By Suzanne McGee, MSN MoneyThe face of China's "Rare Generation" might look something like Li Yuchun, the 2005 winner of an "American Idol"-type singing competition dubbed, improbably, "Mongolian Cow Sour Yogurt Super Girl's Voice."
It wasn't Li Yuchun's voice that drew the largest number of television viewers on record in China. It was her attitude, which was something new. She didn't wear makeup, dressed in baggy, androgynous clothing, sang Western songs -- and romped to victory, with 3.5 million viewers casting mobile-phone text votes for her in the grand finale.
The Chinese fans who cast their votes for Li -- and who still throng her performances -- are members of a new breed in China. In their teens and 20s and making a sharp break from the culture of their parents, the members of China's "youthquake" are ambitious, energetic, modern and individualistic -- at least up to a point. 
Video: What makes them different?
Democracy? Fine when they are voting for a singing idol, but otherwise a distraction from the main business of life: snagging a great, creative new job. Consumer choice? They have no recollection of the days when navy blue cotton jackets and trousers were the de facto national uniform, or when Coca-Cola and McDonald's weren't available.
Li "symbolically reflected everything new about a new generation of Chinese consumers that is going to become a vital force in the economy," says Robbie Blinkoff, principal anthropologist at Baltimore-based Context-Based Research Group, who spent several months in China studying Chinese consumers for his commercial clients. "She had a short haircut, wore jeans, and when the judges got upset and criticized the fact she wasn't singing traditional Chinese songs, there was an outpouring of criticism from viewers complaining that the criticism was unfair. That's the new China." Video: A unique style
Born after China opened to the West and experiments in capitalism began, the biggest Me Generation ever known has few memories of political strife or turmoil. In their experience, each successive year has brought more prosperity, more personal and professional options and an ever-wider array of consumer choices.
"You can't call them Generation X or Generation Y, because they aren't Western; they are different from the Hong Kong or Taiwanese Chinese," says P.T. Black, a partner at Shanghai-based Jigsaw International, a marketing venture. "They are a very different group than their predecessors; they are very optimistic and positive. We call them the Rare Generation, because they are so different from any other generation we have seen."
Creativity, national pride, optimism, energy -- these are just some of the attributes of China's younger consumers. These are the traits that will reshape the rapidly expanding market for consumer goods in China, whether the product in question is a Li Yuchun CD or a new cell phone. Chart: Cell phone ownership growth
"The Rare Generation, unlike their elders, isn't crazy about status-oriented brands," says Black. "Before, you could launch an ad and say, this item is what the cool kids have." Now, he explains, Western and Chinese companies alike have to think more creatively. Brands like Marc Jacobs, Columbia Sportswear and assorted urban-culture brands (think skateboarding) have been successful.
"They don't try to be all things to all people," Black says of the marketers. "They don't try to say, 'By buying and carrying my kind of product, you are going to be the coolest person in the country'; they say you will be like this kind of person. It becomes much more of a peer-based marketing and image."
Getting it right with this group will be crucial to the future of consumer brands. By 2015, there will be 500 million of these young Chinese -- equivalent to the entire projected population of the European Union,
and close to double the U.S. population -- according to calculations by Merrill Lynch strategist Joan Zheng. By then, the youth contingent will make up 36% of the population of China, compared with 24% today, and income levels and purchasing power will keep pace.
In contrast to their parents, these new consumers have no instinctive aversion to debt or borrowing: increasingly, they realize that a mortgage is the only way they will ever manage the most important consumption decision of all -- the purchase of an apartment. This new attitude has spilled over into a greater acceptance of bank cards, which still represent a measly but rapidly growing 17% of consumer purchases. Construction Bank of China, for instance, has teamed up with Chinese universities to promote credit cards to the young campus population.
Those who study the shifting sands of the Chinese consumer landscape believe that as long as China's one-child-per-family policy remains in force, developing products aimed at relatively affluent young consumers is likely to be a winning strategy.
"This is the 'have' generation, the single children who carry the expectations of their whole family with them and who are going be groomed from an early age to compete and win," says Jixun Foo, a Shanghai-based
partner at Granite Global Ventures, a venture-capital firm. Video: Only the best will do
All that attention has spoiled a lot of preteens: These "Little Emperors" can study anything from golf to violin from kindergarten on, and are accustomed to having their whims indulged. Such overindulgence has a cost -- witness the nationwide debate over childhood obesity, for instance, or the new pressure to perform. Many parents now fork over their hard-earned (and still scarce) cash for English tuition and special "backboards" to guard their children against posture damage from the big bookbags they lug around.
"In this new kind of capitalist society, people today are not equal," Foo says. "So instead of the hardships of previous generations, the younger people today are more likely to feel pressure to perform and to be among the winners."
Son Ke, founder of Taihe Rye, one of China's biggest music producers, served as a judge for the "Super Girl" competition, and has since signed Li Yuchun to a recording contract.
"Like Simon and Randy!" he says of his "Idol" role models, adding, "I wanted to learn from young people about music and life, and learned a lot from seeing how fans, no matter how late it was or how cold,
they waited to see their idols and wanted their own choice." Music: China's top pop songs
Son sees youth culture evolving even more rapidly than in North America, with Chinese-style hip-hop and indie rock edging their way onto the landscape. The Rare Generation's emphasis on individuality and creativity is something he thinks outsiders often miss. Using a Taihe Rye-produced tune as a base, "they will re-compose the songs, write new lyrics and perform them as karaoke," Son explains. "Young consumers have personality and attitude and they are drawn to a product or artist that has personality that represents their own unique feelings. I am still learning about how they think."
The quest to be distinctive in a crowd of 1.3 billion citizens has taken younger Chinese in unexpected directions. A report published last fall by Beijing-based Horizon Research Consultancy showed that for urban 20-somethings, being "fashionable" could mean consuming anything from black chocolate to coffee, becoming a vegetarian, going backpacking, or shunning the glitzy apartment buildings their parents buy in favor of an old (or old-style) courtyard house.
In Shanghai, fashionable youngsters can snap up jeans and faux fur jackets on one level of a store
"369 Free Life" -- and then nip upstairs for a tattoo.
Black sees an entirely new "China Style" emerging among these consumers. They want access to the best the world can offer -- and they want it on their own terms. "This is a group that has grown up as China's importance and clout in the world have become unmistakable, and they have a great deal of national pride," he explains. The result? Fusion trends, in which recording artists combine hip-hop with Beijing opera, or Chinese designers tweak Western garb with Chinese design elements. Video: Rapping over opera?
Black emphasizes that, although many members of the Rare Generation seem spoiled, they are not far removed from the privation of the Chinese countryside. Their attitudes are complex, he says, and keeping up with them "is keeping a lot of people up at night."
"It's easy to be new and fresh; it's easy to be an established brand. But right now, a lot of (companies) are in the middle, where life is very hard. You have to prove yourself over and over again to one of the most demanding market groups out there: Chinese youth." Chart: Chinese stocks to watch
Produced by Anh Ly
Graphics by Joe Farro and Hakan Isik
Published June 29, 2007
High