Marketing to children china - november 2012

Marketing to Children - China - November
2012
INTRODUCTION
Methodology
Definitions
EXECUTIVE SUMMARY
Decreasing proportion of Chinese youngsters
Figure 1: Age structure of Chinese population, 2002-11
Multi-generational households
Figure 2: Household composition, by parents’ age, July 2012
Uptake of paid extra-curricular activities is high
Figure 3: Additional paid classes, July 2012
Nearly half of Little Emperors get pocket money from grandparents
Figure 4: Sources of child’s pocket money, July 2012
Necessities are prioritised
Figure 5: What monthly income is spent on average, July 2012
Children in Tier 1 cities lead technology ownership
Figure 6: Children’s product ownership, July 2012
A day in the life of a Little Emperor
Figure 7: A child’s day – average time spent on each activity, July 2012
MARKET BACKGROUND
Key points
How the phenomenon of The Little Emperors emerged
Evidence of gender imbalance
Figure 8: Age structure of Chinese population, by gender, 2002 and 2011
History of the One-Child Policy
Figure 9: China population statistics, 2011
Exceptions to the One-Child Policy
Figure 10: Urban exemptions to the One-Child Policy, 2011*
One child, six incomes
The emergence of the middle class
Early retirement leads to active involvement of grandparents
CURRENT LIVING SITUATION
Key points
Property ownership
Figure 11: Property ownership and number of bedrooms in the property, July 2012
Type of property owned
Figure 12: Type of primary residence, July 2012
Who Little Emperors live with
Figure 13: Household composition, by parents’ age, July 2012
Over nine in ten Little Emperors have their own space
Figure 14: Children’s living arrangements, July 2012
Presence of domestic help
Figure 15: Presence of domestic help in the household, July 2012
THE NEXT GENERATION OF LITTLE EMPERORS
Key points
Childcare arrangements
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Shanghai.
© Mintel Group Ltd. 1

Figure 16: Daycare arrangements, July 2012
Baby personal care purchases
Figure 17: Baby products bought in the past 12 months, July 2012
Preference for foreign brands of nappies
Figure 18: Brands of disposable nappies bought in the past 12 months, July 2012
Advertising illustrates benefits of wearing nappies
Parents look for 'natural' credentials
Figure 19: Attitudes towards nappies, July 2012
Baby food and drink purchases
Figure 20: How the child is fed, July 2012
Parents' anxieties fuel preference for foreign brands of baby formula
Figure 21: Brand of infant formula used, July 2012
Taking a baby around
Figure 22: Items used to transport the child, July 2012
Older parents focus on fitness of toddlers
Figure 23: Attitudes towards transport of the child, July 2012
EDUCATION OF LITTLE EMPERORS
Key points
Parents' educational aspirations for Little Emperors
Figure 24: Type of degree intended for child, July 2012
Parents aged 20-39 more likely to opt for private school
Figure 25: Type of school the child attends, July 2012
Extra-curricular activities enhance academic credentials
Figure 26: Additional paid classes, July 2012
Parents wish for a brighter future for their offspring
Figure 27: Willingness to fund the child’s studies abroad, July 2012
American institutions are favoured
Figure 28: Preferred country for child’s studies abroad, July 2012
Attitudes towards supporting children financially
Figure 29: Financial impact of covering child’s education, July 2012
SPENDING POWER OF LITTLE EMPERORS
Key points
Sources of children’s income
Figure 30: Sources of child’s income, July 2012
Fathers aged 40-49 most generous with offspring
Figure 31: Amount of monthly allowance, July 2012
Mothers require more discipline from Little Emperors
Figure 32: Condition monthly allowance is based on, July 2012
Higher-income families attach fewer conditions to pocket money
Figure 33: Condition monthly allowance is based on, by household income, July 2012
Children’s financial product ownership
Figure 34: Savings account and insurance policies set up for child, July 2012
Focus on education
Figure 35: Attitudes towards the child’s development and family finances, July 2012
Boys more vocal about what they want
Figure 36: Attitudes towards the child’s development and family finances, by gender of child, July 2012
FAMILY SPENDING HABITS
Key points
What families spend extra income on
Figure 37: Monthly discretionary expenditure, July 2012
Spending on necessities is prioritised
Figure 38: What monthly income is spent on average, July 2012
Clothing purchases for children
Shanghai.

