Generation Alpha Drives Digital Economy, Study Finds

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A global study by Checkout.com, a digital payments provider, reveals that Generation Alpha, children aged 8-15, is playing a significant role in driving today’s digital economy. The study, conducted across the UAE, UK, US, and China, highlights key consumer buying behaviors and trends related to the growing spending power of this demographic.

The research shows that in the UAE, Generation Alpha is highly proficient in online shopping, with significant influence on purchasing decisions through technology and social platforms. While 54% of millennials shop on direct-to-consumer websites, 51% of Gen Z prefer social media platforms for shopping, highlighting the rise of social commerce. Generation Alpha in the UAE is also leading the way in e-gaming, spending 47% of their allowance on games, compared to just 28% in the UK, China, and the US.

The study reveals a notable increase in consumer spending intentions, particularly in high-end and big-ticket items. Luxury goods purchases have risen by 46%, whitegoods by 30%, and planned flight purchases by 25%, signaling a rebound in travel and tourism spending.

Generation Alpha children in the UAE are also becoming more independent in the digital economy. The study found that 75% of 8-year-olds and 92% of 15-year-olds in the UAE are making payments themselves. Additionally, 11% of children over 13 in the UAE prefer to use “Buy Now, Pay Later” (BNPL) as a payment method.

Globally, Generation Alpha is driving 27% of their household’s monthly spend, rising to nearly a third for digital purchases. Digital products and services now account for over 21% of the average global household’s spend. Parents are increasingly purchasing online educational resources and entertainment streaming services for their children, with 47% of parents globally buying educational products and 30% purchasing streaming services.

Social commerce is becoming the go-to shopping channel for Generation Alpha worldwide. Children are using social media to discover deals on products, with social commerce leading in countries like the US (57%), China (56%), the UK (48%), and the UAE (41%). The study also found that Generation Z, the younger siblings of Generation Alpha, are more likely to shop through social platforms, with just over one-third (35%) of them still shopping in physical stores.

The study also notes the increasing use of BNPL by children over 13 in markets like the US (7%), UAE (11%), and China (19%), while BNPL adoption is minimal in the UK, where less than 1% of children use it.

Rory O’Neill, Chief Marketing Officer at Checkout.com, emphasized the importance of understanding the digital preferences of Generation Alpha, stating, “It’s clear that Generation Alpha is not just discovering products on social media, but purchasing through these platforms. Businesses need to focus on adapting to the digital behaviors of this generation and meeting customer preferences for payment methods to stay competitive in the fast-evolving market.”

This study underscores the growing influence of Generation Alpha in shaping the digital economy, particularly in terms of their spending power and preference for online and social commerce.