Family forms the foundation of China’s society and is therefore a great place to start when seeking to understand Chinese consumers. From the One Child Policy, to the “Granny State,” to the 4-2-1 Generation, the Chinese family unit is characterised by its complexity and is constantly evolving to keep pace with the country’s social and demographic changes, rapid economic growth, and the challenges and opportunities they present. So if you’re seeking to make an impact in the Chinese consumer market, understanding the Chinese family is a great place to start!
One child policy- Jihua shengyu – 计划生育
Few policies have had such a profound effect in shaping Chinese society, consumer culture and international perceptions of China, as the ‘One Child Policy’ (Jihua shengyu – 计划生育). First implemented in 1979 by the Communist Party in response to fears of overpopulation, the policy’s governance has ebbed and flowed over the years, and its enforcement varies greatly across China. In 2013, the CCP officially relaxed the policy to allow couples to have two children (provided one of the parents is an only child).
Many experts predict the introduction of this ‘Two Child Policy’ will catalyse a desperately needed mini baby boom, which will also have an interesting impact on Chinese consumer culture. With nearly 150 million single-child households throughout China, the One Child Policy has cultivated a child-centered consumer culture, with families investing a significant proportion of their disposable income in their ‘single family treasure’. Chinese parents have even begun to nickname themselves ‘child slaves’ (hai nu 孩奴) – placing their child’s needs above their own and working hard to ensure their child’s economic comfort and success. According to a recent report by a leading Chinese toy retailer, Chinese parents spent ¥1.15 trillion ($180 billion) on products for children under 12 years old in 2012, with this figure expected to rise to ¥2 trillion ($320 billion) this year. China Skinny’s research has found child categories among the fastest growing segments for everything from food to fashion.
However, so far there has been only a lackluster response to the policy’s overhaul. After decades of propaganda promoting the virtue of a single child, combined with soaring living and childcare expenses; having a second child is an unattractive option to many urban couples. For example, in the 10 months following the policy reversal, only 6.7% of eligible couples in Beijing applied for permission to have a second child; whilst across China the rate is slightly higher, fewer than 1 million couples applied for a permit to have a second child. It seems – at least for the near future – China’s Little Emperors and Empresses look set to retain their clutch on the family purse-strings.
Childcare by Grandparents: “Granny State”
Childcare provided by grandparents is a growing trend in China – with 8.1% (an estimated 22.6 million) of China’s children being cared for exclusively by their grandparents. According to Confucian culture grandparents have always played an important role in the upbringing of their grandchildren, and the phenomenon has a surprisingly wide ripple effect on Chinese consumer culture and society.
Many Chinese grandparents act as the primary carers of young grandchildren whose parents migrate from rural areas to cities in search of economic opportunities – parting from China’s so called – ‘Left-behind’ children (留守儿童). Others provide care for their grandchildren whilst their middle class offspring work long hours pursuing demanding white collar careers.
The latter category provides a particularly interesting glimpse into the changes the Chinese family unit has undergone in recent years. With Chinese women more educated than ever before, childcare provided by grandparents has played an influential role in facilitating women’s participation in the Chinese economy. Whilst women in other countries often struggle to balance childcare (for which they are traditionally held responsible) alongside career development, China’s “Granny State” has worked alongside other factors to enable women to fill 51 % of senior management positions in China (over double the global average rate of 24%). Women are subsequently a powerful consumer demographic in China, with China’s ‘female economy’ predicted to reach a net worth of $4 trillion in 2020.
Perhaps a less welcome consequence of grandparents acting as their grandchildren’s main caregivers has been unearthed by a recent study by the University of Birmingham, which found children in China who are mainly cared for by grandparents are twice as likely to be overweight or obese. With many grandparents experiencing poverty and hardship within their own childhoods, they are often over-enthusiastic in spoiling and fattening up their grandchildren. An estimated 23% of Chinese boys and 14% of girls under the age 20 are now overweight or obese driving demand for obesity prevention and weight loss products. Sales of weight loss products are predicted to reach almost $1.4 billion in 2016 according to market analysis by Canada’s AAFC.
4-2-1 Generation (4-2-1时代)
Filial piety, respect and reverence for one’s elders are ideals central to China’s Confucian culture. However, the traditional model of children caring for their parents in their old age is under threat as a result of China’s looming demographic crisis, in the form of a rapidly aging population. By 2050 China’s elderly are expected to soar to 437 million in number – over a third of the population.
The country’s rapidly aging population is one of the greatest issues facing China’s growth and development, and is also a problem keenly felt by many families. China’s One Child Policy has given rise to the 4-2-1 phenomenon, whereby the typical Chinese family consists of 4 grandparents, 2 parents and 1 child. This model predicts that China’s Only Children will ultimately become responsible for the old-age care of both sets of grandparents and their parents. The question of how this can be realistically achieved in the context of limited state welfare for the elderly and an undeveloped aged care market, remains unanswered for many Chinese families.
However, despite presenting many challenges, the 4-2-1 phenomenon also signifies the rapid evolution of the typical Chinese family unit, and heralds a wealth of commercial opportunities for marketers. The elderly look set to become an increasingly influential consumer demographic – with 8% of Chinese consumer’s consumption currently related to products and services for older people. By 2050, this proportion of gross domestic product is predicted to rise to one third.
In targeting China’s elderly consumers, marketers must also take note to interact with younger generations, as well as their target elderly demographic. Younger consumers often play a pivotal role in purchasing for, and shaping the consumer decisions of their ageing relatives, and are often significantly more accessible to marketers via social media and digital marketing.