Figure 39: Branded children’s clothing bought, July 2012
Girls prefer international brands of casualwear
Figure 40: Sportswear brands bought for child, July 2012
Attitudes towards buying clothes for children
Figure 41: Attitudes towards child’s clothing, July 2012
Dads are more lenient with Little Emperors
Figure 42: Attitudes towards child’s clothing, by gender of parent, July 2012
Children’s device ownership
Figure 43: Children’s product ownership, July 2012
Children’s mobile phone ownership
Figure 44: Brand of smartphone owned by child, July 2012
FAMILY LEISURE AND HOLIDAY HABITS
Key points
Family holiday habits
Figure 45: Holidays taken in the past 12 months, July 2012
Overseas travel is growing
Family leisure activities
Figure 47: Family leisure activities done regularly, July 2012
A DAY IN THE LIFE OF A LITTLE EMPEROR
Key points
A child’s typical day
Figure 48: A child’s day – average time spent on each activity, July 2012
Who takes care of children?
Figure 49: The child’s support network, July 2012
How connected are children with other family members?
Figure 50: People the child spends time with – average time spent with each, July 2012
APPENDIX – CURRENT LIVING SITUATION
Figure 51: Type of primary residence, by demographics, July 2012
Figure 52: Number of bedrooms in property, July 2012
Figure 53: Number of bedrooms in property, by demographics, July 2012
Figure 54: Type of property ownership, by demographics, July 2012
Figure 55: Household composition, by demographics, July 2012
Figure 56: The child’s living arrangements, July 2012
Figure 57: The child’s living arrangements, by demographics, July 2012
Figure 58: Presence of domestic help, July 2012
Figure 59: Presence of domestic help, by demographics, July 2012
Figure 60: Presence of domestic help, by demographics, July 2012
APPENDIX – THE NEXT GENERATION OF LITTLE EMPERORS
Figure 61: Daycare arrangements, July 2012
Figure 62: Daycare arrangements, by demographics, July 2012
Figure 63: Baby products bought, July 2012
Figure 64: Most popular baby products bought, by demographics, July 2012
Figure 65: Next most popular baby products bought, by demographics, July 2012
Figure 66: Other baby products bought, by demographics, July 2012
Figure 67: Brands of disposable nappies bought, July 2012
Figure 68: Most popular brands of disposable nappies bought, by demographics, July 2012
Figure 69: Next most popular brands of disposable nappies bought, by demographics, July 2012
Figure 70: Other brands of disposable nappies bought, by demographics, July 2012
Figure 71: Attitudes towards nappies, July 2012
Figure 72: Most popular attitudes towards nappies, by demographics, July 2012
Figure 73: Next most popular attitudes towards nappies, by demographics, July 2012
Figure 74: How the child is fed, July 2012
Figure 75: Most popular how the child is fed, by demographics, July 2012
Figure 76: Next most popular how the child is fed, by demographics, July 2012
Figure 77: Brand of infant formula used, July 2012
Figure 78: Most popular brand of infant formula used, by demographics, July 2012
Figure 79: Next most popular brand of infant formula used, by demographics, July 2012
Shanghai.

Figure 80: Items used to transport the child, July 2012
Figure 81: Car seat/booster car seats used to transport the child, by demographics, July 2012
Figure 82: Pushchair/buggy used to transport the child, by demographics, July 2012
Figure 83: Sling used to transport the child, by demographics, July 2012
Figure 84: Back carriers used to transport the child, by demographics, July 2012
Figure 85: Travel cot used to transport the child, by demographics, July 2012
Figure 86: Attitudes towards transport of the child, July 2012
Figure 87: Most popular attitudes towards transport of the child, by demographics, July 2012
APPENDIX – EDUCATION OF LITTLE EMPERORS
Figure 88: Type of degree intended for child, by demographics, July 2012
Figure 89: Type of school the child attends, by demographics, July 2012
Figure 90: Most popular additional classes paid for, by demographics, July 2012
Figure 91: Next most popular additional classes paid for, by demographics, July 2012
Figure 92: Most popular willingness to fund the child’s studies abroad, by demographics, July 2012
Figure 93: Most popular financial impact of child’s education, by demographics, July 2012
Figure 94: Next most popular financial impact of child’s education, by demographics, July 2012
Figure 95: Agreement with the statements ‘Independence is an important treat a child has to learn’ and ‘I am
teaching trying to teach my child to be independent’, by demographics, July 2012
Figure 96: Agreement with the statements ‘I would like to offer my child a carefree childhood free from
pressure’ and ‘I don’t want my child to feel pressured all the time’, by demographics, July 2012
Figure 97: Agreement with the statements ‘I want my child to focus on its education instead of wasting time
on activities such as watching TV’ and ‘Study is the most important activity for my child’, by demographics,
July 2012
Figure 98: Agreement with the statements ‘If I want to buy something for myself, I first check if I cannot
better spend that money on my child’ and ‘I am concerned about my child’s ability to live independently after
it leaves home’, by demographics, July 2012
Figure 99: Agreement with the statements ‘My child has a significant influence on household decisions ie what
food is bought, where to go on holiday etc’ and ‘I need to purchase a property for my child before he/she gets
married’, by demographics, July 2012
Figure 100: Agreement with the statements ‘I am worried about our financial situation if I try to fulfil all my
child’s needs’ and ‘I cut back on household expenditures to pay for items my child would like to have’, by
demographics, July 2012
Figure 101: Agreement with the statements ‘I want my child to pursue the career that we as parents have
chosen for him/her’ and ‘My child will always be able to rely on us financially independent of his/her age’, by
Figure 102: Agreement with the statement ‘I am likely to struggle financially once my child grows older’, by
Figure 103: Most popular attitudes towards the child’s development and financial burden (any agree), by
Figure 104: Next most popular attitudes towards the child’s development and financial burden (any agree), by
Figure 105: Other attitudes towards the child’s development and financial burden (any agree), by
APPENDIX – SPENDING POWER OF LITTLE EMPERORS
Figure 106: The child’s income, by demographics, July 2012
Figure 107: Condition monthly allowance is based on, by demographics, July 2012
Figure 108: Savings account set up for child, by demographics, July 2012
Figure 109: Insurance policies set up for child, by demographics, July 2012
Figure 110: Type of degree intended for child, by demographics, July 2012
Figure 111: Type of school the child attends, by demographics, July 2012
Figure 112: Most popular additional classes paid for, by demographics, July 2012
Figure 113: Next most popular additional classes paid for, by demographics, July 2012
Figure 114: Most popular willingness to fund the child’s studies abroad, by demographics, July 2012
Figure 115: Most popular financial impact of child’s education, by demographics, July 2012
Figure 116: Next most popular financial impact of child’s education, by demographics, July 2012
Figure 117: Agreement with the statements ‘Independence is an important treat a child has to learn’ and ‘I
am teaching trying to teach my child to be independent’, by demographics, July 2012
Figure 118: Agreement with the statements ‘I would like to offer my child a carefree childhood free from
pressure’ and ‘I don’t want my child to feel pressured all the time’, by demographics, July 2012
Figure 119: Agreement with the statements ‘I want my child to focus on its education instead of wasting time
on activities such as watching TV’ and ‘Study is the most important activity for my child’, by demographics,
July 2012
Shanghai.

