A global study released today by Checkout.com, a global digital payments company, highlights the consumer buying behaviour which is powering today’s digital economy. The research, conducted across the UK, US, UAE and China, reveals a number of trends, including the growing spending power of Generation Alpha.
Children aged 8-15 years old (Generation Alpha) are driving over a quarter (27 per cent) of their household’s non-essential monthly spend, rising to nearly a third of monthly spend for digital purchases, as 29 per cent of Millennial parents take responsibility for purchasing digital products each month for their children. This comes as digital products and services make up over a fifth (21 per cent) of the average non-essential global household spend.
Generation Alpha’s purchase influence is greatest in online educational resources, which nearly half (47 per cent) of parents purchase for their children, followed by entertainment streaming, purchased by a third (30 per cent) of parents globally.
The study also highlighted several regional trends in parents buying digital goods and services for their children. Over a quarter (28 per cent) of Millennials globally pay for monthly e-gaming services for their children, rising to half (47 per cent) of parents in the UAE. Parental spend on e-gaming is lowest in the US but this is offset by a third (33 per cent) of children in the US making e-gaming purchases independently each month.
Chinese children benefit most from educational purchases, with 59 per cent of Millennial parents in China buying monthly digital educational resources for children under 12, and over 22 per cent purchasing news media subscriptions for them. Meanwhile, parents in the UK spend significantly on online education for their children (39 per cent) and are the most likely to continue to purchase monthly online education for their teenagers.
Apart from being the beneficiaries of their parents’ spending, children are also spending independently in the digital economy:
- A third (33 per cent) of children in the US (aged 8-15 years) commonly make in-app purchases with their pocket money.
- In the UK, 71 per cent of children are making their own purchases for non-essential items by the time they are 15, with cards cited as their preferred payment method.
- 75 per cent of 8-year-olds and 92 per cent of 15-year-olds in the UAE make payments themselves, rather than via a grown-up.
- There’s also a growing trend of children over 13 using Buy Now, Pay Later (BNPL) as a payment method in the US (7 per cent), UAE (11 per cent), and China (19 per cent). This figure is less than 1 per cent in the UK, however.
- In China, 65 per cent of 15-year-olds are taking their purchases into their own hands, with social commerce being their most frequent shopping channel (51 per cent) and QR codes (39 per cent) and digital wallets (39 per cent) their preferred payment methods.
Social commerce is already a major shopping channel in China, with nearly half (46 per cent) of all adult Chinese consumers purchasing via social channels. In the UK (24 per cent), USA (17 per cent) and UAE (23 per cent) this is currently a less common channel amongst adults, however children around the world use social media as the go-to source for finding out about deals on products, with very little regional variation (UK: 48 per cent, US: 57 per cent, China: 56 per cent, UAE: 41 per cent). Further, social commerce is the most common shopping channel, globally, for Gen Zs in all countries, with only just over one-third (35 per cent) of Gen Zs regularly shopping in physical stores.
“It’s clear that Generation Alpha is playing a major role in the digital economy”, said Rory O’Neill, CMO at Checkout.com. “The younger generation is going beyond using social channels for discovery, but actually purchasing through these platforms. We’re seeing this unfold in China, which should always be considered the blueprint for future commerce. “What’s more, businesses need to pay close attention to customer preferences for payment – across all generations – in order to drive growth and loyalty in this fast-changing and competitive market.”
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