During the 2026 National People's Congress sessions, the term "youth economy" gained rapid prominence, moving from legislative proposals to inclusion in numerous local government work reports and swiftly entering the policy arena. Currently, the youth economy is evolving from youth lifestyle and cultural phenomena into a stable, scalable economic form. However, transforming an economic trend into a sustainable model typically requires scalable demand, stable supply, industrial chain support, and a supportive institutional environment. Recent research indicates that while the youth economy is a popular topic, common misconceptions persist. On one hand, it is often simplistically equated with "youth-focused economy" or "economic activities by young people." On the other hand, it is narrowly defined as the consumption behaviors of Generation Z, such as trendy toys, social media check-ins, and product launches. In reality, accurately understanding the essence of the youth economy and clarifying its distinctions from youth-focused economics and Gen Z consumption markets is not only essential for elevating the youth economy from a "trend" to an "industry" but also a critical pathway to overcoming current developmental bottlenecks and activating long-term growth momentum.

Megacities, as hubs of population concentration, resource abundance, innovation, and broad influence, serve as both the primary incubators for the youth economy and the vanguard leading its high-quality development. Leveraging the advantages of megacities to advance the youth economy from a "phenomenon" to an "industry" can offer replicable and scalable practical experiences for nationwide youth economic development, warranting in-depth discussion.

On April 18, 2026, the Shanghai International Flower Festival officially commenced. Coinciding with a sunny weekend, major exhibition areas such as Pudong's Qiantan, Jing'an's Suhe Bay, and Huangpu's Yuyuan Garden attracted large crowds. Visitors were seen taking selfies with their smartphones.

First, expanding demand boundaries: transitioning from "youth consumption" to "youthful demand" to build scalable consumption advantages. Megacities, with their large and diverse populations, not only have massive youth groups as core consumers of the youth economy but also substantial "youthful-minded" segments representing latent demand. Leading the youth economy requires breaking "age boundaries," extending demand from "youth-exclusive" to "youthful lifestyle for all," thereby achieving scaled demand upgrading. Undoubtedly, young consumers remain the main force in the youth economy. China's Gen Z population is approximately 260 million, and by 2024, Gen Z and millennials together accounted for about 60% of China's luxury consumption, with the average age of Chinese luxury consumers dropping to 29. However, the consumption capacity and potential of various "youthful-minded" groups should not be overlooked. In megacities, middle-aged groups, though not traditionally "young," generally maintain an openness to new trends, willingly spending on youth-oriented sectors like trendy experiences, smart products, and cultural entertainment. With stronger purchasing power, they are key consumers in areas such as domestic trendy brands, health-focused trendy products, and immersive cultural tourism. Elderly groups are also shedding the "conservative consumer" label; by June 2025, China's "silver-haired netizens" aged 60 and above reached 161 million. Many seniors actively learn to use smart devices, engage with short videos and online socializing, and participate in youth trends. Shanghai's silver-haired tourism market currently exceeds 80 billion yuan and is projected to approach 200 billion yuan by 2028, emerging as a significant new demographic in the youth economy.

Second, innovating supply methods: shifting from "product" competition to "IP" identification for differentiated value creation. Supply innovation is the core competitiveness of the youth economy and a critical link connecting demand and activating markets. Currently, the supply side of the youth economy is undergoing a profound structural transformation, moving beyond traditional models dominated by brand channels and scale. A wave of creative and dynamic founder-led brands has emerged as new key players. These brands are characterized by founders who combine roles as designers, operators, and content creators, competing not on scale or cost but through unique branding, warm IP creation, and emotional resonance rather than mere product functionality. This represents a shift from "selling products" to "selling value." Megacities provide a dense ecosystem for such entities, not only due to demand but also through abundant conversion platforms that enable rapid implementation of ideas and accelerated brand growth. These platforms act as "creativity incubators," linking talent from universities, technological resources from research institutions, industrial advantages of innovative companies, and the creativity of makers. They offer professional technical support, accessible display venues, and diverse implementation scenarios, transforming founders' ideas into tangible, experiential, and consumable products and brands that are continuously refined through market feedback. This trend is observable in the growth of city flagship stores. Shanghai added 236 quality flagship stores in 2023, rising to 523 by 2025—nearly doubling in three years—including 138 stores at national or higher levels. Hangzhou, leveraging its mature e-commerce ecosystem, has cultivated the largest incubation ground for founder-led brands in China. Supply entities, exemplified by independent designer brands, validate business models online and build brand assets through offline experiences, forming a unique innovation supply pathway.

