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The big China consumer stories of the past year have included a vaccine scandal, food contamination scares, surging overseas home buying, and continued rising consumption by urban families.
These stories, in reality, are mostly about Chinese women as an ascending consumer class. More specifically, they are about Chinese moms, who are quickly becoming the most important consumers on the planet.
My argument for this is five points:
Point #1: Chinese mothers are the major driving force behind increasing Chinese household consumption.
There are an estimated 320M moms in China, making them roughly the same size as the entire US population. And they are the trifecta of Chinese consumer spending.
First, Chinese mothers have their own personal spending power and typically contribute 50% of the family income.
Second, they direct household spending. In a 2010 MasterCard report, 75% of Chinese women said they control the family spending. This can be the wife approving expenditures above a certain level. And in some cases, Chinese wives control the bank accounts and then give the husband cash to use. The standard joke is the husband buys the home but the wife runs and furnishes it.
Third, Chinese mothers often control the spending related to the retired parents. This is particularly true for the larger expenditures such as housing and medical costs.
So in many families, Chinese moms are effectively directing the spending across three generations. Point #2: Chinese mothers are deeply focused on the health and safety of their one child.
Family spending control by mothers is not unusual globally. But in China it is amplified by the one-child policy, the prevalence of “little emperors” and the greater health and safety concerns of living in China. We see Chinese moms being far more concerned with the health and safety of their one child - from the water they drink, to their food, to their education, and to their general safety.
One interesting result of this is the different advertising for women seen in China today. In the West, we see often ads for women speaking to independence or fun. However, in China we see a focus on happy and healthy families. For example, in 2013, McDonalds China launched a “Moms’ Trust” campaign which not only highlighted healthy children but also focused on long-lasting relationships. This is a contrast to fast food commercials in the U.S. which typically express fun and good food. China’s fast food commercials tend to emphasize long-lasting relationships and strong family values.
On the Chinese McDonald’s website, you can even find sections such as “Mom’s standards, our standards” and “We care for how healthy our chicks grow”. Point #3: Chinese mothers are rising as consumers in their own right.
Chinese mothers (and women generally) are important consumers in their own right. As mentioned, they typically contribute 50% the family income. And by most measures, they are more financially ambitious than women in virtually any other country. Go into any office building in Shanghai and you will see a sea of cubicles filled with white-collar Chinese women, most of whom also have a child at home. For example, the photo at the top of this article is of Ms. Xin (and her super-cute daughter) who works in the administration of Peking University (thanks for pics :).
However, the personal wealth of Chinese women is increasing due to advancing careers and the delaying of marriage and children. For example, the number of high school students in China going to college is expected to reach about 40% by 2020 (up from 10% in 2010). But going to college (and then getting a good job) usually means delaying marriage, family and other commitments. In the past ten years, the average age at which women have children in China has increased from 24 to 27. And it will soon be closer to 30, which is similar to most developed countries.
One consequence of this delaying of life events is greater wealth. By the time women do marry and have children in China, they have more money and higher incomes. So Chinese moms are going to have more money to spend even before they become the primary financial decision-makers of the household.
Point #4: Many of the biggest China consumer stories are actually stories about Chinese moms.
Health and wellness has become a major consumer issue in China. It shows up in every study. But this is really a women and mom’s issue. (Note: 60% of Chinese men still smoke and this number is actually rising. In contrast, only about 3% of Chinese women smoke and this number is falling.)
Consider the popular 2015 pollution documentary Under the Dome. This film by CCTV producer Chai Jing took air pollution to a new level of national priority. But Under the Dome actually offered no new information on pollution in China. What it did do was re-frame pollution as the story of a mother worrying about pollution’s impact on her daughter’s health. It spoke to Chinese moms.
Another example. Jiang Yilei (a postgraduate student and Internet sensation who goes by Papi Jiang) just signed a 22M RMB advertising deal with a beauty products e-commerce site. Jiang has risen from obscurity to national fame in just six months with homemade videos were she plays various characters. But the most popular one is of a young career woman dealing with the pressure to marry and have a baby.
Another example. An elite school private school in Changzhou has recently been found to have been built on polluted land. Over 500 students have become ill and there are now investigations and protests. But look at the photos of the protesters in the press. The entire crowd is Chinese moms.
You can find such consumer stories all the time. From food scandals, to pollution to education to travel to family spending. It's almost always about Chinese moms.
Point #5: Get ready. Cause Chinese moms are going global.
In 2015, there was a surge in Chinese women going to the California to give birth. And Chinese births in the U.S have likely reached +60,000 per year. This phenomenon even showed up in the 2013 Chinese movie “Finding Mr. Right”, where a Chinese woman went to Seattle on a tourist visa to go shopping and have an American baby.
"Birth tourism" is a good example of Chinese moms starting to go global. In this case, it is about giving their child US citizenship but also about increasing their educational opportunities. US citizenship not only enables sending their child to the US for school (anything from kindergarden to PhD), but it also helps in getting into elite international schools in China. The most famous recent story about “birth tourism” was that of the Chinese woman who gave birth on a plane heading to California - and she kept asking “are we in US airspace yet?”.
Another example is that fertility clinics in Los Angeles have been reporting surging numbers of Chinese women arriving for services. Clinics I have spoken to mentioned 20-40% of their patients are now visiting Chinese. Such services offer a higher quality level than in China (i.e,. health and wellness) and can include procedures not allowed in China, such as gender selection and genetic screening.
Another example is the aesthetics market. Chinese women are increasingly getting on planes to get botox, plastic surgery and other treatments abroad. Again, this is a different than in the West where such treatments are overwhelming done by women over 40. But these Chinese women are mostly 25-40 and include lots and lots of young moms. We are currently seeing this business boom in Thailand and South Korea – and increasingly in Hong Kong.
The take-away from all of this is that Chinese moms are at the forefront of the rising wealth of Chinese households. They are the front of that incredibly important wave. And given the increasing concerns about GDP growth and economic re-balancing, I argue that makes them the most important consumers on the planet right now.