from 6.5% in July.
The new method for calculating the youth unemployment rate was introduced to more closely reflect the reality of youth unemployment, after Beijing suspended the release of old youth unemployment data in July last year, when it reached a record high of 21.3%.
Across the major online recruitment platforms, we saw a slight month-on-month improvements of the job postings for the youth.
Food delivery workers in Beijing increased by 49.7% in the first half of 2024, as many sought "flexible employment" in a competitive job market
Youth unemployment is a complex issue. On one hand, the overly competitive job market makes it hard for young people to find jobs.
The dining, catering, delivery, and ride-hailing sectors, which host many "flexible employment" workers (灵活就业) after COVID, are now becoming increasingly saturated.
According to the Beijing Statistics Bureau, the total profit of the dining industry in Beijing with annual revenues over 10 million yuan fell to 180 million yuan, a year-on-year decrease of 88.8%, with profits dropping to just 0.37%. However, the number of food delivery and takeaway workers in Beijing grew by 49.7% in the first half of the year, as many workers rushed into food delivery for "flexible employment" as the job market became more competitive.
The profit is also shrinking. Among major food and beverage chains in China, apart from Yum China (NYSE: YUMC), which recorded a 2.67% year-on-year increase in net income in the first half of 2024, many other companies showed a decrease. For instance, Nayuki (2150.HK) decreased by -798%, Jiumaojiu (9922.HK) by -69.8%, Luckin Coffee (OTCMKTS: LKNCY) by -50%, and Ajisen China (0538.HK) by -84.9%.
The mismatched salary outlook and work intensity
On the other hand, the 996 overtime culture (working 9 a.m. to 6 p.m., 6 days a week) and stagnant salary growth lead some young workers to 'willingly' opt out of work, finding the pay unsatisfactory.
Across online recruitment platforms we track at BigOne Lab, the average salary for various industries has remained stagnant, with some showing different levels of decrease. After the salary cuts in financial services, the utilities, heavy industrial (mineral extraction, smelting, and processing), and scientific research industries are showing slowing salary growth in recent months.
Notably, the heavy industry and utilities industry primarily consist of the state-owned mega corporation. This could indicate signs that the wave of salary cuts could now be spreading to SEOs.
Unlike their parents' generation, who believed hard work meant giving everything without resisting overtime, or workers in their 30s and 40s burdened by family and mortgages, many young Chinese in their 20s are adopting a different mindset. They prefer a minimal lifestyle over career ambition, exploring interests, or returning to hometowns in lower-tier cities or suburbs, where they receive more support from the family the cost of living is more affordable. (I plan to write an in-depth piece on the mindset and struggles of young Chinese in today’s job market soon. Please subscribe if interested!)
Popmart gets a sales boost from the "lipstick effect"
Amid a weak salary growth outlook, lipstick shopping is nevertheless gaining traction in China.
Lottery sales in China from January to July reached new highs, increasing 12.5% from the previous year.
Despite the overall "consumption downgrade" mindset and cautious outlook among consumers, some companies like Popmart and Miniso, which produce "lipstick effect" products (affordable items that offer emotional value), are gaining traction.
Popmart (9992.HK) has gained 144% year-to-date, boosted by lipstick purchases and strong overseas sales.
Continue reading to get our proprietary data on Popmart (social sentiment, estimated offline sales from our in-store mobile payment data), the latest gross merchandise sales from e-commerce platforms (JD, Tmall, Douyin), and insights into the real estate market.
To get a sense of what is offered, you are welcome to check out this older post in the same series: Charts of the Week. You can also get free access by sharing us.
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