Figure 120: Agreement with the statements ‘If I want to buy something for myself, I first check if I cannot
better spend that money on my child’ and ‘I am concerned about my child’s ability to live independently after
it leaves home’, by demographics, July 2012
Figure 121: Agreement with the statements ‘My child has a significant influence on household decisions ie
what food is bought, where to go on holiday etc’ and ‘I need to purchase a property for my child before he/she
gets married’, by demographics, July 2012
Figure 122: Agreement with the statements ‘I am worried about our financial situation if I try to fulfil all my
child’s needs’ and ‘I cut back on household expenditures to pay for items my child would like to have’, by
Figure 123: Agreement with the statements ‘I want my child to pursue the career that we as parents have
chosen for him/her’ and ‘My child will always be able to rely on us financially independent of his/her age’, by
Figure 124: Agreement with the statement ‘I am likely to struggle financially once my child grows older’, by
Figure 125: Most popular attitudes towards the child’s development and financial burden (any agree), by
Figure 126: Next most popular attitudes towards the child’s development and financial burden (any agree), by
Figure 127: Other attitudes towards the child’s development and financial burden (any agree), by
APPENDIX – FAMILY SPENDING HABITS
Figure 128: Most popular branded children’s clothing bought, by demographics, July 2012
Figure 129: Next most popular branded children’s clothing bought, by demographics, July 2012
Figure 130: Sportswear brands bought for child, July 2012
Figure 131: Most popular sportswear brands bought for child, by demographics, July 2012
Figure 132: Next most popular sportswear brands bought for child, by demographics, July 2012
Figure 133: Most popular attitudes towards child’s clothing, by demographics, July 2012
Figure 134: Next most popular attitudes towards child’s clothing, by demographics, July 2012
Figure 135: Most popular products in child’s possession, by demographics, July 2012
Figure 136: Next most popular products in child’s possession, by demographics, July 2012
Figure 137: Other products in child’s possession, by demographics, July 2012
Figure 138: Brand of smartphone owned by child, July 2012
Figure 139: Most popular monthly discretionary expenditure, by demographics, July 2012
Figure 140: Next most popular monthly discretionary expenditure, by demographics, July 2012
Figure 141: Other monthly discretionary expenditure, by demographics, July 2012
Figure 142: What monthly income is spent on, July 2012
Figure 143: Most popular what monthly income is spent on, by demographics, July 2012
Figure 144: Next most popular what monthly income is spent on, by demographics, July 2012
APPENDIX – FAMILY LEISURE AND HOLIDAY HABITS
Figure 146: Most popular any holidays taken in the past 12 months, by demographics, July 2012
Figure 147: Next most popular any holidays taken in the past 12 months, by demographics, July 2012
Figure 148: Other any holidays taken in the past 12 months, by demographics, July 2012
Figure 149: Leisure activities, July 2012
APPENDIX – A DAY IN THE LIFE OF A LITTLE EMPEROR
Figure 150: A child’s day – overview, July 2012
Figure 151: A child’s day – overview, July 2012
Figure 152: People the child spends time with, July 2012
Figure 153: Attitudes towards children’s discipline and upbringing, July 2012
Shanghai.

Consumer Lifestyles: Meet the Little
Emperors - China - November 2012
Introduction
More than eight in ten Chinese families in tier 1 and tier 2 cities now have only one
child, the so-called “Little Emperor”. As parents don’t get a second chance to
conceive, the pressure not to fail in raising their only child is intense. It created the
now infamous images of the rather stereotypical, but not wholly inaccurate,
representation of ‘Tiger Mums’. These mothers tend to be hyper-involved in all
aspects of their children’s upbringing and push their Little Emperors towards
academic success, even at the expense of their leisure time.
This pressure to succeed leads to a heavy investment in babies and young children,
in order to improve their education, career and future earnings prospects, whilst also
catering to their every need. However, as a result of mollycoddling, children develop
expectations of their own as to what they should be provided with as they grow up.
This report delves into how the modern urban Chinese middle class family operates
and structures itself around the single child, which is crucial to understanding how to
design, market and sell a range of products and services to this important consumer
segment. Quite simply, brands and manufacturers ignore the Little Emperor at their
peril.
Methodology
Mintel conducted online consumer research in July 2012 on a sample of 1,500
internet users aged 20-49 who are classified as middle class with one child aged
under 16.
Definitions
Research carried out for this report identifies members of the middle class by the
following characteristics:
● Minimum Personal income: RMB7,000 (US$1,110) per month in tier 1
cities; Minimum RMB5,000 (US$793) per month in tier 2 cities
● Minimum Family income: RMB15,000 (US$2,379) per month in tier 1
cities; Minimum RMB10,000 (US$1,586) per month in tier 2 cities
● Profession: white-collar office workers in either state or private business,
self-employed or SME business owners
● Education: college level degree holders or above
● Assets: property owners (must own property or be paying mortgage on a
property)
● Own a car.
To ensure that we dealt with those middle class Chinese who were part of sizeable
middle-income communities and so could display shared patterns of consumption
Shanghai.

rather than being the exception within their immediate community, we only surveyed
consumers in Shanghai, Beijing, Guangzhou, Chengdu and Nanjing. So, for instance,
cities such as Xian or Hefei were excluded as, although there are middle-income
consumers in these cities, they do not have the number or spread of retailers, brands
and services to compare with those cities chosen as yet. We have also excluded cities
where many middle-income people live, such as Shenzhen and Dongguan, on the
grounds that they are majority transient/migratory manufacturing cities and so skew
survey results and do not really represent a settled middle class community.
Shanghai.

