Image: People use a row of coupon machines near a supermarket entrance in Beijing, China.
Alexander F. Yuan  /  AP file
Shoppers use a row of coupon machines near a supermarket entrance in Beijing. More than a craze, discount shopping is becoming a way of life for young Chinese.
updated 1/2/2011 5:47:59 PM ET 2011-01-02T22:47:59

Ding Can is obsessed with bargains. Her purse is crammed with more than 30 shopper discount cards and dozens of coupons. Her apartment is packed with freebies, from cosmetic samples to key chains. She often lines up before dawn for tickets to discounted movies.

Her yen for savings isn't out of necessity. The 32-year-old software testing engineer is relatively well off. She says, simply, "I've never come across a good deal I didn't like."

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More than a craze, discount shopping is becoming a way of life for young Chinese. Known as the "coupon generation," they are changing the way business is done in the world's second largest economy.

Companies as global as Nike and as local as the Yonghe fast food chain are courting the bargain hunters. The eagerness for deals has spawned discount clubs, online group buying and sidewalk kiosks that dispense coupons.

A planned three-week campaign by Mercedes-Benz for its two-seat Smart car ended in a day when the more than 200 cars were snapped up in less than four hours at about 135,000 yuan ($20,000) each, a 20 percent discount, on China's most popular online retailer.

It's a relatively new and youth-oriented phenomenon in China, where consumerism has taken off only as the country has shifted from central planning to capitalism and started to grow.

Americans, of course, have been clipping coupons for years — Coca-Cola Co. began offering discounts around the turn of the last century. But in China, the trend has implications for the global economy.

The spending habits of 350 million Chinese aged 18 to 35 are seen as crucial to boosting the world's recovery from recession and to one day vaulting China past the U.S. as the world's largest consumer market. That could come as early as 2020, according to Goldman Sachs, the investment banking giant.

"This isn't your grandma or a housewife cutting out Sunday coupons in her kitchen, because they are the future," said Leeon Zhu, a senior planner at the advertising firm Young and Rubicam's Shanghai office. "And they're at the forefront of retail consumption growth in this country."

Ding and other members of "Discounts for Singles," an online forum, traded war stories at a spicy Chinese restaurant on a recent evening.

Ding showed off a free sports watch she earned by taking photos of herself in front of a Lenovo computer store during a promotional event. A dining partner regaled the others with her latest steal: two dozen half-priced cartons of fruit juice at 4 yuan (60 cents) a carton.

"How are you going to drink all the juice?" one asked.

"I'll give it away to friends and family as gifts," said Shan Yunfei, who makes about $500 a month as an administrative assistant at an architecture firm. "They love it when I bring home new products."

Even the dinner is free. New eateries looking for publicity offer meals to people such as Ding and Shan, who are frequent reviewers on, China's most popular restaurant listing site.

Frugality is highly valued in China, a legacy of generations of poverty that only ended with the free-market reforms of the past 30 years. Savvy consumers are applauded by friends and family. TV shows such as Beijing's popular "Managing Money" air interviews with Chinese who saved big through group-buying events and promotional deals.

The biggest target is the 18-35 age bracket, born after the chaos of radical Maoism. They have largely only known steadily rising incomes.

"Young Chinese consumers love to spend and rarely save because they are optimistic that they'll always have money," said Fu Guoqun, a marketing professor at Beijing University.

Shan, 23, concedes that discounts get her to consume more than she would otherwise. Her bag is stuffed with McDonald's coupons and other discount cards.

"I'm obsessed," she said. "Whether it's at work or home, I'm dreaming of the next deal."

There are coupon kiosks in subways, malls and supermarkets, and almost every major brand offers a discount card. Eyeball China, a Beijing-based company, prints 170,000 coupons every day for restaurants, car rentals and other goods and services and places them in about 200 kiosks across the capital.

"The market is so saturated with brand names that a small discount makes a huge difference helping the brand stand out with their target consumers," said Xie Dehui, Eyeball China's vice general manager.

Amy Yu, a skinny real estate agent, stopped to collect more than a dozen coupons for Yonghe restaurant's fast food noodles and McDonald's chicken burgers at a kiosk outside French hypermarket Carrefour in southern Beijing.

Yu looked like a pro: She pecked furiously at the kiosk's touch screen, scanning for the best deals for her daily lunches. The machine, which is in front of a Yonghe shop, spews out coupon after coupon for up to 25 cents off meals priced at the equivalent of $1.50 to $4.

