Young Chinese women are an increasingly important force in the world’s consumer markets. Females control three-quarters of household purchase decisions in mainland China and their spending is expected to rise from RMB3.3 trillion in 2017 to RMB8.6 trillion (USD1.2 trillion) by 2022.

The coronavirus outbreak has cast a near-term shadow on spending, but the country’s high labour participation rate of women, better female education, smaller households, and the rise of social commerce are underpinning the booming market.

Women are a relatively high proportion of China’s workforce: the labour participation rate was 80 per cent for women aged 25 to 54 in 2018 compared with a global average of 62 per cent. And better education is giving greater financial autonomy: 56 per cent of women completing secondary schooling enrol in tertiary education within five years – for men it is 46 per cent.

Later marriage and a lower birth-rate mean smaller households. China’s average household size fell from 4.4 to 3.3 between 1982 and 2017; marriage registration for 20-24 year-olds has fallen from 47 per cent in 2005 to 26 per cent in 2018; and the birth-rate, 2.2 per cent in 1982, is now just 1.0 per cent.

Meanwhile social commerce is increasingly popular with female shoppers, reaching RMB21 trillion in 2019 – more than 20 per cent of online sales.

However, from fashion to fitness to healthcare and family care, companies not only need to tailor their products and services to meet the changing demand of Chinese women, they also need to be nimble as preferences change. Premiumisation, value-for-money, a rising interest in self-improvement and experiences are key trends shaping the market.

While some women in lower-tier cities still spend freely, the country’s consumption habits are diversifying, with an increasing proportion of consumers, especially those in higher-tier cities, becoming more discerning, savvy or frugal about spending amid an economic slowdown.

Discerning consumers, who are busy and affluent, continue trading up for better quality, while savvy shoppers, with less income but more time, are carefully choosing better quality goods offering value-for-money.

Women are spending more on themselves, especially on beauty and fitness. Working women increasingly use gyms. Cosmetic sales in mainland China rose 13 per cent in 2019 with aesthetic medical services – such as Botox injections and plastic surgery – growing by 24 per cent a year over five years. Hong Kong is a big beneficiary of medical tourism from mainland Chinese female consumers.

Female-related products such as cosmetics, skin care, and infant-related items have benefitted from premiumisation. While Chinese of all ages are paying more attention to their appearance, younger generations are becoming concerned about their looks at an earlier age.

However, 76 per cent of women believe that shopping isn’t just about spending but is an experience in itself, according to a survey that found only 59 per cent of men saying the same.

Female consumers don’t spend money only on themselves, though. They influence the majority of household spending and buy a wide range of goods related to maternity, babies, and children – the ‘MBC’ market. MBC sales were RMB367 billion in 2016 but could double in 2021.

Although China’s birth-rate is falling, young families are devoting a bigger proportion of their spending to maternity and child products.

First published 26 February 2020.

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