Executive Summary
“China’s ‘Little Emperors’ are the youth of the country’s nascent
emerging middle class. Growing up in families with higher-than-
average discretionary incomes, no siblings and active grandparents,
they are the beneficiaries of rising expenditure on children. However, a
rigid education system and a heavy burden of expectation means that
they are under pressure to succeed while the absence of ‘second
chance parenting’ leads many parents to seek to protect their child
through spending on items that they believe will safeguard their
future.”
-Matthew Crabbe, Research Director, Mintel Asia-Pacific
Shanghai.

Decreasing proportion of Chinese youngsters
FIGURE 1: Age structure of Chinese population, 2002-11
Source: National Bureau of Statistics/Mintel
China is still the world’s most populous nation, with 1.3 billion adults or 19% of the
world’s population overall. Falling birth rates and improved life expectancy mean that
the population will have an older skew in the near future, prompting concerns about
the reduction in the nation’s workforce and the ability to support the growing elderly
population.
The National Bureau of Statistics forecasts that the population of those aged 12-19
will decline by 18.2% by 2020, compared with 2010. The proportion of youngsters is
set for even further declines by 2050.
Shanghai.

Multi-generational households
FIGURE 2: Household composition, by parents’ age, July 2012
Base: 1,500 internet users aged 20-49 who are classified as middle class with one
child aged 0-16
Source: QQSurvey/Mintel
Home ownership is a prerequisite for starting a family, thus all Chinese middle class
families own their home either outright or on a mortgage. Houses are uncommon
(8%), with over eight in ten families living in condos or apartments.
The urban middle class tend to dwell in multi-generational homes. Approximately a
quarter of the middle class Little Emperor households Mintel surveyed had parents or
in-laws also residing with mother, father and Little Emperor. Younger couples tend to
be more likely to have their parents living under the same roof, as younger children
require more intensive care/help from grandparents.
Shanghai.

Uptake of paid extra-curricular activities is high
FIGURE 3: Additional paid classes, July 2012
Base: 839 internet users aged 20-49 who are classified as middle class with one child
aged 5-16
High academic expectations result in intense competition for university places; thus
nearly nine in ten children in Chinese middle class families are involved in some kind
of paid extra-curricular or after-school activities. Such activities often enhance core
academic credentials and serve as differentiators for university entry.
Looking beyond the domestic higher education sector, a third of Chinese urban
middle class parents are willing to finance their child’s postgraduate studies abroad
and a slightly smaller proportion would pay for their child’s undergraduate degree
overseas. Despite the exorbitant fees and cost of living, American institutions are
favoured by six in ten Chinese parents.
Shanghai.

Nearly half of Little Emperors get pocket money from grandparents
FIGURE 4: Sources of child’s pocket money, July 2012
aged 5-16
Nearly all Little Emperors receive a monthly allowance, with older parents and in
particular mums aged 40-49 being the most generous with their offspring (98%).
This is likely owing to the fact that parents in this age group are considerably
wealthier compared with the younger ones.
The six-pocket phenomenon comes to the fore in this instance, with grandparents
highly likely to chip in (50%), whilst other family members also play their part
(20%).
Amount of monthly pocket money is positively correlated with household income. In
addition, families living in Beijing (China’s most affluent city) appear to be the most
generous with their Little Emperors, as over three in ten (31%) give their children
pocket money in excess of RMB500 a month.
Shanghai.

Necessities are prioritised
FIGURE 5: What monthly income is spent on average, July 2012
child aged 0-16
NB: housing includes mortgage, bills, home maintenance, Food and drink includes all
food and drink expenditures in and out of home, Transport includes car fuel, train
fares, Finance includes monthly saving, insurances, account fees, Leisure,
Entertainment and Technology for your household includes electronic gadgets, dining
out, theatre tickets, Holidays and travel includes airplane tickets, hotel fees,
Spending on the child includes costs for education, afternoon classes, treats, clothes
Chinese middle class families invest the largest share of their monthly disposable
income on savings, investments and financial products (17%) to provide for
pensions, healthcare and educations etc.
Over a tenth (11%) of monthly incomes is spent on the needs of children, with
younger parents (aged 20-29), who tend to have lower disposable incomes, spending
proportionately more (15%). In particular, as the main income providers, males aged
20-29 are especially likely to contribute nearly a fifth of their incomes, at 19%.
Shanghai.

Children in Tier 1 cities lead technology ownership
FIGURE 6: Children’s product ownership, July 2012
aged 5-16
Over nine in ten Little Emperors have their own bedrooms, which is fully stocked with
toys and electronics devices. Desktop, laptop and tablet computers are amongst the
most popular devices, as they can also be used to help with studying. Tablet (47%)
ownership is now higher than laptop ownership (44%) amongst Chinese middle class
children, largely owing to greater portability and interactivity.
Tier 1 kids have more electronic items than those in tier 2 for reasons of cost, though
TVs are more common in tier 2 cities and are widely available across China at
relatively low prices. Similarly other novelty items such as eReaders are more
commonly found in children’s bedrooms in tier 1 cities (53% in Beijing) as opposed
to tier 2 locations (just 33% in Nanjing).
Shanghai.

