Is the LGBT market being left out in China?

Chinese companies may finally be waking up to a huge market

Suit retailer Moss Bros captured headlines in the UK last year when it launched its ‘Mister and Mister’ campaign, timed to coincide with the country’s same-sex marriage law. Working in a similar vein, Coca-Cola used the Superbowl last year, which has 100 million viewers worldwide, to debut an advert that featured a gay couple taking their daughter rollerskating. The potential in targeting the gay community, or the ‘pink dollar’ as it is referred to in the US, is massive. Estimates put the annual purchasing power of the gay community at 870 billion USD in Europe and 750 billion USD in the United States.

But in China, it’s an area that has been largely absent from mainstream advertising. Often (though not always) gay consumers have more disposable income and less family responsibility, making them key target consumers.

‘If we assume 3-5 percent of the population is LGBT, China’s LGBT market is about 40-70 million people,’ says Charlie Gu, director at China Luxury Advisors. This estimate would make China the biggest LGBT market in the world in terms of numbers, if not in value – Hong Kong-based fund LGBT Capital has estimated China’s LGBT consumer market is worth at least 300 billion USD, and probably more.

An LGBT consumer survey by Chinese gay social platform ZANK found that Chinese gay consumers spend more on electronics, clothing and skincare than their heterosexual counterparts. Chinese gay consumers also tend to favour brands that are LGBT-friendly.

‘Take Apple as an example,’ explains Gu. ‘A majority of the respondents chose the iPhone as their preferred brand, a choice likely influenced by Apple CEO Tim Cook’s recent coming out and public support of the LGBT community. We also know that LGBT consumers are often trend influencers among their peers. Many of them work in creative industries such as PR, advertising, fashion and design. Winning the loyalty of LGBT consumers is therefore likely to create business impact beyond the “pink dollar”.’

So far, 2015 is marking itself as a year of change. A high-profile campaign launched by Chinese dating app Blued and supported by Taobao, the largest retail website in China, launched the ‘We Do!’ competition in February. Rolled out in time for Valentine’s Day, the contest offered ten gay couples the chance to fly to the US to get married, plus a seven-day honeymoon. Gay marriage is not yet legal in China, and thousands applied to tie the knot Stateside.

But one of the main problems around targeting China’s gay community is that it isn’t always entirely clear who they are. For various reasons, including cultural stigma, gay people don’t always come out of the closet here. Can you aim products at a community that doesn’t identify as a community?

‘Just because it’s not open and visible doesn’t mean that market is not spending or saving money,’ says Paul Thompson, founder of LGBT Capital. ‘They are, they’re just not doing it in a way that’s necessarily visible. We believe there are specialist needs for the LGBT community: one big example of this is partner protection. Throughout Asia really there is no law where anyone has any protection in law for their partnership, and so people getting the right advice is incredibly important. One of the factors which makes the LGBT market very different is that it’s one of the only market segments which is frequently difficult to identify – so when we start talking about targeting the LGBT sector; well, first you’ve got to find it.’ Certain sectors are already leading in terms of such marketing, including hugely successful gay travel agencies and LGBT financial advice services.

Steven Bielinski, founder of WorkForLGBT and Shanghai LGBT Professionals, argues that gay-targeted advertising is not uncommon in China, but is predominantly led by domestic companies and so slips under the radar of many international companies and media.

‘When it comes to internal HR practices, it is the multinational companies by far who are leading that area,’ he says. ‘But Western companies aren’t so familiar with the changes in the gay community in China. They just hear “LGBT in China” and think they don’t want to rock the boat, so most of the change in this area is coming from Chinese companies, and it’s done quietly; they are testing the water.’

‘Retailers worry that an openly LGBTinclusive campaign might tick off some non- LGBT consumers in a conservative country,’ agrees Gu. ‘I have seen some retailers playing on ambiguity to reach that balance. The lack of appearance of LGBT people in public media actually creates incredible opportunities for China’s leading LGBT social platforms such as ZANK, Blued and Les Park, because they have the unique channel to reach these consumers, and are often the trusted sources for lifestyle purchases.’

Taobao’s ‘We Do!’ campaign might have been the biggest so far to target the gay community, but in recent years there has been a marked increase in adverts from Chinese companies as they seize the opportunity to be at the forefront of this previously untapped market. Many adverts came out around Valentine’s Day that included LGBT models or references in their commercial campaigns, including some of China’s best-known corporate names such as Baidu, Didi Dache, Haier and DangDang.

Studies show that younger Chinese people are generally far more accepting of the LGBT community than their parents and increasing levels of Chinese tourism means they are more likely to experience gay communities abroad. ‘We might start to see Western brands who are traditionally LGBT-friendly begin to engage these consumers when they travel,’ suggests Gu. ‘I think we can also expect to see more Chinese brands begin to realise the hidden treasure they are sitting upon.’

Reflections of gay relationships in advertising campaigns are definitely a step in the right direction, agrees Bielinski. But he worries that some companies in China are just seeing this as a trendy marketing opportunity, without working to significantly advance the practical rights of LGBT people in the country.

‘A business has a deeper responsibility towards corporate culture,’ he says. ‘Younger generations in China want to work for diverse, open companies, where you can be completely open about your personal life. If they just put a rainbow flag on, say, a cup of coffee, but make no changes to their internal diversity policies, then it’s positive – but it’s not enough.'