Buy now, pay later. More than half of Chinese millennials are said to be quite fond of installment payment even if it is just a small purchase like a hamburger or a movie ticket.
According to the South China Morning Post, the practice of paying by installments has grown in popularity among millennials in China. Most of them reportedly rely on credit for daily consumption items like foods, hygiene kit, and even cosmetics.
The practice of paying by installments was even made easier by several online shopping platforms, such as Fenqile, which allows them to purchase products in installments. For example, a small layer cake can be had for as low as 0.46 yuan per month for three years, or one lipstick for only 1.93 yuan ($0.3 cents) per month for two years.
Fenqile - a Shenzhen-based online shopping platform operated by Lexin - already had 29.2 million registered users as of June this year. 95 percent of its users are said to be under 30 years old.
"Paying by instalment is becoming a habit among young Chinese [born after 1990]," Xiao, who took the Shenzhen-based Lexin public on Nasdaq last year told the news outlet. "They prefer instalments because they are more interested in trying innovative things [and] don't have much money, but are still very optimistic about the future," he explained.
Xiao, 35, went on to attribute his success to keeping on top of social trends in China. He, then, recounted how it all started - while he was still working for Tencent, a multinational conglomerate company in China, he noticed that the ratio of people who pay after ordering on various e-commerce platforms was low.
However, it did not equate to weak consumption demand. Rather, the demand was strong because shoppers would repeatedly place the same order but then cancel. At that point, he realized that a lot of people want to buy the products, but cannot afford to pay for them in full immediately. He added, "Instalment payments can solve the problem."
Despite the e-commerce platform's tremendous popularity across China, Xiao is less concerned with growing the size of the business. He said: "What worries me more is how to keep management effective [when the company is bigger] and how to adapt to industry developments... At the very early stages of company, development management was an easy job because everyone had a clear target - getting listed."
