Chinese youth anxiety levels are reaching new heights
The year of 2020 may have been the toughest year of employment for fresh graduates in China. Economic growth slowing coupled with the pressure from COVID-19 increased the feeling of instability and insecurity among young people. Such emotion and tension have been well captured and amplified by the Chinese media in a 2020 buzzword called involution (内卷) that has resurfaced this summer, and also through popular reality TV shows.
In November 2020, Tencent Video released the second season of Irresistible Offer (令人心动的offer 2) a semi-scripted career reality show that enjoyed a spike in popularity and reflected the overall high levels of anxiety about the workplace that young people currently face.
The show tells the story of law school students who enter the workplace to experience the cruel but inspiring life of lawyers working in a top law firm. Over the course of one month 10 contestants compete for the prize of two job offers from the law firm.
The show format is already a hit in South Korea, another East-Asian society where young people are increasingly anxious and feel the pressure to succeed in highly competitive work and social contexts (Good people 신입사원 탄생기-굿피플). Tencent purchased the show and producers have not been shy about leaning into the anxiety facing moments and triumphalist narrative that pervades the one who achieves ‘the offer’. In one such example of a blatant push to drive this anxiety, the posters for the show’s poster declared the ‘workplace is not an examination room, but a battlefield’.
In line with this existential foreboding that overshadows young people’s lives and media examples choosing to prominently play into that was a novel expression that in 2020 grew to encapsulate that feeling. Involution (内卷) was selected in the top 10 buzzwords of 2020 by the literature magazine Yaowen Jiaozi, which captures the tiredness and ennui of many Chinese people today. ‘Involution’ is a word originally invented by anthropologist Clifford Geertz in 1963 to explain why a society or an organization has neither mutational development nor incremental growth, but simply repeats itself at a simple level. However in China, the term has taken on an organic meaning that refers to "white-hot competition" in which people are trying their best in all aspects of daily life to gain small competitive advantages; squeezing out the space for others while causing themselves mental exhaustion. Involution appears in many aspects of Chinese people’s lives, from kid’s education to the workplace through to the marriage market.
One of China’s best-known public intellectuals, Professor of Political Science at Tsinghua University, Liu Yu, has said in a public speech that the ongoing involution in contemporary China reflects the fact that the criteria for success is becoming increasingly homogeneous and one-dimensional. She also pointed out that through involution, people are chasing a sense of security which is provided by following the herd and going with the flow because it is believed that you cannot go wrong when the majority are also doing the same.
Young Chinese people’s desire for stability has led to the ‘economy of discipline’
When anxiety becomes the dominant emotion of society, people are more likely to turn to government jobs and recognizable certifications to increase their career stability and predictable pathways. A complex of external factors contribute to this conservative desire. Apart from Covid-19, economic slowdown, and the rapidly changing world political environment, the notorious prevailing 996 working culture in many Chinese tech and internet companies also plays a significant role.
The 996 working culture stands for working from 9am to 9pm six days a week. The sudden death of a 22-year-old girl from the e-commerce giant Pinduoduo in January 2021 triggered young people’s reflection on their own life and career choices. Such a working culture makes people realize that high-income jobs in the tech industry are ostensibly an exchange for one’s health and personal time. In addition, the internet industry is also notorious for ageism. There is a widely held belief that people will have their most productive years before 35 and that if they do not get promoted to a high position before that age, then it is better to let them go in place of cheaper and more expendable young hires.
In contrast with such values and working culture, governmental jobs are well-known for their relaxed and ‘humanistic’ working culture. This makes these traditional ‘iron rice bowls’ (铁饭碗) jobs appealing to young people. The number of people who registered for the 2021 National Civil Service Examination was more than 1.5 million, which makes it the second highest number of test takers in history after 2018, which saw 1.6 million but was also amplified as a result of the far greater number of government positions open that year. Interestingly, as some Chinese media have pointed out, graduates from domestic and internationally prestigious universities are more interested in governmental positions than before and have actively joined this ‘battle’ to compete.
Apart from the growing appeal of governmental jobs, the heat of taking exams and getting professional qualifications is even stronger.
- 20% more people registered for Certified Public Accountant compared to 2019
- 16.8% more people registered for National Judicial Examination compared to 2019
- 12.3% more people registered for Teacher Qualification Certificate Examination compared to 2019
Under such pressure, working and studying harder seems to be the only way to gain a competitive edge over others. That’s the background of how the ‘economy of discipline’ emerged.
