China’s Businesses Get Savvy About LGBT Community’s $300 Billion Spending Power

To harness the spending power of the country's sizable LGBT community, Alibaba recently sponsored a "We Do" promotion supporting gay marriage. Although the Chinese government hasn't been making much progress on its intolerance toward gay rights in China, brands are increasingly upping their efforts to show strong support to the country’s lesbian, gay, bisexual and transgender (LGBT) community as its spending power provides a significant source of growth. Referred to by some as the “pink yuan,” the purchasing power of China’s LGBT consumers is estimated to be around $300 billion, a number that’s set to only increase in the years to come as incomes rise across the mainland. This group is a significant part of a global community with purchasing power of a whopping $3 trillion annually. Despite the clear potential for brands to support the sizable LGBT community in China, high-profile local companies have been slow to join their global counterparts like Coca-Cola or Google in the United States. This is starting to change, however, with Alibaba launching its same-sex marriage campaign “We Do,” in partnership with PFLAG China and the Beijing LGBT Center. Travel is rapidly emerging as perhaps the greatest opportunity to engage the LGBT community in China, particularly urban residents with significant spending power. Alibaba’s promotion sent 10 same-sex couples on free trips to Los Angeles to enjoy honeymoons or legally marry in California, while its e-commerce platform Taobao sold holiday packages to five countries that have legalized same-sex marriage, and the owner of the popular Chinese app Blued recently announced plans to launch the online LGBT resource center Danlan.org. As Jacob Huang of the Aibai Center—a Beijing-based LGBT advocacy group—told Caixin this week, these increasingly supportive moves are “a good sign,” adding that they show “that it's a turning point for companies to realize that being open and diverse about the LGBT community is good for their business." Huang noted that companies need to understand the importance of the “pink yuan,” telling Caixin that "the next five or 10 years will see an explosion” in spending by the LGBT community in China. In the near term, look for travel companies to benefit the most from exponentially rising demand for outbound tourism among LGBT consumers in China. Travel e-commerce sites would be wise to create unique itineraries that focus on in-demand destinations in a tailored way, rather than a one-size-fits-all, group tour approach, and offer more than simple agendas that ultimately end up at the outlet mall.

China’s Businesses Get Savvy About LGBT Community’s $300 Billion Spending Power

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Published March 22, 2015

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China’s Businesses Get Savvy About LGBT Community’s $300 Billion Spending Power