What the rise of China’s ‘moonlight clan’ means for luxury

“It’s not about flaunting wealth on social media; it’s about investing in a lifestyle that resonates with my definition of beauty and quality,” says Li Wei, a member of China’s moonlight clan. “I want to live a life surrounded by things that bring me joy and reflect my personal aesthetic.” The terms “moonlight clan” or “moonlight tribe” (月光族) have become widely used across China to refer to people who spend all their disposable income well before payday. Composed of the characters for moon, or month (月) and light/empty (光), the phrase could mean moonlight, but in this case it means empty month. “I want to buy everything and become a member of the moonlight tribe,” wrote netizen Starfish on Weibo. The phenomenon, while not new, has resonated especially with China’s Generation Z, indicating a shift in consumption patterns, with profound implications for the luxury market and brands. Gen Z’s parents in China grew up in a time of economic reforms. They typically value frugality and saving. Their conservative spending habits focused on securing homes and ensuring financial stability, reflecting the uncertainties of their era, when the country moved to a market-oriented model. “My parents saved every penny, fearing rainy days,” says Wei. But among all generations in China, Generation Z exhibits the most rapid increase in spending, according to Bloomberg. Projections indicate their expenditure will rise to $2.4 trillion by 2035, a fourfold increase. In contrast, China’s Gen Z was born into a period of rapid economic growth. This digitally savvy cohort prioritizes experiential spending and self-expression. Gen Z consumers are comparatively more inclined to invest in luxury goods, travel, and technology, and view this type of expenditure as essential to their identity and quality of life. Gen Z consumers in China are reported to purchase 15% of all luxury goods sold in the country. This figure stands in contrast to the global average of 10%. Additionally, their spending represents 13% of their household's total income, a significantly higher proportion than the 4% observed in both the US and Britain. ‘Elder-gnawing’ tribes and ‘ATM slaves’ This shift has not gone unnoticed on social platforms, where the discourse around the moonlight clan and related phenomena like the “elder-gnawing tribe” (啃老族) – those financially dependent on their parents – is frequently discussed. Terms such as “ATM slave” (ATM奴) further illustrate the nuanced interplay of relationships and financial expectations within this context. ATM slave refers to individuals who find themselves financially supporting their partner’s or loved one’s lifestyle, often to the point where it feels like they are being used primarily for their money. This term is often used in the context of romantic relationships, where one partner may excessively spend while relying on the other to cover their expenses, making the latter feel like an ATM machine. Mona on Weibo wrote: “I think the environment in the past was much better than it is now. Then, there were still people scolding the ‘moonlight tribe,’ scolding the ‘elder-gnawing tribe.’ But now nobody’s saying anything anymore, because everyone’s ‘moonlight’ and ‘elder-gnawing.’” China’s Gen Z is facing a challenging employment environment. In April 2023, the youth unemployment rate among 16-to-24-year-olds reached a historic high of 20.4%, approximately four times the overall unemployment rate. In December 2023, China’s youth unemployment rate had seemingly declined to 14.9%, though this was because authorities used a different formula to reach that figure. This adjustment came after the rate peaked at 21.34% in June 2023, following which the publication of these statistics was paused. The resumed reporting in January incorporated a new methodology that omits students from the calculation. What this means for luxury and Gen Z This shift in behavior and attitudes creates both opportunities and challenges for luxury brands. Gen Z’s willingness to allocate a significant portion of their income towards luxury purchases augurs well for brands. But businesses should recalibrate their strategies to cater to this demographic’s tastes, which encompass authenticity, exclusivity, and experiences that resonate on a personal level. Moreover, the market must navigate the complexities of a generation that, despite its spending, is also deeply engaged in the “money saving game” – a social media phenomenon comprising people sharing tips on economizing. This dichotomy of spendthrift habits juxtaposed with a penchant for saving underscores the multifaceted nature of Gen Z consumers. However, the luxury industry must also tread carefully, recognizing the criticisms levied at the moonlight clan and the “strawberry tribe” (草莓族) for their perceived fragility and lack of resilience. These societal perceptions, coupled with the challenges of a fluctuating economy and the pressures of modern living, highlight the need for brands to foster a connection that transcends mere transactional relationships. For luxury brands, understanding the nuanced motivations and aspirations of China’s Gen Z is imperative. Crafting narratives and experiences that resonate with their quest for meaningful, high-quality life experiences can forge deeper brand loyalties. Additionally, incorporating sustainability and social responsibility – values held in high esteem by this cohort – into their brand ethos could further align with Gen Z’s expectations. China’s Gen Z moonlight clan represents a paradigm shift in consumer behavior, driven by a complex interplay of cultural, economic, and technological factors. For the luxury market, this signifies a need for further adaptation and innovation to engage a generation that, while eager to spend, demands authenticity, sustainability, and experiences that affirm their identities in an ever-changing world. “Young people sometimes choose to become part of the moonlight tribe. We choose to pursue a high-quality life and enjoy the happiness of the moment. This consumption concept does not mean that I don’t know how to manage money. It means I’m more willing to spend money on things that make me happy,” Wei says.

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What the rise of China’s ‘moonlight clan’ means for luxury