"I work and eat around here, so I usually print a lot of coupons that look good regardless of whether or not I use them," Yu said. "It's also thoughtful to give them out to colleagues and friends, too."

China's biggest online shopping site,, has more than 150 million registered users. The website connects buyers and sellers who offer everything from cars to English lessons and often have direct connections to Chinese manufacturers offering steep discounts.

"We looked to online promotions since many of our customers are part of the post-'80s and '90s generation," said Cai Gongming, a Mercedes vice president. "It's a big trend right now. ... They are familiar with online group buying.", previously little-known, became an overnight sensation in June by offering a $25 package of two movie tickets, two sodas, ice cream and popcorn for only $6. It sold about 150,000 packages, generating nearly $900,000 in sales over a 24-hour period.

Some websites promoting new products offer "grabbing" events. Players must win an online game or click on a promotional button at just the right time to claim prizes, which could be anything from a cell phone to clothes.

Beijing native Zhang Xu calls the event "death to the second" and chooses his prizes carefully. Among his recent favorites was half-price driving lessons: $6 for two hours.

"Usually, women will go after anything. My friend just won some socks," said 25-year-old Zhang, who works as an assistant manager at a digital video company. "But I don't like to waste my time so I go after good stuff that's not too sought after, like theater tickets, which are not as popular as electronics."

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explainer: The top 10 business stories of 2010

  • Image: BP CEO Tony Hayward surveys gulf spill repair work

    In 2010, the economy rebounded fitfully from the Great Recession — starting strong, wobbling at midyear but showing enough vigor by year's end to quell fears of a second recession. Yet Americans hardly felt relief under the weight of high unemployment, which began the year at 9.7 percent and is now 9.8 percent.

    An oil spill devastated the economy and environment along the Gulf Coast and hammered energy giant BP's stock price and reputation.

    China muscled past Japan to become the world's No. 2 economy, a reminder that the global economic order is shifting and America's supremacy is diminishing.

    It was a year of job shortages and swollen budget deficits that disheartened Americans and caused deep losses for incumbent Democrats on Election Day. The Federal Reserve tried with scant success to jolt the economy with record-low interest rates.

    The struggling economy was voted the top business story of the year by U.S. newspaper editors surveyed by The Associated Press. The oil spill in the Gulf came in second, followed by China's economic rise.

  • 1. Economy struggles

    Image: Unemployment brochures are seen on display at the employment training facility, JobTrain, in Menlo Park, Calif.,

    Climbing out of the deepest recession since the 1930s, the economy grows at a healthy rate in the January-March quarter. Still, the gain comes mainly from companies refilling stockpiles they had let shrink during the recession. The economy can't sustain the pace. The lingering effects of the recession slow growth.

    The benefits of an $814 billion government stimulus program fade. Consumers cut spending in favor of building savings and slashing debt. Businesses hesitate to hire. Cities and states lay off workers. Growth slows through spring and summer.

    Unemployment stays chronically high. In May, the number of people unemployed for at least six months hits 6.8 million — a record 46 percent of all the unemployed.

    Pointing to the deficits, Congress resists backing more spending to stimulate the economy. The Federal Reserve seeks to fill the void by announcing it will buy $600 billion in Treasury bonds to try to further lower interest rates, lift stocks and coax consumers to spend.

    As the year closes, the economy makes broad gains. Factories produce more. Consumers — the backbone of the economy — return to the malls. Congress passes $858 billion in tax cuts and aid to the long-term unemployed. Yet more than 15 million Americans are still unemployed. Economists say a full economic recovery remains years away.

  • 2. Gulf oil spill

    Image: Plaquemines Parish coastal zone director P.J. Hahn lifts his boot out of thick beached oil at Queen Bess Island.

    An explosion at a rig used by BP kills 11 workers and sends crude oil gushing into the Gulf of Mexico. The spill devastates the fishing and tourism industries along the Gulf Coast and causes environmental damage that may last for decades. BP sets up a $20 billion fund to compensate fishermen, restaurateurs and others whose livelihoods were damaged.

    The oil giant still faces civil charges and a criminal investigation by the Justice Department and lawsuits from hundreds of individuals and businesses. BP's stock market value shrinks by more than $100 billion after the April 20 disaster before bouncing about halfway back.

