By Olivia Tin
Of all the rapidly growing consumer groups in China, women are becoming an especially prominent source of sophisticated consumption demands. It is no secret that women are embracing education and the role of women within China’s society is changing as they strive for independence, ambition and fulfillment.
According to the Economist report women are increasingly the breadwinners with 62% considering themselves as joint breadwinners. However, 11% of women consider that even if they earn money, the partner is still the main breadwinner and expense payer which allows them to spend most of their income on shopping, travel and leisure. Female residents of upper-tier cities have higher income, express their financial independence more strongly and cover their own expenses. The incomes of women in lower-tier cities is lower but, despite this, most manage to provide well for themselves. The main product groups women purchase are apparel and accessories, cosmetics and healthcare products, goods for home and food, and baby products.
As for women making the household buying decisions:
- 86% – are the main decision makers in purchasing cosmetics,
- 79% – in purchasing clothing and accessories,
- 78% – in groceries,
- 70% – maternity and baby products,
- 63% – goods for home and furnishing,
- 48% – electronics and
- 47% – leisure and travel.
The buying decision makers are not necessarily those one who pay for the goods but play a very important role on the shape of the market by determining which products are purchased. With the growth of the female purchasing power, retailers need to adjust their business models to target these market influencers.
Online social media has a very strong impact on every aspect of a modern Chinese woman’s life. From this point of view China is a leading country in a new type of consumer trend – social consumers. Before making any purchase, women will surf the Internet to check reviews, testimonials and prices. Moreover, they want to know the personal experiences of those who have already purchased items and they are interested to read about the brand; its story and philosophy. Besides, it’s difficult to overestimate the importance of Chinese bloggers as opinion leaders, especially for the female audience.
Some brands, better than others, have succeeded at building trusting relationships with Chinese female customers through both traditional and online channels. Among international marketing gurus – Coach, Burberry, Fendi, Montblanc, Michael Kors, Tiffany, YSL and Kate Spade – do a great job at connecting with social female audiences through Wechat, Weibo and KOL communication.
Healthcare, Baby Products & Education
Government policy introduced at the end of the 1970s in China has had a strong influence on female consumer behavior. The ‘421’ family is a typical Chinese family model which consists of 4 grandparents, 2 parents and 1 child. The combination of the government policy and cultural traditions make “kids of the 80s” the only ones responsible to take care of parents, grandparents and children; putting much pressure on young couples. It means that demand for healthcare and baby products, medical and educational services which are now already strong, will continue to grow. Young women, especially, will be making the purchasing decisions not only for themselves and immediate spouse and child, but also for their parents, grandparents and just as likely that of her partners’ as well. This is a powerful influencer many brands already recognise.
One notable example is Johnson & Johnson. During the past 2 decades the company has implemented an impressive number of health care and educational campaigns targeting younger women. For instance, one of the health education programmes – Baby Touch – engaged over 11 million new moms. Johnson’s Baby initiated another campaign “Spare Space, Spread Love” in 2012 to support working mums and make motherhood work even during the working hours. As a result, 200 million mums were contacted and the number of Weibo fans increased by 460% within 6 months. The campaign helped J&J to increase social awareness, brand loyalty as well as guarantee long term ROI growth.
With increased income, women in China spend extra money to improve their personal image, self-esteem and health. Personal care is an important part of this. The demand for weight loss, fitness, beauty and anti-aging products in first to third-tier cities are continuing to rise. The demand for plastic surgery is growing as well but most women prefer to do it in Korea instead of China due, most likely, to the more advanced service quality. As for cosmetics products, the demand is for luxury with more of the middle class having the ability to purchase. Skin care in China is a much larger market than that of make-up, cosmetics and perfume. Women take facial care very seriously, in some cases using 3-5 different types of skincare products at one time, twice per day.
Chinese women pay much attention to their appearance. They believe it gives them better opportunities not only for marriage but employment as well.
Clarins, for example, one of the most popular foreign skin care brands in China is using Wechat to reach out to their consumers. The company is notably focusing not only on Chinese permanently residing in the mainland, but also those traveling extensively around the globe for both business and leisure. L’Ocittane has strong offline marketing in China and also uses Weibo to introduce new products and receive immediate customer feedback. Clinique engages in many creative online campaigns on Weibo as well. Skin care and cosmetics brands are nowadays integrating much more O2O campaigns in their marketing mix as they are influential and effective.
According to China Internet Watch, the online shopping penetration rate in China for 2009 was 29,5% and increased almost twice to 55,7% (361,42 million people) by 2014. About 69% of female consumers prefer online purchase for:
- Clothing & Accessories,
- Maternity & Baby Products,
- Goods for home,
- Air Tickets and
- Travel packages
Women are the major buyers on the Alibaba’s Tmall, Jumei.com and Taobao Market Place. Cross border shopping, or international shopping, is becoming more popular. The number of cross border online shoppers reached 18 million in 2014. The top products among female consumers are clothes, shoes and accessories, health & beauty products, jewellery, gems and watches, and personal electronics. Goods are purchased from:
- USA (84%),
- Hong Kong (58%),
- Japan (52%), UK (43%) and
- Australia (39%).
The wider range in quality and variety, prices and sales unavailable in China, is what attracts female consumers to international shopping.
At the end of 2014, the female population of Mainland China reached 667,030,000 million. Women are becoming more and more independent and they are a major market driver. Due to growing demand, there are big opportunities for the coming 5 -10 years for international companies who are engaged in baby and healthcare products as well as clothes and accessories, goods for home, cosmetics, electronics. As for the service industry; traveling, beauty and spa, educational courses (including online programmes) are booming in China.
Market players should pay attention to the consumer behavior peculiarity; the time when it was easy to sell any products with a “Made in Italy” label has passed. Chinese are very social and opinion determines their behavior. Internet penetration in China means increasingly more people discussing and sharing using online social media and we can all agree that focusing on online strategy is extremely important. Companies that develop personal and unique approaches to connect with existing and potential customers are taking definitively wise steps towards success.
About the Author
With solid experience in the Market Research department of Russian Petroleum Company, Olivia Tin moved to Hong Kong in 2011 and joined Alarice (www.alarice.com.hk) – the marketing agency based in Hong Kong as a Business Development manager. Olivia specializes in marketing strategy set up in Hong Kong and Mainland China as well as PR and Event Management. Email: [email protected]