Young in smaller cities fuel spending

18-35 demographic offers huge market potential

Since childhood, Dong Yichao dreamed of learning to fly and getting a private pilot's license, and he has gone to great lengths to realize his ambition.

Dong, 31, a civil servant in Huaiyu, a village in Yushan county, Jiangxi province, has spent nearly all his savings of 250,000 yuan ($37,212) on flying lessons and training.

In addition, every Friday evening, he made the 10-hour journey by train, bus and car for flying lessons at Zhoushan Mount Putuo Airport in Zhejiang province

He did this for a year before being granted a private pilot's license by the Civil Aviation Administration of China in 2017.

"This hobby has brought me so much pleasure, and when I flew a plane on my own for the first time, taking my wife and daughter to appreciate the beautiful scenery of the islands in Zhoushan from the air, all of my efforts seemed worthwhile," he said.

Dong is a so-called small-town youth, defined by the Central Committee of the Communist Youth League of China in a recent report as people from 18 to 35 years old who live in prefecture-level cities, counties and towns.

Although they come from lower-tier centers of population, in recent years small-town youths have been widely considered to be a main driver of the nation's consumption upgrade. Many analysts believe that winning them over means winning the market.

Xing Ziqiang, chief economist with investment bank Morgan Stanley China, said this age group will be a main driver of the consumption upgrade in the next decade, with consumption in third- and fourth-tier cities expected to reach 45 trillion yuan in 2030, compared with 15 trillion yuan in 2017.

There were estimated to be about 112 million small-town youths in China last year, according to mobile internet industry consultancy iiMedia Research.

Chen Ke, a senior partner with global consultancy Roland Berger, said that with lower housing prices in third- and fourth-tier cities, small-town youths have sizable disposable income and are more willing to spend a larger proportion of their income on daily consumption, compared with people of the same ages living in bigger cities.

"They also have an increasing desire to live a better material and spiritual life, are becoming more interested in personal products and are more willing to spend on entertainment and hobbies, as they have more spare time than their peers in big cities," he said.

In recent years, sales in many sectors in lower-tier cities have grown more quickly than in big cities, including clothing, food, beverages and home appliances, Chen added.