"Do Everything You Can" Points Also Fully Pulled... MZ Generation Engages in 'Jjantech'

MZ Generation Chooses Secondhand Trading Over 'Flexing'
Walking and Taking Photos... 'Digital Waste Picking' Popular Despite Profits in the Tens of Won

As the era of high inflation continues, more MZ generation (Millennials + Generation Z) are engaging in frugal living. The photo is not related to the specific content of the article. [Image source=Getty Images]

[Asia Economy Reporter Yoon Seul-gi] As high inflation continues, the MZ generation (Millennials + Generation Z), whose financial situations have become tight, is diving into 'jjantech' (frugal finance). They are engaging in so-called 'digital waste paper picking' through applications (apps) or earning interest income through short-term savings and deposits. With the stock market continuing to plunge, instead of seeking quick profits, 'sohwakjjeon' (small but certain money gathering) seems to be spreading like a trend.

According to Statistics Korea on the 12th, the consumer price index for September (108.93) rose 5.6% compared to the same month last year. Although the rate of increase decreased for the second consecutive month following August (5.7%), it still remains in the mid-5% range. The government expects prices to peak in October and then stabilize, but due to strong downward rigidity?where prices for public utilities and personal services like dining out do not fall once they rise?high inflation is expected to persist for some time.

As a result, the MZ generation is tightening their wallets. They are not only cutting back on stock investments but also saving on coffee expenses. Additionally, secondhand trading is active. While 'flex'?a form of conspicuous consumption?was popular among young people during the COVID-19 pandemic, recently, they have been selling luxury bags in the secondhand market or purchasing secondhand luxury goods.

According to the Korea Internet & Security Agency, the secondhand trading market size grew nearly sixfold from 4 trillion won in 2008 to 24 trillion won last year. As the 'recommerce' (secondhand trading) market has become active, the distribution industry has also entered the secondhand luxury market. Hyundai Department Store renewed and reopened its entire Cheongdam branch last month as a secondhand store called 'Second Boutique.'

With prices soaring to the sky and real wages feeling reduced, jjantech is also spreading among the MZ generation. Recently, as fears of a global economic recession have grown, instead of investing in high-risk, high-return options, they have turned to frugal financial technology such as 'digital waste paper picking,' which collects small amounts of money through apps.

Due to the economic recession, the MZ generation is diving into so-called 'app tech.' The photo is not related to the specific content of the article. [Image source=Pixabay]

Digital waste paper picking originates from the act of collecting discarded waste paper on the street and selling it to scrap dealers for a small amount of money. It refers to financial app tech where users complete simple missions such as daily check-ins, watching advertisements, walking, or solving quizzes and receive rewards in cash or points. Accumulated points can be converted into cash or exchanged for gift certificates for coffee, fast food, and other products.

Most rewards are small, in the range of tens of won, but the ease of participation and the ability to obtain information depending on the service are cited as reasons for its popularity. Job seeker Lim (25) said, "I am using Naver receipt accumulation. You just take a photo of the receipt from the restaurant you visited and upload it, and you get 50 won per receipt, which is better than other app techs."

Short-term financial products are also gaining attention due to steep interest rate hikes. K Bank raised the interest rate on its demand deposit parking account 'Plus Box' by 0.2 percentage points to 2.5% annually on the 5th. Toss Bank also increased the interest rate on its demand deposit product 'Toss Bank Account' from 2% to 2.3% (pre-tax) on the 6th, a 0.3 percentage point rise. Notably, this product features a 'Receive Interest Now' service that applies compound interest effects daily.

Recently, as the highest interest rates on fixed deposits at the five major commercial banks have entered the 4% range, interest in deposits is rising. On the 12th, based on one-year rates, K Bank's Code K fixed deposit offers up to 4.60%, and Woori Bank's WON Plus deposit offers up to 4.54%.

Meanwhile, the Bank of Korea's consecutive big steps (raising interest rates by 0.5 percentage points at once) have strengthened expectations that commercial banks' fixed deposit interest rates will rise to the 5% range. The Bank of Korea's Monetary Policy Committee (MPC) raised the base rate by 0.50 percentage points from 2.50% to 3.00% at the monetary policy direction meeting held from 9 a.m. on the 12th.

In the resolution of the monetary policy direction meeting, the MPC explained the 0.50 percentage point base rate hike by stating, "Given the continued high inflationary pressure and the increased risk in the foreign exchange sector due to the rise in the exchange rate, it was judged necessary to strengthen the intensity of monetary policy response."

This content was produced with the assistance of AI translation services.