A day in the life of a Little Emperor
FIGURE 7: A child’s day – average time spent on each activity, July 2012
Commuting to school, classes, extra-curricular activities and homework take up on
average eight hours each day, meaning that a large chunk of a Little Emperor’s day
is spent on activities related to their education. This is hardly surprising, considering
that six in ten parents indicate that they want their child to focus on studying rather
than wasting their time on things like watching TV.
As mothers and fathers are typically the ones most heavily involved in taking care of
their offspring, it makes sense that parents and family tend to spend 10% of their
time with their Little Emperor.
Shanghai.

Market Background
Key points
● The emergence of the Little Emperors is directly linked to the high
proportion of one-child families in China.
● Growth in the Chinese middle class gave rise to increased
consumption and rising aspirations towards product ownership,
further fuelling the trend of families catering to the wishes of their
only children.
● Lower age of retirement (between 50 and 55) amongst Chinese
women paves a way for grandparents to get involved in child caring
as well as spending on their Little Emperor grandchildren.
How the phenomenon of The Little Emperors emerged
China’s so-called Little Emperors are the generation of single children born largely in
the 1990s and 2000s. The term ‘Little Emperor Syndrome’ came to be widely used in
China in the 1990s to describe those single children who appeared to be the
recipients of excessive amounts of attention from their parents and grandparents.
Although China had enacted the One-Child Policy in 1979, it was not really until the
1990s that a Chinese urban middle class with significant amounts of disposable
income came into existence in the country’s tier 1 and tier 2 cities able to lavish
spending and attention on their single children. In essence, the Little Emperors were
the result of a combination of the One-Child Policy twinned with the rise of a
substantial middle class in urban China (see Mintel’s Consumer Lifestyles: China’s
Middle Class – China, June 2012).
Shanghai.

Evidence of gender imbalance
FIGURE 8: Age structure of Chinese population, by gender, 2002 and 2011
NB: Numbers may not sum due to rounding
Source: National Bureau of Statistics/Mintel
China, of course, is still the world’s most populous nation, and has the second-
highest number of young people in the world, behind India (a country with a very
different family planning regimen and no One-Child Policy). However, China has the
most severe gender imbalance with a male-to-female gender ratio among young
people up to the age of 19 of 1.14, suggesting that for every 100 boys there are just
88 girls.
Perhaps this gender imbalance becomes more relevant at a later – post-teen – stage,
but it does reinforce the perception that boys are considered more desirable by
families than girls and has a host of inherent implications for society, child raising
practices and spending on children as shown below.
History of the One-Child Policy
FIGURE 9: China population statistics, 2011
Birth rate 12.31 births per 1,000 population
Death rate 7.17 deaths per 1,000 population
Shanghai.

Sex ratio (at birth) 1.14 male(s)/female
Infant mortality rate 15.62 deaths per 1,000 live births
Population growth rate 0.481%
China’s One-Child Policy was launched in 1979 after the population topped 1 billion.
China's fertility rate dropped from 5.8 children per woman in 1970 to 2.7 in 1978
and the government believes the One-Child Policy curtailed population growth by
preventing 400 million extra births (approximately the total population of China in
1937).
In some circumstances, families are exempt from the One-Child Policy and today,
only 20% of children under 14 are from single-child families according to the State
Population and Family Planning Commission (SPFPC). However, the policy has been
most effective in cities rather than the countryside and consequently the number of
one-child families is far higher, at above 80% in most tier 1 and 2 cities.
In urban China, residents have faced heavy fines and can lose their jobs if they have
a second child. Many increasingly financially stretched couples now prefer fewer
children and cannot afford, nor have room for, any more. But in the countryside,
where parents depend on children to help them and support them in their old age,
there is still a preference for multiple children. Rural families in China have been
targeted with inventive campaigns to encourage family planning, including being paid
not to have more children, or campaigns in the countryside attempting to appeal to
fledgling entrepreneurs.
Exceptions to the One-Child Policy
FIGURE 10: Urban exemptions to the One-Child Policy, 2011*
Source: State Population and Family Planning Commission/Mintel
If both parents are from one-child families – ie both are single children
Both parents are university graduates
The first child is severely handicapped or disabled
An RMB50,000 (US$8,000) fee is paid (applies to migrants to urban areas)
A Chinese citizen is married to a foreigner
Twins
Adoption
Registered as an official category of ethnic minority (小数民族 xiaoshu minzu – and
therefore exempt entirely from the One-Child Policy)
China’s rapidly changing demographic profile with a falling birth rate and enhanced
longevity suggests that the country’s population pyramid will increasingly trend
towards an older society in the coming decades. The National Bureau of Statistics
has indicated that it expects that China’s population of 12-19-year-olds will drop by a
significant 18.2% over 2010 by 2020. China’s teenage population is set to decline
further still to approximately 9.1% of the total population in 2050, from 13.8%
today.
The government has introduced various exemptions to the One-Child Policy in
China’s major cities (though to a far lesser extent in the countryside). Despite this it
seems that the Little Emperor-led model three-person household will remain the
Shanghai.

