A new report by Thunes* highlights how the world’s youngest and most digitally-adept consumers are forcing changes in business practice. Underlines finds out more about the research focussed on how Gen Z handles and spends their money which was conducted across 13 developed and emerging countries.
So why is Generation Z so important? Reams has already been written about this generation, their social and buying habits and the consequences for businesses and brands in all sectors. What we found interesting about this report is a widening of the scope from reports primarily focussed on Western developed economies to research encompassing emerging markets. Nine in 10 ‘zoomers’ live in emerging markets but what they have in common is that they have grown up entirely in the age of the internet. Living their lives online they expect the brands with which they interact to accommodate that. So why should we care so much? This group represents the largest population group on earth accounting for almost 2.5 billion people (surpassing Millennials in 2019).
Key findings:
Social media consumption is part of Gen Z daily life and is increasingly driving their economic activity (7 out of 10 said they have purchased products they discovered on social media such as TikTok, Facebook and Instagram). Not only is this where they spend their money but increasingly where they are making it too!
Paying the Bill – cash is on the decline but still relevant but Gen Z has little time for traditional products such as bank accounts or credit cards (62 didn’t even have one!). In some markets mobile wallets are popular with 50% of zoomers having this type of account and even in developed markets such as USA and UK, Gen Zs are not necessarily following their parents’ preferences.
Shopping – across all markets this generation is currently spending 19% of their money for clothes and electronic goods (more than they do for socialising, eating out and entertainment). With so much shopping taking place online retailers have to be part of the conversation here. Even when it comes to physical retail Gen Zs expect to be offered a broad range of payment options.
Cash is Down, But not Out: About 25% of zoomers in Western markets almost never use cash and even in emerging markets traditionally thought of as cash-based economies, the use of physical current is becoming far less common (money wallets dominating as payment method here).
Brand Trust is the number one factor in both developed and emerging markets, a brand that they know and recognise. User experience comes next – in all, making the right connection with potential users is crucial for any provider seeking to build a customer base of Gen Zs. By contrast pricing and parental recommendation are much less powerful point of competitive differentiation.
Thunes CEO Peter De Caluwe said:
“To many, Gen Z is a misunderstood and overlooked generation. This is a generation to which ‘dial-up’ and ‘desktop’ are meaningless words and who don’t just think ‘mobile-first’, but live and breathe in apps, social media, digital platforms and soon – the metaverse. We should start to take this generation seriously as the revenues and strategic plans of many businesses – especially those that are relying on fast growth – are dependent on them.
We knew that social media would be a key part of a zoomer’s daily life, but what our survey helped to reveal is the extent to which they are driving spending activity in this demographic. Another important aspect of their lives that we wanted to explore is their relationships with money and their affection for mobile-driven payment methods.”
*Thunes is a global B2B Payments Platform which connects mobile wallet providers, banks, technology companies and money transfer operators in more than 100 countries. The research for this report was conducted with 6,500 young adults (16-24 years) in USA, UK, Mexico, Brazil, India, Indonesia, Pakistan, Nigeria, Russia, Kenya, Vietnam, the Philippines and Bangladesh).
