BUSINESS Aging women become new engine of Chinese economy

BUSINESS

Aging women become new engine of Chinese economy

Global Times

14:56, May 09, 2019

Chen Qiaoyan, a 58-year-old retiree in Wenzhou, East China's Zhejiang Province, has just returned from a five-day trip to Japan during the May Day holiday.

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Chinese women take photos at a park in Nanning, capital of South China's Guangxi Zhuang Autonomous Region on Friday. (Photo: IC)

Recalling her travel experience in Japan, the middle-aged woman, who traveled with a group of her friends, couldn't wait to show the Global Times dozens of photos of her waving colorful silk scarves taken at famous Japanese tourist sites. 

Chen said she had a very "romantic" experience in Japan, during which she traveled across the country, viewed cherry blossoms, ate sushi and bathed at hot springs.  

For Chen, Japan is also a shopping paradise. During the trip, Chen indulged herself at fashion boutiques and department stores, having spent about 70,000 yuan ($10,331) in Japan to buy everything from traditional souvenirs, cosmetic products, jewelry, luxury bags, and even daily necessities such as toilet lids and electric cookers.

"I really like the way Japanese waiters serve customers. It's respectful and enthusiastic," said Chen, excitedly.  

It was not Chen's first trip abroad. In recent years, Chen and her friends have not only traveled to neighboring Asian countries such as Thailand and Japan, but also to countries further afield, including France, Italy and Australia. The cost of their trips ranged from 30,000 yuan to 80,000 yuan each. 

"In the past, I was working so hard to support my family. Now, I'm retired and have accumulated wealth, so this is the right time for me to take a breath and enjoy a better life," Chen, who used to work as a civil servant in Wenzhou before retirement, explained. 

In China, elderly women between 50 and 70 years of age with deep pockets and plenty of leisure time, like Chen, have been empowered along with the country's remarkable economic rise, and they are growing to become a major force in the country's economy. 

The group, called "dama" in Chinese (meaning "big mama"), gained global fame with a victory against financial titans in 2013 by bottoming out gold when its price plunged, crushing Wall Street's dreams of short-selling the metal on the global market. 

But their influence has since expanded far beyond that. 

Chinese dama, who can often be found together in parks and plazas dancing in groups, have drawn keen interest from marketers in different industries. When they sweep through jewelry stores and department stores during shopping trips to Paris and New York, they make significant contributions to local GDP. And when they descend upon property markets at home and abroad for investment, they may push up local housing prices. 

The group - estimated to be about 100 million people, or equivalent to the total population of Japan - has created a phenomenon in China known as "dama economies," which have had a huge impact on the domestic and global economy. 

Growing consumption power

China has grown into a $13-trillion economy, the second-largest in the world, compared with about $1 trillion in 2000. The economic miracle has lifted Chinese residents' disposable household income and led to a growth in wealth, stimulating the appetites of middle-aged women for high-quality goods and services.  

In 2018, the income for urban households soared to about 28,228 yuan from 6,000 yuan in 2000, according to data released by the National Bureau of Statistics. 

China's economic expansion has also strengthened the yuan, enabling Chinese dama to travel overseas and treat themselves to shopping sprees, Tian Yun, vice president of the Beijing Economic Operation Association, told the Global Times on Tuesday.  

Take outbound tourism as an example. According to Xu Xiaolei, manager of marketing at travel agency China's CYTS Tours Holding Co, the number of dama travelers on the platform has grown steadily to account for 24 percent of total outbound tourists during the May Day holiday, ranking as the second biggest source of outbound tourists among different age groups. 

The elderly are spending more on travel. Chinese dama on average spend 5,813 yuan on overseas trips, 30 percent higher than the average spending of Chinese travelers, a spokesperson from Ctrip told the Global Times. 

As purchasing power expands, their consumption habits have also gravitated toward "shopping to please themselves," rather than buying for their children and husbands, a Paris-based Chinese tour guide, who gave her name as Sarah, told the Global Times.

