Saving money with Yu'e Bao has become a saving habit of the "post-90s". The pandemic has kept many at home in the first half of this year, which helped the young generation to save close to 40 percent more than last year.
The "post-90s" refers to people in their 20s. According to the last data from Yu'e Bao, they started saving and investing their money 10 years ahead of their parents' generation.
And most of them use digital platforms. Among the 700 million Yu'e Bao users, 134 million are "post-90s." There are 174 million "post-90s" in China, which means that about 3 out of every 4 "post-90s" in the country are using Yu'e Bao to save money.
Gao Songya is 29 years old and has worked for three years. She said that because she doesn't have a lot of money left to save every month, Yu'e Bao is the most convenient way to generate interest.
"People like me, I don't make that much money. It's literally YU'E I put in there. I just put what's left of my monthly paycheck. I need the money to be ready to be spent anytime I want. There are times when I want to make a spontaneous purchase, like a bag, or when I want to travel and need to book tickets and hotels. It's convenient, it's all in there. I don't need to go to the bank, I don't need to deal with more people, I don't need to remember any more passwords, I don't need to download another app. It's on Alipay, which I already used before Yu'e Bao," Gao told CGTN.
Yan Yunli, another 29-year-old, also uses Yu'e Bao for its convenience, even though its returns have gone down a lot in the past years.
"I started using Yu'e Bao when I was a postgraduate student around six years ago. The seven-day annualized yield was higher at that time, more than two percent. Now it's only at 1.4 percent," Yan said, adding that "I still use it because it's very easy to transfer money. When I have some income and haven't decided on how to use it, I can transfer to Yu'e Bao and earn a bit of profit."
But Peng Xiaoyun, a 30-year-old, stopped using Yu'e Bao and switched to wealth management products in banks.
"When Yu'e Bao first came out, I used it, but I think the return is too low now, so I don't use it anymore," she shared with CGTN.
Chen Jiahe, Chief Investment Officer at Novem Arcae Technologies, said the increase in savings in the short term is partially due to the COVID-19 lockdowns and higher returns in funds. "But in the long run, returns will go down, and people will start spending more."
"If you look at short term performance. There are two things. The first is the COVID-19 has temporarily reduced people's consumption — there is an increase in savings. And the second is if you look at people's purchase of funds," Chen said.
He further elaborated, "In the past half-year, the funds' performances have been extraordinarily good. A lot of money has rushed into the funds. But if you talk about the long term, the saving rate will gradually drop, and people will consume more, like what happened to the U.S. in the past 50 to 60 years."
