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Holding Up Half the Sky: Women Emerge As China’s Core Consumer

Posted on | March 24, 2008 | No Comments

by Fara Warner

During my travels in China during the past decade, it has been heartening to see the advancement of women in the country. Access to education and business opportunities are beginning to give Chinese women their rightful place in the country’s economic expansion.

Consider a few facts from a report by Ernst & Young in 2007. According to a study from Mastercard cited in the report, young, unmarried women or married women with no children will control $260 billion in purchasing power by 2015. That is up from just $180 billion in 2005. Even elderly women who live alone will have a surprising amount of spending power—$115 billion by 2015—more than double the amount in 2005. While 74 percent of women earn less than their husbands, an estimated 78 percent of them have control over the family’s money. Married women make the decisions on what the family eats and what the family wears in Chinese households.

Even when it comes to big purchases such as cars or luxury items, a significant minority of Chinese women—23 percent—indicated that they could make those purchases on their own. This is a shift from conventional wisdom as Ernst & Young’s report succinctly points out: “…general assumptions were that men being the sole or main breadwinner would also therefore act as the main decision maker when it comes to financial planning on spending.”

Those assumptions are being proven wrong. China’s women are following the same path as women in more developed countries—we influence and control household purchases even when we are not the primary breadwinners. And our influence and purchasing power only grows as we become financially responsible for our families.

In a country that once prized savings, more and more consumers are spending greater percentages of their monthly income. Women are no exception. Sixty-five percent of female consumers spend 60 percent or more of their monthly wages. And the more women make, the more money they spend, states the report. Women who earn less often save more, while women who earn more spend more on household items and luxury goods. Such a consumption trend means that as Chinese women’s economic expansion continues, they will spend more of their paychecks as opposed to savings. However, Chinese women are mirroring their counterparts around the world when it comes to investing in their future. Investments remain high on the list of what Chinese women spend their money on.

Besides investments, what are China’s women buying—and what does that mean for companies seeking to do business in China? According to a report from the All-Women’s Federation in China, women are spending money on home purchases, white goods and children’s education expenses. Luxury goods also are high on the list for China’s young urban women.

Interestingly, home purchases ranked at the top of married couples without families. Those statistics on home purchasing coincide with an article I wrote for Forbes Asia in January 2007 on B&Q, China’s largest home-improvement company.

The firm, part of the London-based Kingfisher Group, has made great strides in understanding Chinese consumers. B&Q expects to hit $1 billion in sales in China in fiscal year 2008. Much of that revenue will be driven by women who are now setting up their own homes instead of following what has been traditional in China for centuries—moving in with their mothers-in-law.

Now married couples are moving into their own homes alone—and they need everything. Chinese apartments are built as empty shells and buyers must purchase everything from plumbing to electrical to carpet and paint. B&Q’s design service helps consumers who are China’s first generation to own their own homes. As one couple told me while shopping together at a B&Q in Shanghai, “We need everything.” Note that they were shopping together as well, mirroring a U.S. trend in which couples tackle home renovation projects together.

These statistics and anecdotes may come as a surprise to outside observers. Often when I mention how far Chinese women have come, I am bombarded with questions about female infanticide, the one-child policy, sweatshop labor and slavery. Don’t get me wrong. I am not an apologist for the problems that continue to plague China and its women. Much remains to be done as is the case in every country in the world with regard to women. But economic advancement is helping women finally make good on Mao Zedong’s motto: Women hold up half the sky.

In the next blog postings, I’ll explore more about China’s “Pink Yuan” phenomenon and how companies are approaching this new powerful consumer. Stay tuned and let me know your thoughts.


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