In many parts of the world April is ‘Financial Literacy Month’ and this year not-for-profit, Financial Basics Foundation is highlighting the need for improved financial literacy education to counter the sophisticated marketing tactics used by ultra-cheap retailers.
Financial Basics Foundation says that companies like Shein, Temu and similar e-commerce sites, are capitalising on the trend in consumer desire, using pervasive marketing techniques designed to hook young users and lure them into making unnecessary purchases.
Through its free online toolkit of programs and resources, Financial Basics Foundation aims to empower young people to make better choices when shopping online.
Financial literacy isn’t just about saving
Financial Basics Foundation CEO, Katrina Samios, says financial literacy isn’t just about saving, investing and interest rates. ‘It’s about being able to recognise value, making informed financial decisions and resisting the draw of manipulative marketing campaigns.’
A recent NIQ survey on Gen Z consumers, showed that consumers are: motivated to find the lowest price possible and actively seek out discounts; are heavily influenced by opinions, reviews and influencer endorsements on social media; and demand a highly personalised shopping experience, with tailored recommendations that reflect their individual tastes.
According to the research from Roy Morgan most Shein and Temu users are repeat customers, and over 40 per cent have purchased four or more times over 12 months.
Targeted advertising and addictive game mechanisms
Users subjected to precise targeted advertising and addictive game mechanisms are incentivised to buy impulsively and overspend, without regard for quality.
According to Financial Basics Foundation, the effects of these predatory marketing techniques are being felt by young consumers.
Ms Samios says e-commerce platforms are becoming increasingly sophisticated in how they lure young consumers. ‘They often use tactics that encourage impulse spending, making it easy to lose track of financial limits.’
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