China's youth shift toward rental economy challenges consumption stimulus

Younger consumers in China are increasingly adopting a ‘rent instead of buy’ lifestyle, posing a challenge to government efforts to stimulate domestic consumption. This trend is particularly evident in the rental of digital devices, outdoor equipment, luxury bags, and wedding dresses.

Data indicates a significant shift in behavior. A survey of Chinese youth showed that 77.3% have experienced renting instead of purchasing, with the ‘post-00s’ generation reaching 82.2%. On platforms like Meituan, searches for camera rentals rose by 67%, while drone rental searches increased more than tenfold. The rental economy in China reached a scale of over 4.2 trillion yuan in 2024, a 32% year-on-year increase.

This shift occurs as China’s retail growth slows, with social consumer goods retail sales increasing by only 0.6% in July. While the government has implemented policies such as trade-in programs and interest subsidies for personal loans to boost spending, the preference for renting over owning may limit the effectiveness of these measures. Analysts suggest that factors such as weak housing demand, falling property values, and a soft labor market are contributing to more cautious consumer spending.