By Lin Bai | September 15, 2009
There is an old saying from a profitable businessman: “Want to make money?! Make it from the women and children!!” Direct and absurd as this sounds, this is especially true for women in the current Chinese consumer market. Today, this is truly a “she” market.
During the past two decades, the social and economic status of Chinese women has improved dramatically. China’s rapid economic growth has led to greater access to education, better employment opportunities, and ultimately an increased level of economic freedom and income.
Today, the Chinese female consumer has truly become the major driver of the consumer market. As David Lung, Partner, Retail & Consumer Products Practice, Ernst & Young, commented:
“…Chinese female consumers are shaping the consumption landscape in China to such a degree that companies need to have a profound awareness of who these consumers are and what their needs are. Failure to do so may undermine a company’s ambitions in one of the world’s biggest and most exciting consumer markets...”
Increasing social status
There is an old Chinese saying: “The longer the hair, the lesser the knowledge”, a saying that once reflected the attitude and sentiments towards women in China. Repressed for generations, women were not given the equal opportunities in terms of a professional career.
Today, the new “she” market is far different: more women are accepted into top universities and therefore, able to get better jobs and make more money. Even in rural areas, women’s social status has improved due to urbanization where fewer hands are needed for farming and more job opportunities in the cities are open to them.
China has a terribly skewed men-to-women ratio in the past several decades, and this situation will worsen even more so over the next twenty years namely as a cultural ramification of the one-child policy (most family favors boys). Today, there are 118 males for every 100 females. As the difference between male and females grow, the Chinese people have an expression for this, that girls will become more “ZhiQian” (valuable) now than ever.
Increasing financial power
Despite their progress, Chinese women do not take their new opportunities for granted - they work extremely hard and are, on the whole, more financially independent than before. According to recent surveys, even if their partner or family had enough money to support them, 88% of urban women would choose to work.
If pure economic reasons are not enough to support the rise of the “she” market, culturally, the “she” market is and will continue to be a force to be reckoned with. About half of Chinese women believe that “My partner’s money is my money, and my money is also mine.” indicating that a large part of spending power will continue to reside with female consumers. What might be great for women and terrible for men, is fantastic for brands and marketers alike.
Family “CFO”
Chairman Mao Zedong once has said, "Women hold up half of the sky” meaning women in China have equal importance compared to men. However culturally speaking, women hold up more than ‘half of the sky’ in China in terms of making financial decisions for the family. With their improving social and economic status, Chinese women are effectively groomed as the “CFO” in their family and partners’ business affairs. Their personal preferences have great influence on family purchases and many of them are the actual financial decision makers altogether.
According to Ernst & Young, 74% of married women are making less than their partners, but they have a substantial ‘say’ on how those earnings are spent - 78% of married women make the decisions for grocery and clothing purchasing for the family, and 23% of married women indicate they are able to make independent purchase decision on big-ticket items such as cars and houses.
Spoiled Girls
If the whole what-is-mine-is-mine attitude isn’t enough, the Chinese also believe that little girls should be spoiled (“Fu Yang”) while boys should be raised in a strict frugal manner (“Qiong Yang”). This philosophy has had a long-term impact on today’s society: spoiled girls have grown up, married their respective spouses, and now expect the same level of care and monetary attention to provide for them. For men, it has become second nature to take care of their wives – as evident in the endless shopping, dinner, monthly rent or mortgage payments. For women, this is just the way of life. With the extra free money on-hand in their personal account, women spend as they wish.
Increasing purchasing power
According to many reports, the Chinese female consumer spends up to seven times the amount as their male counterparts. Surprising as that metric may be, this will only increase as the female market gains more economic status in China. To put things into perspective, according to Mastercard estimates, the total purchasing power of Chinese women is likely to rise from $330 billion in 2005 to $525 billion in 2015.
“More women choose to spend today and save tomorrow: 65% of Chinese female consumers spend 60% or more of their monthly wages.” - Ernst & Young
These numbers not only illustrate this growing “she” market in China, but is a good indicator of where and how global brands will look to benefit from this new trend.
Shopping becomes a hobby
Ask any women in China (including myself) about favorite past-times; a very common response will be that of shopping. Unlike here in the US where there are plenty of activities to occupy one’s time, in China, options are limited and shopping is an excellent outlet for something to do. Extend that to a group of girl friends and it is an all-day event of eating out, gossiping, and, of course, shopping. For the working-class woman, going “out to lunch” is a very common alternative of saying, “gone shopping.”
Desire for luxury
As Chinese women continue their economic development, they will want to display their increased status more and more. The most direct way of doing so is through purchasing something recognizably valuable. As foreign brands continue to enter China, under Western influence, more and more women are becoming familiar with international luxury brands including Gucci, Louis Vuitton, Chanel, etc. Being able to own such branded items has become a measure of their wealth, social status, career advancement and even personal worth.
A typical example is that girls will save a half-year of their salary to just buy a Louis Vuitton handbag. While this may be more the exception than the majority, it is still an important trend to point out as China’s economic growth catches up with consumer behavior.
Conclusion
It is no wonder why brand marketers are trying to target this particular segment of consumers. Every media angle in China, much of the focus is on this growing and influential segment in the market. From magazines and specialized websites to even women-centric TV stations (there’s a 30-minute program just on showing women how to put on eyelashes!), the market is flooded with different manners to target this group. It may be a “diva” attitude in China, but this is just the beginning of a growing “she” market.