dominant form of family unit for some time to come among the rising urban middle
class – a Shanghai Academy of Social Sciences survey in 2011 found that over 90%
of Shanghai couples are now eligible to have more than one child, but that 45% of
families had ruled it out as an option due to cost, apartment size and that they were
simply used to three-person families.
One child, six incomes
In essence the Little Emperors (小皇帝 xiao huangdi) were the result of the One-Child
Policy twinned with the rise of a substantial middle class in urban China with greater
rates of disposable income to spend. The traditional preponderance in urban areas
for women to work (an over 70% female labour force participation rate in China’s
major cities) means many middle class families with one child now have two sources
of income while a combination of increased longevity and low retirement ages, by
international standards, means many Little Emperors have four active and supportive
grandparents.
This led to the so-called ‘six-pocket syndrome’, or the ‘four-two-one’ family structure,
with six disposable incomes available to be lavished on the one child. This is, of
course, a change in the traditional family structure in China – based on the Confucian
system and extended in nature – of power in a household being devolved in a
patrilineal form from the father, to the mother and a multitude of offspring with
supporting aunts, uncles and grandparents. Invariably now in urban middle class
China the modern household structures entirely around the regulation one child – the
Little Emperor.
This greater devotion of spending on one child, and the general funnelling of financial
resources downwards within the family, is significant to the development of China’s
urban consumer market overall. In many obvious categories, from toys to snacks
and gadgets to children’s clothes, parents shower their single child with material
goods and give in to every demand from their offspring; it is not uncommon for
children to be the ‘best-dressed members of their families’. Data collected exclusively
for this report show that nearly two thirds of Chinese parents agree that if their child
wants an item of clothing they would generally purchase it, and over a quarter want
to buy the best brands for their only child (see Family Spending Habits section).
National Bureau of Statistics’ forecasts expect China’s teenage per capita disposable
income to rise to about RMB10,500 (US$1,665) by 2014. That equals to an
estimated RMB875 (US$139) per month, not including what their families spend on
them. This is approximately 10% of a tier 1 household average income and it seems
likely that any amounts given to children by parents are being added to and
supplemented by contributions from grandparents and other family members.
Little Emperors have been influential in many other areas of family spend – where
the family eats out, goes on holiday, the car they purchase, etc. This can be due to
excessive pandering to the child’s wants and desires or simply giving in to pester
power. It is also the case that, while high expectations to succeed are placed upon
the single child, there are also high expectations on the parents to provide. For
example, Mintel data show that nearly six in ten (58%) Chinese parents started
saving early for their children’s education, in order to be able to afford to send them
to the best university (see Spending Power of Little Emperors section).
Shanghai.

The emergence of the middle class
The Little Emperor phenomenon would not have been possible without the rise of a
Chinese urban middle class, undoubtedly the biggest driver of much of the growth of
consumption in China.
Mintel defines the Chinese middle class as those people who are urban, invariably
white-collar workers and have a household income of approximately US$9,000-
30,000. As of 2011 there were about 30 million households in China falling into the
middle class description – that’s approximately 13.5% of all urban households in
China.
Given that a household is typically mum, dad and a Little Emperor, that makes the
middle class roughly 100 million people. Above that there are higher earners –
Golden Collars – adding a few million more (including their own Little Emperors) and
below that those now considered 小康 xiaokang (or “comfortable”) who hope to move
up into the middle class and raise their own Little Emperors with them.
With current wage growth, urbanisation and rising living costs, we expect the
number of middle class households to comfortably break the 35 million mark by 2015
– making approximately 15% of urban Chinese middle class households totalling 105
million people.
Assuming the average and dominant household structure to be three people, this
means there are approximately 35 million Little Emperors in the middle class, plus an
undefined number in the Golden Collar social class and a fledgling group of Little
Emperors in the xiaokang social class. This would roughly add up to an estimated 50
million or more Little Emperors.
Early retirement leads to active involvement of grandparents
According to China’s National Bureau of Statistics, women (who constitute fully
48.5% of China’s total population) tend to be employed if of working age. Over seven
in ten urban women aged 18-64 are employed and the employment rate of mothers
aged 25-34 with a child under the age of 6 is 72%. This is higher than many other
developing and developed countries and means that ‘stay-at-home’ mothers are rare.
The retirement age for women in China is low by international standards. The
mandatory statutory retirement age for women in the private sector is 50 years of
age for non-managerial positions and 55 years of age for managerial roles.
Life expectancy is improving and in 2011 it was 72.82 years for males and 77.11
years for females, whilst the mean age of marriage for women in China is now 24
years old with children coming, on average, within the next three years.
All of the above means that urban women marry relatively young, overwhelmingly
have one child while in their later twenties and have parents who have retired at
50/55 (or 60 universally for males). This means that grandparents are taking on a
large part of childrearing and are intimately involved in the development of their
grandchild, with many assuming the routine primary care responsibility and much of
the spending associated with those early years.
Shanghai.

Current Living Situation
Key points
● Home ownership is viewed as a prerequisite for starting a family,
thus all Chinese middle class families own their primary residence,
with nearly six in ten owning it outright.
● Grandparents play an increasingly important role in children’s
upbringing, especially as the costs of hiring domestic help are
becoming less affordable. This is especially true of younger parents
aged 20-29, three in ten of whom have their grandparents living with
them.
● Over nine in ten Little Emperors have their own room, which could
improve their concentration, but could also require more supervision
from parents or grandparents, or domestic help in their absence.
● Only under a quarter of Chinese middle class households have no
plans for hiring help around the house, with the tendency to have
domestic helpers rising substantially with household incomes.
Property ownership
FIGURE 11: Property ownership and number of bedrooms in the property, July 2012
“Is your property owned outright or bought on a mortgage?”
“How many bedrooms are there in the property you live in? Please only count the
number of fully enclosed bedrooms, not counting the living room as bedroom unless
it is a studio apartment.”
Shanghai.

