What’s fueling the rise of ‘Sheconomy’?
Published: Jun 02, 2024 10:26 PM
Illustration: Chen Xia/GT

Illustration: Chen Xia/GT

According to global consultancy Accenture, China is home to nearly 400 million female consumers aged 20 to 60, whose annual spending accounts for as much as 10 trillion yuan ($1.4 trillion) and constitute the world's third-largest consumer market, whose size is equivalent to the value of the combined retail markets of Germany, France, and the UK. This Chinese "She economy" profoundly influences the transformation and trends of the global market. 

Based on data from QuestMobile, as of January 2024, the number of monthly active Chinese female users on the mobile internet reached 608 million, a year-on-year increase of 1.9 percent. Their consumption continuously improved as well, with 32.8 percent of female users spending over 2,000 yuan per month, a year-on-year increase of 2.2 percent.

What characterizes the Chinese "Sheconomy"?

First, it is a type of self-pleasing activity, both physically and psychologically. Apart from beauty and personal care, Chinese female consumers also pay more attention to emotional value and self-improvement. They favor goods that can help uplift their mood, such as fragrances. Regarding self-improvement, data from the JD Research Institute for Consumption and Industrial Development released in April 2023 shows that in, female consumers in China spent more on books, education, and training than men, accounting for a higher year-on-year growth rate in these sectors as well.

Second, it is rational and environmentally friendly. Women in China are pursuing cost-effectiveness and are no longer addicted to brand names. According to JD's 2023 Women Consumption Report, female consumers strongly prefer green products. Household appliances and home decoration building materials accounted for more than 90 percent of these green purchases made by female consumers. 

Third, the categories of consumption have expanded. QuestMobile's data showed that more women in China paid increasing attention to smart cars, sports, game livestreaming and automobiles compared to the number of the previous year. According to the 2024 Women's Car Market Insight Report released in March by the Yiche Research Institute, in 2023, female consumers bought 8.23 million vehicles  in China, up 10.62 percent year-on-year, ranking third in the world's market and vastly exceeding the total sales of Japan and Germany.

The demand is determined by two variables: disposable income and propensity to spend. In China, both indicators are changing evidently among the female population. 

For one thing, women are making more money in the country. Chinese women's total and per capita income are growing faster than those of men's. Based on statistic data from different recruitment websites, in the past five years, the annual growth rate of the income for women in China ranged from 4 to 7 percent, higher than their male counterparts' 1.7 to 6 percent. As a result, the income gap between men and women in China has rapidly narrowed from about 30 percent to around 15 to 25 percent. Why is this?

First, the female labor participation rate is increasingly and significantly faster in China. Compared globally, the labor force participation rate among Chinese women was 61 percent in 2022, which is higher than the world average and higher than that of developed countries such as the EU and the US.

Second, the education level of Chinese women has increased more significantly. The proportion of female undergraduate students gradually increased from 33 percent in 1990 to 50 percent in 2009. Based on the current number of college students (63 percent of whom were women in 2022), it is predicted that the average length of education for women may soon catch up with that of men or even surpass them. 

Third, women in China are delaying marriage and childbirth. According to relevant data from the United Nations and China's population census, the age of first marriage and childbirth for Chinese women has been postponed from 24 and 27.5 years old in 2010 to 28 and 29 years old in 2020. 

For another, Chinese women's propensity to spend has changed. The goal of consumption is to meet our material, symbolic, and interest needs. In contemporary society, when people's material and symbolic needs are satisfied, they will then seek to satisfy themselves emotionally and intellectually. Under such circumstances, consumers pay less attention to material needs and do not care much about others' opinions but are rather more concerned about their own inner desires and happiness. Therefore, women tend to spend more to please themselves. 

The internet society relies on information, sharing, empathy, and communication. In this respect, women's capabilities are naturally more robust than men's. It's no wonder that women are occupying an even more important position in the economy and the world order than previously. However, they will also continue to struggle with work-life balance, conflicting demands, and too little time.

The author is a faculty member with the School of Applied Economics, Renmin University of China.