In the UAE, generation Alpha (those aged between eight and 15 years old), are already showing signs of spending independently in the digital economy and are offering insight into where the future of e-commerce may be headed, according to a new study from digital payments provider Checkout.com.
In fact, apart from generation Alpha being the beneficiaries of their parents’ spending, 75 per cent of eight-year-olds and 92 per cent of 15-year-olds make payments themselves, rather than via a parent or adult. Through its latest research, conducted across the UAE, UK, US, and China, Checkout.com reveals and compares a number of trends, related to the growing spending power of this consumer category.
Meanwhile, 54 per cent of millennials shop on direct-to-consumer websites, while 51 per cent of Gen Z turn to social media, preferring to shop via social media platforms, underlining the growing preference for social commerce.
Checkout.com also indicates that Gen A in the UAE is leading the way in e-gaming services, compared to the UK, China and the US. On average in the region, Gen A spends around 47 per cent of their allowance on games, while children in other countries spend 28 per cent.
Despite their young age, Gen A children in the UAE over the age of 13 are already getting well-acquainted with buy now, pay later (BNPL) service providers. Around 11 per cent of this demographic already have a preference for BNPL as a payment method.
There’s also a growing trend of children over 13 using BNPL as a payment method in the US (seven per cent), UAE (11 per cent), and China (19 per cent). However, this figure remains less than one per cent in the UK.
The spending trends of the future
The Checkout.com study finds that generation Alpha is driving over a quarter (27 per cent) of their household’s monthly spending globally, rising to nearly a third of monthly spend for digital purchases, as 29 per cent of Millennial parents take responsibility for purchasing digital products each month for their children. This comes as digital products and services make up 21 per cent of the average global household spend.
Gen A’s purchase influence is greatest in online educational resources, which nearly half 47 per cent of parents purchase for their children, followed by entertainment streaming (30 per cent).
Social commerce is considered a key shopping channel for Gen A. Children around the globe appear to use social media as the go-to source for finding out about deals on products, with very little regional variation in preference: (US: 57 per cent, China: 56 per cent, UK: 48 per cent, UAE, 41 per cent).
“It’s clear that Gen A is playing a major role in the digital economy,” said Rory O’Neill, chief marketing officer at Checkout.com. “The younger generation is going beyond using social channels for discovery, but actually purchasing through these platforms. We’re seeing this unfold in China, which should always be considered the blueprint for future commerce.
“What’s more, businesses need to pay close attention to customer preferences for payment – across all generations – in order to drive growth and loyalty in this fast-changing and competitive market.”
Social commerce is also the most common shopping channel, globally, for Gen Zs in all countries, with only just over one-third (35 per cent) of Gen Zs regularly shopping in physical stores.
The post Generation Alpha Already Comfortable Spending Online and Considering BNPL, Finds Checkout.com appeared first on The Fintech Times.