child aged 0-16 and own a property
Given the expectations that home ownership is a prerequisite for marriage and
having children, all middle class families own their homes, with the majority (59%)
buying their property outright. This is especially evident amongst families with the
highest level of household income (RMB25,000+), at 73%.
Over half (54%) residences occupied by the Chinese middle class families have three
bedrooms and a further 23% have four or more bedrooms, allowing children,
grandparents and any live-in domestic helpers to get their own space. The higher the
income, the more spacious is the home a family can afford, with over a third (36%)
of households with incomes in excess of RMB25,000 who have four bedrooms or
more in their home.
Type of property owned
FIGURE 12: Type of primary residence, July 2012
“Thinking about your current living arrangements, which of the following best
describes your primary residence?”
Shanghai.

child aged 0-16
Over eight in ten properties owned by the Chinese middle class families are condos
or apartments, whilst only 8% own a house. House ownership is most common
amongst families living in Shanghai (10%) and Nanjing (13%), and has a high
positive correlation with household income.
This finding illustrates that, whilst modern Chinese households may aspire towards
owning a bigger property, owning a house is out of reach for all but a small minority
of wealthy middle class families. Overwhelmingly, over half (56%) of families with
the highest incomes (RMB25,000+) have at least one parent with a postgraduate
qualification.
This sheds a light on just how important higher educational attainment is in modern
Chinese society. It also puts into perspective parents’ adamant desire for their
children to go to a good university and succeed academically. Mintel data show that
nearly six in ten (58%) parents started saving money for their children’s education
early on, and over half (56%) are prepared to spend a significant amount of money
to ensure their children compete with the best academically (see Education of Little
Emperors).
Shanghai.

Who Little Emperors live with
FIGURE 13: Household composition, by parents’ age, July 2012
child aged 0-16
The urban middle class are increasingly living in multi-generational homes.
Approximately a quarter of the middle class Little Emperor households Mintel
surveyed had parents or in-laws also residing with mother, father and Little Emperor.
Younger couples tend to be more likely to have their parents living with them under
the same roof. Of course their parents are more likely to be alive but also this is the
time when intensive childcare is most required. Therefore among parents aged 20-29
the rate of live-in grandparents was 30%.
Among lower-income middle class households, with monthly household incomes of
RMB10,000 (US$1,585) and below, grandparents were more likely to be living with
the family. Outside childcare options, such as private or boarding kindergartens or
more full-time childcare/domestic help such as ?姨 ayis, are less affordable to this
group.
Household composition also varies by region. Guangzhou, with its distinctive
Southern atmosphere and Cantonese culture (with a perhaps more traditional and
very strong emphasis on inter-familial ties) has far higher rates of live-in
grandparents, at 36%, than Eastern and Northern cities.
It could be that many families in other cities may have grandparents and in-laws in
other cities or parts of the country due to widespread internal migration patterns and
Shanghai.

urbanisation. It may be that these grandparents do not care to migrate to another
city, leave the countryside or simply cannot make this move to live with their
grandchildren due to China’s rigid internal passport system (户口 hukou) denying
them permanent city residency.
Caring for grandchildren is a common experience for many Chinese grandparents
who are thought to display a general desire for their grandchild to experience the
benefits they themselves were denied during the less economically developed times.
It may also be the case that grandparents know less about issues such as diet, good
paediatric health and childrearing trends and so tend to spoil children more.
Mintel data show that even though parents are primarily responsible for taking care
of their offspring, over a quarter (26%) of grandparents buy treats for their children,
over a fifth (23%) prepare their meals and nearly a fifth (19%) do their clothes
shopping (see A Day in the Life of a Little Emperor section).
Over nine in ten Little Emperors have their own space
FIGURE 14: Children’s living arrangements, July 2012
“Does your child have his/her own room in your household?”
child aged 0-16
With most middle class Chinese apartments having only two bedrooms (though often
claimed as three due to the common practice of subdivision by curtains in the living
room), and because of the One-Child Policy, this means that most Little Emperors do
actually get their own rooms and personal living space. The ability for the child to
have their own individual space and the ability to stamp their personal interests and
Shanghai.

hobbies on their room fosters their imagination, whilst also encouraging pester power
to develop at a faster rate.
Over 90% of Little Emperors have their own bedroom – a statistic that holds the
same for girls as well as boys despite the tendency to often spoil boys and favour
them more. Older children are more likely to have their own space, as they would
need more privacy to be able to focus on their studies. Nearly all (98%) children
aged 10-16 have their own bedroom.
Additionally, this high rate of having their own room is the case across China, with
similar rates exhibited in Nanjing as well as Guangzhou, Beijing and Shanghai.
Chengdu has a slightly lower rate, at 95%, and this is explained by the fact that the
layout of the city has allowed for slightly larger apartments and a greater
preponderance of rare, and much sought-after, three-bedroom apartments.
Having their own bedroom gives Little Emperors a chance to concentrate on their
studies, however, this will also lead to many opportunities for distraction. Mintel data
show high device ownership amongst children and, with parents easily swayed by
pester power, ownership of games, toys and other modes entertainment is also high.
This means there will be a particularly strong market for online and mobile
applications/software that lets parents monitor their children’s activities as well as
parental blocks or software that allows younger kids to browse safely.
Presence of domestic help
FIGURE 15: Presence of domestic help in the household, July 2012
“Have you hired or are you interested in hiring an ’ayi‘ (ie domestic help or maid) to
help looking after your child and support you with household chores at home?”
child aged 0-16
Shanghai.

