Nikki Mandow: Want to do business in China? Here are four surprising things you absolutely need to know

The Chinese were once the last of the big savers. But not the new young rich kids.

Earlier this month, Air NZ chief executive Christopher Luxon told a room full of China business experts and wannabes his airline had lost $100 million in the 13 years it had been flying to the People's Republic. Air NZ had been naive, made unforced errors, and needed to be way more selective in its markets, he said.

"And I see a lot of that in New Zealand business in China."

Fonterra, Lion Nathan, Pumpkin Patch - though Luxon wasn't rude enough to mention them.

China is our single-biggest export market, worth $16.6 billion. Zespri expects to sell a quarter of its kiwifruit to China by 2025, up from less than 5 per cent a decade ago. More Chinese study here than any other nationality. They're our biggest tourism spenders, and are likely to overtake Aussies in terms of sheer numbers by 2024.

But what do we know about these wealthy Chinese consumers who are increasingly buying our goods and services? And what don't we know that we should know? Nikki Mandow discovered four surprising things from Lower Hutt-born, Shanghai-dwelling researcher Mark Tanner.

Young. Really young

Forget a generation of high-spending golden oldies. It's the young splashing their money around in China these days, Mark Tanner, MD of marketing/research agency China Skinny, told the China Business Summit. The highest-earning income group in China is 18-29 year-olds. Barely out of nappies.

Customers shopping at a Hema Supermarket, part of Alibaba Group, in Shanghai.

This is counter-intuitive to marketers used to countries where mostly we earn more the older we get. Here baby boomers are the ones with the cash. Not so in China, where the average person born in the 1990s is seven times more likely to have a university education than someone born in the 1970s. And 70 per cent of tech workers - the highest paid in the country - are under 30.

Millionaires

They call it "one child, six pockets"; the demographic phenomenon spawned by China's one child policy, where a kid born in the 1990s might have two parents and four grandparents spending money on them - and only them.

And some of these little emperors can be very wealthy indeed. Do the maths, Tanner says, pointing to Shanghai, where China Skinny is based. Of the city's 25 million people, around 11 million are locally born and the rest are from elsewhere in China. The Shanghainese own pretty much all the property, 80 per cent of it mortgage-free. Each household typically owns more than two houses - many have five or six. And prices have sky-rocketed.

"It's not unusual to have a child with a mum and dad who might own six freehold apartments worth on average US$1 million each," Tanner says. "So that's US$6 million he stands to inherit. Plus the two sets of grandparents. Say they have six apartments each.

That's US$18 million and this boy is the sole heir. Then you've got another Shanghainese - a girl. Shanghainese tend to marry Shanghainese of the same social standing. So there's a nice nest egg of US$36 million."

The average Porsche owner in the US is in their 50s. In China, they are 35.

Spenders, not savers

The Chinese were once the last of the big savers - piles of notes under the mattress. Not the young rich kids, Tanner says. Often they come back from studying overseas, and find wages are low in China - perhaps only $1000-2000 a month. If you stand to inherit millions but earn a pretty low salary "why on earth would you bother saving it?"

So they spend - luxury food, drink, clothes, foreign furniture, cars and holidays. And when they run out, they borrow.

Analysts at the Federal Reserve Bank of New York estimated that between 2007 and 2017 China accounted for 60 per cent of all new credit created globally.

Of course, most of that isn't being borrowed by rich kids, whose credit card debt is part of "consumption loans" – about 14 per cent of total household debt - and the fastest growing component.

The average age of a Porsche owner in China is 35.

Non-conformist

Forget Louis Vuitton and Rolex. The post-1995 Chinese generation is often edgy and independent in their consumption, Tanner says.

"Their direction and influence comes from overseas pop culture. They get street cred by buying undiscovered products and niche brands. When they travel they want to get off the beaten track. Put a video on their Wechat so their friends can live vicariously."

The desire of these kids to stand out is even worrying the government in Beijing, Tanner says. The so-called "sissy pants" phenomenon is growing - effeminate young men wearing makeup and platform shoes, getting nose jobs and spending up large on clothes.

Two of the top-selling terms for men looking for clothes on popular Chinese e-commerce platform Taobao are "lacy" and "see-through".

"These kids are confident in themselves, they have found a group and are expressing themselves," Tanner says.

Maybe pigeon-holing 1.4 billion people living in a landmass of 9.6 million square-kilometres isn't the smartest approach for a budding Kiwi exporter trying to crack the Chinese market.