Interestingly in China, the concept of ‘discipline’ seems to be double-layered, which includes:
- Self-discipline (自律) means the locus of control is inside the person
- Other-imposed discipline (他律) means externally administered discipline where the locus of control is outside the person and one’s behavior can be motivated and shaped by what and how others are doing. In China, other-imposed discipline can be from peers, colleagues or even just random people on the Internet.
The economy of discipline manifests in both online and offline places – encouraging young people to find avenues that fit their busy lives but lead them closer to their ultimate goals.
Online spaces for ‘discipline’ try to combine convenience with efficacy
There are many online forums / groups / communities where strangers share how long they study and what they study to monitor and motivate each other to keep studying hard. On Bilibili, there are many #study with me# type of live streamers who livestream the whole process of their study every day. The highest live streaming view count has reached almost 0.5 million.
There are also apps specially designed to provide online shared self-study room. Companies like Timing have received investments from the capital markets by simply providing a virtual self-study room for anyone who wants to be monitored by others so they can better self-discipline themselves. Covid-19 made this form even more popular.
Offline economy of discipline helps to address functional needs like quiet spaces with new business models to attract customers
According to iiMedia Research, there were nearly 1,000 new commercial self-study rooms born in 2019 nationwide and cities like Shenyang (T2), Beijing (T1), Shanghai (T1) have witnessed the most growth in their numbers.
Overall, 20-35 year old people are the main groups of consumers for self-study rooms. Yet, according to our research they can be divided into three groups who study for different purposes.
1. Applying for post-graduate degrees: 20-25 y.o. They are mainly university and college students preparing for postgraduate entry exams like IELTS / TOFEL / GRE / GMAT. Library spaces are in short supply and that then drives people to commercial study spaces, which often have a higher density near universities and colleges.
2. Civil servant exam: People who apply for civil servant positions cover a wide range of age groups going from 20 to 35 (35 is the oldest age one can apply for entry into the civil service).
At the younger end of the spectrum (~22 y.o.) many people already have a job but are not satisfied. They use the civil servant exams to improve or change their imperfect job futures. Some of them may live in rented apartments, so self-study rooms provide them a space free of interruptions from flatmates.
The older age group is between 28-35 y.o. Unlike the younger groups who may choose to take the civil servant exams because their parents want them to, people around their 30s are more self-driven, in other words they want a stable job and secure income for themselves. In some cases they may already be married with children, in which case the pressure they face for a stable income can be even higher. The difficulty for them is the lack of study ambiance (family interruptions at home) and limited time and energy after work and family chores.
3. Professional certifications: White-collar workers study to prepare for all kinds of certifications and qualifications to gain a competitive edge. Most frequently cited exams are CPA, CFA, medical, engineering and teacher related certifications.
Comparative analysis: self-study rooms in East Asia
In high pressure East Asian societies commercial self-study rooms are more likely to survive and form into mature businesses.
While commercial self-study rooms are still a nascent industry with roughly 2 years of history in China, in Japan and South Korea it is a mature industry that has existed for more than 30 years. If we draw a comparative study, there are some social and cultural roots that make this phenomenon scalable in these three countries.
East Asian countries are high-pressure societies. Fierce competition has existed since childhood and continues all the way through university entrance examinations to the world of job seeking. Also, there are shared values inherited from philosophies and cultural world views that all sufferings have their reward and sweetness comes after bitterness (苦尽甘来). Under such conditions, study becomes a clear means to success that people have taken for granted. Moreover, it provides a sense of progression and helps to relieve the worries of living in a highly competitive environment, both of which are critical as emotional comfort.
Such social and cultural context also leads to other commonalities in these three societies. First the target consumers, mostly being university students and adults, study for jobs and careers. Secondly, the choice of location is either leaning to stay close to urban travel hubs or educational resources (colleges, universities, educational institutions). South Korea may have some particularity here as multi-children families are the norm and a lack of private study space is often the case for many families. In this scenario, the self-study room attendees’ age will skew younger from middle to high school students - and many self-study rooms are community-based, which is safer for students to go home after nighttime study, just like the popular South Korea TV series Reply 1988 dramatized.
Shifting the focus to the evolvement and business prospects of commercial self-study rooms, there are further nuances to compare. Although self-study rooms first appeared in Japan in the late 1980s, the market size didn’t expand substantially until 2010 when Japan was undergoing a serious period of unemployment crises, resulting in reduced household income and sluggish consumption. This leads to an interesting association between weak economic years and higher cultural anxiety as a lever for increased business in self-study rooms.
