Millennials are spending more on online shopping, and in the process incurring more debt.
A survey on the spending habits of millennials (Generation Y) by United Overseas Bank Limited (UOB) Malaysia found there was a 38% growth in online spending in the first six months of last year, with Gen-Y spending 1.4 times more than other age groups.
As many millennials grew up on the internet, they also mainly use their credit cards to buy airline tickets and book hotel accommodation. They have also used their credit cards to purchase products from online fashion and retail outlets. This has led to a 26% increase in credit card spending among card members aged between 26 and 35.
A study conducted by the Asian Institute of Finance (AIF) then revealed that the majority of Gen-Y respondents relied on high-cost borrowing, with 38% taking personal loans and 47% engaging in expensive credit card borrowing.
According to UOB Malaysia managing director and country head of personal financial services Ronnie Lim, millennials’ spending habits would dictate and shape the consumer market as they would soon make up the largest consumer demographic.
This is due to the fact that the volume of credit card spending among millennials was five times higher than that of customers above the age of 35 in the first six months of last year, compared with 2015.
The ease and convenience of online shopping has led to many millennials to be in debt and were cautioned against the danger of impulse shopping which could be triggered by manipulative marketing messages.
