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Abridged excerpt from The End of Cheap China: Economic and Cultural Trends that Will Disrupt the World by Shaun Rein, Chapter 4 ‘The Modern Chinese Woman’. Read Shanghaiist’s interview with Shaun Rein.
THE MODERN CHINESE WOMAN
New job opportunities, better access to education, and more equal positions in family life are creating a modern Chinese woman. No longer trapped in the countryside, where it is difficult to earn subsistence wages, they are working in well-paying jobs that allow them to save and empower them with unprecedented choices when they consume, be it a new house or the latest trends.
Whether it is the waitress-turned-entrepreneur Amy, white- collar businesswoman Melanie, the masseuse Julie, or the maid Little Qian, the modern Chinese woman is using her newfound wealth and position to influence consumption habits and change how brands need to approach the Chinese market. For brands like Laura Furniture, which need to convert factories from focusing on production for export to America to selling into China, or simply for brands looking to offset dwindling growth in America and Europe, understanding how the modern Chinese woman shops is critical. They not only have money, but they influence major household purchases, like automobiles and real estate, that were traditionally the male domain.
Young female shoppers in China are not as price sensitive as many analysts believe. Women tend to be value driven rather than price sensitive, and look for products that confer status. This means women will shop for luxury brands like Louis Vuitton and Gucci despite the hefty price tag, because they feel these well-known brands project an image of high status that makes them feel successful, which is what gives them value. On the other hand, women gravitate toward more affordable brands like Spanish apparel retailer Zara or H&M, because the clothes are comfortable and of good quality, but not too expensive. They also view these brands as a good value.
The importance of product safety and good value to Chinese women is defining the consumption habits of the entire middle class. In many ways, women’s rise in Chinese society and their shopping habits have redefined the Western idea of the emerging Chinese middle class. There is a middle class from a socioeconomic standpoint, but far too many analysts attribute to it the same aspirations and shopping characteristics as the American middle class.
Unlike in America, where people are often born into middle- class families and are content with their children staying in this demographic, Chinese women in the middle-income group are optimistic that they can climb even further up the social scale, either because their salaries are rising so quickly or because they expect to become entrepreneurs themselves, like Amy in Tianjin. With this positive outlook, they purchase more freely than more cautious middle-class Americans as long, as they believe they are buying a safe, high-quality product. Put another way, they don’t view themselves as middle class, but rather on the way to becoming rich.
They shop in a way that mirrors the shape of an hourglass. They either buy luxury products, or the cheapest products in categories they do not value. Brands positioned in the middle level, like Gap, get lost in the drive for Louis Vuitton or the cheapest items possible.
If there is a drawback to all of the love and attention being showered on Chinese women, it is that many in urban areas are becoming spoiled to a dangerous extent. Part of the problem is that parents who suffered during the Cultural Revolution don’t want their daughters to go through any hardship. They indulge their little princesses, rather than help them learn how to over- come any obstacles they might face on their own.
When the going gets tough, many parents teach their daughters it is better to get going and to run away from difficulties. When a job gets too hard or the hours too long, parents often support the mentality of quitting the job and finding another, perhaps in a state-owned enterprise where salaries are high and hours short. In interview after interview with multinational executives in China, I heard complaints about all of the other- wise bright and talented young Chinese women—and men, in many instances—who were unwilling and unable to tackle serious challenges. At some point decades from now, their lack of grit and determination to overcome challenges, and their willingness to take on debt, might cause China to face some of the same challenges that America is now.
The empowerment of women is one of the great developments of modern Chinese society, and is a further factor in the End of Cheap China. Women are becoming the key drivers of spending; they are beacons of optimism in the country, and a major force behind China’s transition toward becoming one of the biggest markets in the world. Western brand managers need to change their outdated notions about who the modern Chinese woman is and what she wants. Chinese companies are already starting to understand these powerful consumers, and are improving their brands to appeal to their values.
Think Cute, Not Sexy
Targeting younger Chinese women between the ages of 24 and 32 is smart, because they drive China’s retail sales growth. However, do not forget to take local consumer preferences into account. Mattel launched a 36,000-square-foot, six-story Barbie flagship store in Shanghai that did not cater to Chinese women who often like different styles than Western women. Mattel hired Patricia Fields of Sex and the City fame to design clothes for Chinese women. These designs were too sexy; the low-cut blouses showing cleavage put off young women. Many told us they found the clothes “too sexy and revealing” and too expensive for frilly products.
Chinese women like “cute”; think Hello Kitty rather than sexy. Snoopy-branded clothing is one of the hottest brands for twenty- something Chinese women. Barbie, by contrast, shut its $37 million store two years after opening.
Barbie targeted the right age group, as younger women are the most optimistic group in China and have increasing dis- posable income, but they failed to that realize young Chinese women are immature relative to Westerners, which is why they like cuter objects. Chinese women often live at home until marriage, and are treated like little princesses, with parents cooking and washing clothes for their daughters even after they have entered the workforce full time.
Key Action Item
Target younger Chinese women between the ages of 24 and 32, but localize for consumer preferences. Companies cannot just bring what worked in the West into China. Understand that Chinese women tend to be more immature and spoiled than Western women.
Craft Marketing Messages and Use Models to Which Chinese Women Aspire
Fueled by taking on a larger role in the economy, Chinese women aspire to a life of luxury and personal indulgence. They increasingly have the money to buy global brands to display their aspirations. Marketing campaigns need to use the mod- els and lifestyle aspirations that Chinese women dream about. Brands like Ra
lph Lauren and Brooks Brothers have made the mistake of using too many blond-haired, blue-eyed female mod- els, summering in Hamptons-like backgrounds, in their advertising campaigns.
As one 26-year-old Shanghainese women told me, “The models look great, but Western women’s hips and busts are different from Chinese. I just do not think I could ever wear those clothes.” Ralph Lauren should have used Chinese models that show how Chinese can look in the clothes, and imagery to which Chinese can better relate.
L’Oréal, on the other hand, has chosen female and male models with whom Chinese consumers can identify. The cos- metics giant uses Western models to show its global brand status and heritage, but it also uses Asian models to show that the products are not just for Western women and men with different skin types. China has become L’Oréal’s third-largest market globally.
The End of Cheap China by Shaun Rein; ISBN: 978-1118172063. Copyright © 2012 by Shaun Rein. Reprinted with permission of Wiley.