An Excerpt from The Split

China's expanding influence in manufacturing and retail is creating new opportunities for global trade and commerce. However, companies outside of China still face challenges when trying to establish business operations within the country.

Shaun Rein, founder of the China Market Research Group, shines a light on the current sociopolitical situation in China in his new book, The Split. With a growing middle class and shifts in national economic policy, Rein argues that the time is ideal for investors to enter the Chinese market. 

In this excerpt from Chapter 16, Rein discusses the role of Chinese women in the post-Covid consumer revolution, highlighting the need for companies to adjust their marketing strategies to directly target this emerging audience.

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“Should I buy a BMW X5 or a Porsche 911?” the 41-year-old Tiffany asked me while we were having Peking duck for lunch in Beijing. Originally from Fujian, Tiffany is the managing partner of the Beijing operations for an American consulting firm. Under her direction, the firm’s sales beat expectations by 75 percent over the previous three years. Recognizing Tiffany’s business development abilities, the global partners offered her to become one of the youngest ever equity partners when she was 38.

Tiffany’s rise to the top of her firm is typical of many female executives in the private sector in China and indicates a breakdown in traditional gender roles. After she joined the firm on graduation from a top Chinese university, Tiffany quickly rose up the ranks. She now outearned her husband, five years her senior, who works at a different consulting firm.

Eager to enjoy the fruits of her labor, she was thinking about buying a BMW, a Li Xiang, or a Porsche—she, not her husband, was the main decision-maker for their family of three’s auto purchases.

Tiffany represents a shift happening at the more senior levels of companies—a trend that foreign brands need to understand: even in sectors like the automotive industry where sales and decision-making have been traditionally driven by men, women are now becoming the main decision-makers— whether to buy a cheaper brand like BYD or an expensive one like Mercedes and Porsche. They are used to making decisions in the office and are making more of the decisions at home.

Moreover, as China shifts to a service economy based on brains rather than an export or infrastructure economy driven by raw physical might, more women are becoming the main breadwinners of their families. Women are out-earning men even within poorer families living in rural areas where traditional family structures and gender norms are more likely to be in place.

Salaries in the service sector toward which females gravitate like restaurants or retail are higher than those in manufacturing or construction where men still dominate because of the need for raw strength. As one 32-year-old waitress from Anhui Province told me, “I am working in Shanghai where I can get a high salary in a restaurant, while my husband has stayed in our hometown working in construction. I earn double what he does, which I’m proud of, but he can now spend more time with our son, which I am jealous of.”

The biggest big-ticket items Chinese buy are houses, cars, and education for children. Traditionally, men dominated the decision-making process for these sectors, but we now see that successful career women like Tiffany are now the major decision-makers. She is also the main decision-maker on where to send her daughter to school—she wants to send her to the US or the UK for boarding school and then university. Brands need to take account of this shift in decision-making power and change their marketing campaigns accordingly.

Too many brands import advertising campaigns that worked overseas in America or Europe without much thought of how campaigns will be received by Chinese females. Slogans often don’t translate easily. Companies need to create marketing campaigns that fit Chinese female consumer tastes and aspirations. Having blonde-haired, blue-eyed models galivanting in The Hamptons might work for advertising to women in America but fails to hit the mark with Chinese women.

Women earning high salaries in the private sector are leading the consumer revolution in China’s post-Covid world and driving sales—whether that’s dining out, luxury jewelry, or outdoor apparel. Too many brands do not realize the shift in consumption decision-making taking place and continue to target the traditional—but wrong—target market—middle-aged males. Aside from having the purchasing power to shop directly for themselves, Chinese women in their fifties and below are starting to heavily influence decision-making in sectors like cars that were once the purview of Chinese men. Silver Hair–generation women are also deciding what to buy, as we saw in Chapter 15. Brands that still favor men in advertising campaigns as a default are making a grave mistake as women are increasingly influential in making purchasing decisions, even in sectors once dominated by male shoppers. Mercedes, for example, has thrived by targeting females in its marketing campaigns—not just female senior executives driven around by their chauffeurs but also women who drive themselves around. Mercedes’s smaller cars like the A and B classes are popular among women wanting a prestigious brand that’s also cute. As one 40-year-old woman in Shanghai told me who drives a Mercedes B-class, “I wanted to have a luxury car to make myself happy.” China is Mercedes' largest market in the world for a reason—it targets not just traditional segments like males and business executives but also female executives and millennials.

Eventually, Tiffany decided to buy a Porsche Cayenne Turbo—she liked the sporty nature of the 911 but eventually decided she wanted a bigger car so that she feels safe driving in traffic and for her daughter’s soccer and other sports equipment. Tiffany told me driving such a sporty but large SUV made her feel powerful. In her case, she said, she chose the Turbo version of the Cayenne because she like the color of the paint rather than because of the extra power. This was the main reason she chose the more expensive Porsche—cheaper versions did not have the mix of colors she wanted. Different consumers will have different purchasing motivations. In cars, for example, to varying degrees speed, handling, horsepower, color choices, seat comfort, and passenger and storage spaces will all rank differently in consumer’s priorities. Understanding what combination of factors motivates females, rather than males, to buy products will be critical for brands in product development and marketing.

©2024 John Murray Business. Reprinted with permission. This article may not be reproduced for any other use without permission.