Although South Korea had its first self-study room later than Japan, it is now a more mature and well-developed market. It completed premiumization between 2012-2016 with the market jumping from KRW 400 billion to KRW 756 billion. Premium self-study spaces have lots of added-value services to meet people with higher needs. Big chain brands dominate the South Korean market (e.g. Toz has 380 branches all over the country) whereas in Japan most self-study room operators are medium-small companies.
Looking back to China, like many other nascent space as a service start-ups; commercial self-study rooms still haven’t worked out a clear sustainable profit model. Most self-study room providers are independent small companies, with only a few companies forming small chain scale. The capital market is holding a wait-and-see attitude, and haven’t invested too much money to date, perhaps cautious after the fallout of co-working investment.
While it is difficult to predict that this business phenomenon will bring big opportunities for self-study room providers or incubate a 'WeStudy' version of WeWork in China, it opens many interesting innovation opportunities for other lateral industries and companies.
For the current commercial self-study room, essentially people are paying for two things: one is a proper study space, the other is to make-up for the lack of self-discipline. Yet we think space owners actually can offer more diverse service to different targets.
Opportunity 1: Indulgence
Target consumer and occasion:
People who seek self-betterment; lifelong learners with relatively high spending power wanting to spend their weekend mornings or afternoons in a productive way and in an aesthetically pleasing place. Some of this audience may hope to meet some interesting people that do not exclude partners/dates.
Opportunities:
- Create an ‘immersive feeling’ space: use all sorts of sensory stimulus, e.g. humidity, aroma, white noise, natural cues
- Create an ‘aesthetic’ space: themed spaces with clever spatial designs and appropriate designer objects that can reflect the user's taste
Suitable space operators: independent coffee shops, bookstores.
Opportunity 2: Efficiency and convenience
Target consumer and occasion:
Professionals who have urgent calls/emails/important work to do during a commute or business trip. They have this urgent need to work in a convenient space; a quiet and well-equipped ‘mobile office’ to finish their task. Their stay is relatively short, maybe just 10 minutes, or up to one hour.
Opportunities:
- Uninterrupted ‘mobile office’: these offices are shaped like individual study boxes (see the picture below) and can be placed in subway stations, coffee shops near travel nodes so that people can hop on and off. These boxes are equipped with essential work facilities (high-speed WIFI, charger, stationery) and soundproofing materials to provide a separate space in a high-traffic area. Fees can be charged every 10 minutes. They are similar but expanded offers of the 'call booth' we see in co-working spaces and increasingly other areas like gyms.
Suitable space operators: subway stations, large chain convenience stores, gyms and fitness studios, and large chain coffee shops like Starbucks have this advantage to provide standardized boxes and place them in their stores. Starbucks in Japan already has this feature.
Opportunity 3: Ambiance of discipline
Target consumer and occasion:
University students or white-collar workers who need a bulk of time dedicated to studying for exams and certificates. They need a quiet and focused space that is not so expensive so they can come every day. They are happy to purchase a monthly or quarterly membership if discounts will be offered. They are relatively self-disciplined but fighting alone can be lonely sometimes so they also want others-imposed discipline to make them stay motivated and feel peers are fighting together with them.
Opportunities:
- Better utilization of idle space: real estate companies can consider renovating some empty floors / available retail spaces with lower rent into study space. Bookstores can think about how to better utilize idle space or designate and renovate certain space into self-study rooms as bookstores have a natural link between studying and improving oneself.
Suitable space operators: real estate companies, shopping malls, bookstores.
Opportunity 4: Virtual companionship
Target consumer and occasion:
K12 students or university students who want to be disciplined but cannot afford go to commercial self-study rooms so they choose to study at home or the dorm, but they like the idea of virtually studying with others as it gives them a sense of companionship.
Opportunities:
- Online self-study room: a virtual space where people do not talk but just broadcast that they are studying to get others-imposed discipline as well as a kind of virtual companionship
Suitable space operators: internet companies, livestream platforms, or companies that want to develop a branded version of these platforms.
Self-discipline is expected to continue as involution becomes the norm and not the exception
There are many potential economic, social and work related headwinds that may perpetuate the sense of societal anxiety that involution has become a ubiqitous byword for. Beyond this, high employment pressures will continue via both the competitive talent market and the oversupply of graduates.
As laid out above, there are many ways that industries and companies can provide a service and brand infrastructure to address the second order effects of the economy of discipline.
Over the next decade will we see a studying space operator with a business model like WeWork emerge, or will study spaces become another feature of convenience stores and coffee shops businesses?