"During the past holidays, some dama bought up to three luxury bags each for themselves at [French department chain store] Galeries Lafayette… Several years ago, what they asked for was how to buy things for their families," she said. 

China's improved social security scheme, which guarantees lifelong medical insurance and pension benefits after retirement, has also diminished the need for elderly Chinese to have abundant savings in their later years.

"I will be given a 6,000-yuan retirement pension every month after retirement. The social welfare scheme raises my confidence for the future and lends me the courage to spend," said Chen Qiaozhu, 53, who lives in Xiamen, East China's Fujian Province.

Willingness to invest

China's booming dama economy also mirrors the rising social and economic status of women, as more and more well-educated and financially independent women, including older women, have gained a say on family wealth. 

Chen Qiaozhu, who budgets her family's spending, has been "cautiously testing the waters" in purchasing jewelry and precious metals as a way to preserve and increase family assets. 

In past years, Chen has bought several properties, not only in Xiamen, but also in Hangzhou, capital of East China's Zhejiang Province. Thanks to her "financial sense and instinct," her family wealth has at least doubled amid China's housing price hikes.

Now Chen has withdrawn from the real estate market as she says room for future appreciation is limited. "China's stock market has been too volatile to pour money into, so I have to find another hot spot for investment," Chen told the Global Times, adding she regrets "missing the golden era for investing in bitcoin."

She, like many affluent older women in China, feels insecure holding paper notes and is eager for more profitable investment channels. A manger at China Merchants Bank in Beijing's Chaoyang district surnamed Jie, told the Global Times that dama account for more than 70 percent of the clients who come to her for advice on purchasing wealth management products. 

As most of the dama generation's children have entered the workforce and could potentially face financial pressure when getting married and settling down, such investment is also a way to prepare money for their children, Jie said.  

Shen Jian, a 50-something retired teacher in a third-tier city in East China's Jiangsu Province, said she aspires to "prepare a dowry for her 27-year-old daughter." She used most of her savings to snag a two-year bond issued by the local government in June last year, with an annual interest rate of 8.8 percent. 

She did not disclose the exact amount she bought, but the threshold for purchasing such bonds is at least 1 million yuan.

Both Chen and Shen said they do not like to be identified as dama because such women are typically portrayed as uneducated, gossipy, short-sighted and brash investors. "As China's economy has progressed, the meaning of 'dama' has changed significantly now. Yes, we're energetic, but we're also elegant, eager for novel things and have a rational approach to investment," Chen stressed.

Capitalizing on the market

Traditionally considered savers, wealthy older Chinese women, who now boast growing consumption power, have become targets for different marketers who wish to mine gold in the "dama economy."

While travel agencies, such as CYTS and Ctrip, have launched personalized travel packages that include more shopping stops to appeal to the cohort, some industry players have also spotted plenty of opportunities in the most popular sport among dama: square dancing.

According to a report issued by e-commerce platform Taobao.com, the online monthly sales volume of square dance-related products such as clothes, shoes and audio products totaled 25 million yuan. Based on the figure, analysts estimated that the market for plaza dance-related products could be as large as 2 billion yuan every year. 

Almost all the dama the Global Times talked to said they dance in public squares at least twice a week during their spare time. Their obsession has given birth to apps that offer tutorials and provide a communication platform for middle-aged dancers, such as Tangdou Square Dance, which has been called the elderly version of the popular short-video platform Douyin. 

The app now has more than 200 million elderly users. To further make a profit, the app, based on its wide senior user base, is now exploring e-commerce models as well as other offline business models, such as dance training and tourism, Zhang Yuan, founder and CEO of Tangdou, told the Global Times. 

All industry insiders seemed to be thrilled to be capitalizing on the elderly cohort, whose spending power has largely been underestimated by the market.

"Maybe whoever wins the hearts of dama also wins the future," Jie said.

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