Jackpot! Why sales of lottery tickets are surging among the youth in China

The lottery ticket market in China has experienced a significant surge recently, driven by various factors including economic stress, the thrill of instant gratification, and increasing popularity among the youth.

China’s lottery ticket sales rose by 10.2 per cent year-on-year to 55.46 billion yuan (US$7.8 billion) in April, according to the Chinese Ministry of Finance. Sales of lottery tickets to support the country’s welfare system reached 18.76 billion yuan, marking a 20.3 per cent increase from the previous year.

Meanwhile, lottery ticket sales to support the sports industry increased by 5.7 per cent year-on-year to 36.69 billion yuan.

Why are sale of lottery tickets surging?

With China grappling with economic challenges, including hesitant consumption, a property crisis, and high youth unemployment, many individuals have turned to lottery tickets as a means of de-stressing and seeking entertainment.

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In an interview with Chinese state broadcaster CCTV, Su Guojing, founder of the non-governmental trade organisation China Lottery Industry Salon, commented, “When the economy slows down, the lottery may move forward.”

This sentiment is supported by data from Beijing, which reported that sales from all types of nationwide lotteries exceeded 149.5 billion yuan (US$20.6 billion) in the first quarter of the year, marking a 19.7 per cent year-on-year increase. Specifically, gua gua le sales, or scratch card sales, accounted for 26.1 per cent of the total, representing an 81.4 per cent year-on-year increase.

Pundits have drawn parallels between the surge in instant lottery sales and the “lipstick effect” theory, where cheaper items sell well during economic uncertainties.

Zhao Xijun, a finance professor at Renmin University in Beijing, spoke to the South China Morning Post, saying, “The price per ticket is not high and the prizes aren’t big either. It makes people happy. It’s entertainment.” This phenomenon highlights how young people today seek comfort and small joys through inexpensive purchases like lottery tickets.

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Why lottery tickets?

Used as gifts and often featured on social media, lottery tickets have gained substantial popularity among young people.

In March, a post on Chinese microblogging platform Weibo by news aggregator Sina.com garnered 53.5 million views after claiming that workers could use lottery tickets to clock in.

This trend is evident among individuals like 22-year-old teacher Men Yuxian from Hefei, who buys a ticket every two to three weeks. “I saw everyone scratching, so I scratched,” she told SCMP. “In the end, my luck was pretty good, so I’d get a ticket every so often.”

However, the scarcity of gua gua le tickets has made it challenging for enthusiasts like Men to find them, dampening their motivation. “I don’t have the mood to go buy them anymore,” she added.

The appeal of instant lottery tickets, especially scratch cards, lies in the immediate gratification they offer. A Gen Zer who recently quit her job won 1 million RMB (US$138,437) through scratch cards, sparking the hashtag “Shanghai post-00er won 1 mil and has partially retired” (#上海00后中奖100万实现局部退休#), which gained 160 million views on Weibo, reported Dao Insights.

This trend reflects the increasing allure of scratch cards among young people, who often seek small joys and emotional value in their purchases, especially during economic uncertainties.

What has the impact been on suppliers?

Despite the rising demand, many lottery retailers are facing challenges due to stock shortages of gua gua le tickets. Reports indicate that shop owners have to compete for stock much like concert tickets, leading to long turnaround times and insufficient supply.

The Chinese Ministry of Finance reported that annual sales of instant lottery tickets nearly doubled in 2022 and 2023, from 60 billion RMB (US$8.31 billion) to almost 120 billion RMB (US$16.61 billion). In the first three months of 2024 alone, sales reached 38.9 billion RMB (US$5.38 billion), more than double the 17.4 billion RMB (US$2.41 billion) in Q1 2023.

The supply of scratch cards is strictly regulated and monitored in China, with only three factories authorised to print them. This controlled production has struggled to keep pace with the booming demand, causing significant stock shortages.

The trend is not new

From January to April 2023, lottery ticket sales in China totaled 204.92 billion yuan, up 17 per cent year-on-year. Under China’s lottery management rules, funds raised from ticket sales are allocated for administrative expenses, public welfare projects, and prize funds.

In August 2023, nationwide lottery ticket sales soared to their highest level for the year, amid public concern about the economy. The official Xinhua news agency reported that sales jumped 53.6 per cent year-on-year to 52.96 billion yuan (US$7.25 billion).

From January to August 2023, a total of 375.76 billion yuan of lottery tickets were sold nationwide, reflecting a 51.6 per cent increase from the previous year.

This surge coincided with months of predominantly negative economic data, including a youth unemployment rate that hit a record high of 21.3 per cent in June last year, reported Reuters.

Despite supply constraints, the demand for lottery tickets continues to rise, reflecting a broader trend of seeking small joys and emotional value in uncertain times.

With inputs from agencies