Third, reimagining spatial scenarios: moving from "physical space" to "vibrant integration," using carriers to form developmental ecosystems. Unlike traditional enclosed commercial operations, the spatial carriers of the youth economy focus on breaking physical boundaries and emphasizing vibrant integration. They prioritize spatial flexibility and public attributes while maintaining vitality through continuously updated youth-oriented content, enabling different sectors to mutually empower and attract客流, ultimately realizing a new logic where "commerce is the destination." Shanghai's Hengfu Historical Preservation Area exemplifies spatial revitalization empowering the youth economy. Its unique role lies in, first, breaking the singular nature of physical spaces, transforming them from mere consumption areas into multifaceted scenes integrating experience, social interaction, and culture to meet core demands for personalized, immersive experiences; second, activating underutilized urban assets, revitalizing old buildings and streets from idleness to value recreation. As a core area bearing Shanghai's historical legacy, the Hengfu zone possesses abundant resources like old villas and lanes but previously faced challenges like monotonous业态 and low vitality. In recent years, abandoning traditional enclosed commercial models, the area has focused on flexible design and public space creation, deeply integrating historical architecture with trendy业态 and cultural content. It has developed the "Wukang Road-Anfu Road Fashion Block," hosting nearly 200 distinctive businesses, generating over 100 million yuan in annual tax revenue, and attracting more than 40,000 daily pedestrian visitors, becoming a premier venue for international brand debuts and a cluster for local consumer brands. The "Donghu Road-Yanqing Road Trendy Fun Lifestyle Block" freed up 1,500 square meters of public space for courtyard-style layouts, introducing numerous founder-led brands, domestic trendy designer stores, and trendy集合 shops, alongside immersive experiences, cultural salons, and trend events, establishing itself as a new landmark for youth consumption.

Fourth, pioneering governance innovation: transitioning from "urban management" to "inclusive co-governance," forming an urban development community. Compared to traditional economic forms characterized by scale and standardization, the youth economy features rapid iteration, cross-sector integration, and content-driven dynamics, demanding institutional environments that shift from entry and regulation toward greater inclusiveness and openness. First, open mechanisms should lower innovation thresholds. Youth economy innovations are frequent and lightweight, with pop-up events, short-term operations, and founder-led shops involving rapid trial and error. Traditional pre-approvals and static permits can raise entry costs. Megacities should streamline processes, implement one-stop services, and parallel approvals to provide fast tracks for lightweight innovations. Second, inclusive mechanisms should support业态 exploration. New entities like founder-led brands, composite spaces, and content operations often don't fit traditional regulatory categories. Guided by包容审慎 principles, expanding regulatory sandboxes and allowing model experimentation within controlled risks are necessary. Relaxing regulatory boundaries and adapting rules flexibly can预留 growth space for new业态, avoiding innovation suppression due to regulatory gaps. Third, multi-stakeholder co-governance should enhance open vitality. With deep integration between youth economy spaces and industries, governance targets shift from single业态 to composite scenarios. Internally, governments need to break departmental silos and promote local coordination and permit integration; externally, they should rely on industry organizations, platform rules, and social evaluations to build collaborative mechanisms that maintain market order while preserving the flexibility and creativity of the youth economy. Particularly, encouraging youth, makers, and founders to participate in governance discussions can foster development consensus through open co-governance, providing stable and inclusive institutional support for the youth economy.