The secret weapon for many of China’s booming e-commerce companies is women, who shop more, spend more and generate bigger profits. Though the income of Chinese women is generally lower than that of men, they are also more likely to spend on themselves.
As the WSJ’s Wei Gu reports:
A new crop of Chinese e-commerce companies has harnessed the power of female consumers. Shares of Vipshop Holdings Ltd., which specializes in branded apparel at big discounts, have soared 30-fold since the company went public in New York two years ago. Women are 75% of the customer base and provide 90% of the revenue.
The company said it chose apparel because it is more profitable than alternatives such as electronics, which appeal more to male buyers. VIPshop’s gross margin is a healthy 25%.
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The companies are embracing a research-supported stereotype: Devoted shoppers are disproportionately female. A third of Chinese consumers shopped online more than 40 times in 2013, according to iResearch, a Chinese Internet tracking firm, and 59% of those frequent shoppers were women.
“The ones that are succeeding in China’s e-commerce space are the female-dominated ones,” said Shaun Rein, founder of China Market Research. “The optimism level for female is considerably higher, and they drive retail sales.”
A survey of 1,000 Chinese consumers by China Market Research found that 62% of the women between 25 to 45 plan to spend more in the next six months than in the previous six months, compared with only 52% of the men in that age range. Younger women, aged 24 to 35, are the most optimistic of all.
If they found themselves with extra money, Chinese women say they would spend on clothing and health products, while also setting some aside as savings, according to Nielsen. Women in developed markets would spend on a vacation and pay off debt, as well as saving some. As many as 86% of Chinese women believe their daughters will do well financially, versus less than 40% of women in developed countries.
via The Secret Weapon Behind China’s Booming Online Retailers? Women – China Real Time Report – WSJ.
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