  • 3. China's rise

    Image: Workers install scaffolding at a construction site as a Chinese national flag flies near by in central Beijing.

    China passes Japan as the world's second-biggest economy. The World Bank says it could surpass the United States by 2020. China's gross domestic product is spread out over 1.3 billion people — amounting to about $3,600 per person. That compares with GDP in the U.S. of about $42,000 per person. In Japan, it's about $38,000 per person. China's thirst for raw materials and other products helps the rest of the world recover from the recession. Still, the U.S. and Europe complain that China gives its exporters an unfair competitive edge by keeping its currency artificially low.

  • 4. Real estate crisis

    Image: Home for sale

    Housing remains depressed despite super-low mortgage rates. The average rate on a 30-year fixed mortgage dips to 4.17 percent in November, the lowest in decades. But home sales and prices sink further. Nearly one in four homeowners owe more on their mortgages than their homes are worth, making it all but impossible for them to sell their home and buy another.

    An estimated 1 million households lose their homes to foreclosure, even though the pace slows after evidence that lenders mishandled foreclosure documents. Some did so by hiring "robo-signers" to sign paperwork without checking their accuracy.

  • 5. Toyota recall

    Image: Toyota Master Service Technician Mike Blomberg inspects a gas pedal assembly.

    Toyota's reputation for making high-quality cars is tarnished after the Japanese automaker recalls 10 million vehicles for sudden acceleration and other problems. Toyota faces hundreds of lawsuits alleging that some models can speed up suddenly, causing crashes, injuries and deaths. Toyota blames driver error, faulty floor mats and sticky accelerator pedals for the unintended acceleration. The uproar damages its business. Toyota's U.S. sales rise just 0.2 percent through November in a year when the industry's overall sales climb more than 11 percent.

  • 6. GM's comeback

    Image: GM headquarters

    General Motors stock begins trading again. It signals the rebirth of a corporate icon that fell into bankruptcy and required a $50 billion bailout from taxpayers. GM uses some proceeds from its November initial public offering to repay a portion of its bailout. (Washington still holds about a third of GM's stock.) GM's recovery helps rejuvenate the industry. Sales of cars and light trucks rise 11 percent through November compared with the same period in 2009. Shoppers who had put off replacing their old cars return to showrooms.

  • 7. Financial overhaul

    Image: Barack Obama, Christina Romer, Timothy Geithner, Barney Frank, Paul Volcker

    Congress passes the biggest rewrite of financial rules since the 1930s. The law targets the risky banking practices and lax oversight that led to the 2008 financial crisis. The law creates an agency to protect consumers from predatory loans and other abuses, empowers regulators to shut down big firms that threaten the entire system and shines more light into markets that have eluded oversight. Republican critics say the law goes too far, imposing burdensome rules that will restrict lending to consumers and small businesses.

  • 8. European bailouts

    Image: Athenians walks behind a board showing exchange rates at a foreign currency exchange shop in Athens on Wednesday.

    Greece and Ireland require emergency bailouts, raising fears that debt problems will spread and destabilize global markets. European governments and the International Monetary Fund agree to a $145 billion rescue of Greece in May and a $90 billion bailout of Ireland in November. The bailouts require both countries to slash spending, triggering protests by workers. Investors fear that debt troubles will spread to Spain, Portugal and other countries, weaken the European Union and threaten the future of the euro as its common currency.

  • 9. 500 million Facebook users

    Image: Mark Zuckerberg

    Facebook tops the 500-million-user mark. It expands its dominance of social media and further transforms how the world communicates. If it were a country, Facebook would be the world's third-largest. Facebook tightens its privacy settings after criticism that personal information is being disseminated without users' knowledge or permission. Founder Mark Zuckerberg is named Time magazine's "Person of the Year" and is the subject of a high-profile movie about Facebook's creation.

  • 10. iPad mania

    Image: Customer uses an Apple iPad
    AP file

    Apple Inc. unveils the iPad, bringing "tablet" computing into the mainstream and eroding laptop sales. Apple is expected to sell more than 13 million iPads this year. The iPads sell about twice as fast as iPhones did after their 2007 introduction. The price of Apple stock rockets more than 50 percent in 2010. Competitors scramble to try to catch up. They include the Dell Streak, BlackBerry PlayBook, the Samsung Galaxy Tag and HP Slate.

Photos: Year in business cartoons

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