Hired domestic helpers have been playing a greater role in children’s upbringing,
linked with the high proportion of parents in full-time employment. In China this
takes the form of the ayi who are typically from outside the family, though may live
in the house or close by. Rather than the more Western tradition of domestic help
being divided into specific responsibilities – cleaner, babysitter, nanny etc – ayis
(literally “auntie”, and in Guangzhou and Southern Cantonese-speaking China an ?嬷
amah) take on a multitude of tasks including cleaning, cooking, daily shopping and
childcare. They can sometimes be the sole carer for the child during the day when
parents are working or share these duties with the grandparents.
Over half (55%) of middle class parents surveyed have some form of domestic help.
Though, as with all living costs and salaries, their affordability may now be less than
a decade ago, they are still seemingly ubiquitous in tier 1 middle class households.
Ayis are more often than not migrant women and therefore relatively inexpensive,
the employment arrangements are invariably ad-hoc and unofficial. This means no
taxes or social welfare payments are involved, and their employment is a private
matter between themselves and the employing family.
Live-in ayis are in the minority, with only 14% of families having such arrangements,
with the small number likely explained by the small apartment sizes. Domestic help
that don’t live with the family are much more common, with over a third (36%) of
families employing such help either full-time or part-time.
The tendency to have domestic help increases with household income, as over seven
in ten (73%) families with the highest household incomes (RMB25,000+) have hired
help either part-time or full-time. On the other hand, lower-income households are
relatively more likely to have grandparents living with them and fulfilling most of the
functions of a domestic helper.
Shanghai.

The Next Generation of Little Emperors
Key points
● Over seven in ten (72%) Chinese urban middle class parents bought
disposable nappies in the past year, testament to changing cultural
attitudes, with parents increasingly shunning the more traditional
reusable baby trousers.
● With food scares dominating media headlines, a preference of foreign
brands of baby formula is evident, as Nestlé and Wyeth lead the
market with 54% of parents who indicate they buy their products.
● Two thirds of Chinese parents express a preference for 'natural' baby
products, linked directly to the food scares. Parents' protective
instinct is at play, as they try to shield their only child from any harm.
● Pushchair ownership has reached the mainstream, with 86%
amongst Chinese middle class families who own one. Owning a buggy
appeals to parents' desire to ensure their little ones are transported
safely. Fast adoption helped the prices to come down, and as a result
only 3% of Chinese parents now say that owning a pushchair is
unaffordable.
Childcare arrangements
FIGURE 16: Daycare arrangements, July 2012
“During a typical week, does your child go to any of the following?”
Shanghai.

aged 0-4
Over seven in ten (72%) toddlers of surveyed urban middle class families are in
some form of kindergarten. This ranges from the local public kindergartens provided
by the state (for which a small fee will have to be paid) to private kindergartens and
private nursery teachers, which are often caring for a group of children living in the
housing compound or immediate area.
Nearly one in ten families send their little ones to international kindergartens, which
are not usually truly international, but use some form of overseas educational
concept, such as Montessori. Boarding kindergartens are a relatively new concept but
catching on fast, with children boarding from Monday-Friday for a fee and returning
home for the weekends.
Public kindergartens are common throughout China’s cities and so, in most, there are
high rates of attendance – as high as 44% in Chengdu and Nanjing. Private
kindergartens are more common, longer established and within the reach of more
parents’ finances in wealthier cities such as Beijing (30%). Private infant daycare is
more common among higher-income families, whilst lower-income families are more
likely to rely on themselves or their parents for primary childcare.
These early learning options have become spaces where brands can interact at an
early age with Little Emperors and their parents. For instance, China’s dairy
companies have worked with both public and private kindergartens to promote dairy
consumption. Shanghai’s Guangming (Bright) Dairy has long been running
kindergarten milk programmes offering free milk in an attempt to overcome at an
early age the break between dairy consumption as a baby and as a toddler that can
cause higher rates of lactose intolerance.
Shanghai.

Daily consumption of free milk at kindergarten may lower the incidence of lactose
intolerance and so a future child-centred market for milk is grown. Convincing new
parents of the importance of dairy products begins at this point.
Baby personal care purchases
FIGURE 17: Baby products bought in the past 12 months, July 2012
“Which, if any, of these products designed specifically for babies and children aged
up to 4 years old have you bought for your child in the past 12 months?”
aged 0-4
While considering the range of products parents are purchasing for their Little
Emperors, it is nappies that are perhaps most instructive into how childrearing
patterns are changing in an environment of greater choice, product awareness,
international influence and greater levels of disposable income.
Shanghai.

Though nappies have now been on the market in China for a couple of decades, they
have only recently come to be widely used. The generation of Little Emperors born in
the 21st century are really the first generation in China to have widespread use of
nappies as a standard item for infants. Before this, and still in poorer parts of urban
China, the traditional open-crotch trousers with a hole at the back are still standard.
They are inexpensive and allow for early potty training, though are not overly
hygienic.
Over seven in ten (72%) middle class urban families indicated they bought
disposable nappies in the past year. Similarly, the add-on market of disposable baby
wipes has appeared – 67% of parents claim to purchase these too – with high
percentages also buying baby-specific creams and oils.
The younger the parents, the more likely they are to buy nappies and dispense with
the traditional open-crotch trousers. Over a third (35%) of parents aged 20-29
bought disposable nappies as opposed to 29% of over-30s. It is clearly an
increasingly generational shift with younger parents seeing nappies as more
standard. This indicates the market is only set to grow, as younger parents enter the
market and eventually a generation of Little Emperors who were raised in nappies
become parents themselves.
Swimming diapers are a new product in the market both in China and internationally.
They appear to have caught on relatively quickly in China’s more developed cities, at
16% amongst our respondents. This may be due to the middle class trend for
introducing their infants to paddling pools and swimming tanks early on.
Nearly four in ten (39%) middle class parents reported buying suncare products for
their toddlers. A wider variety of retail channels and greater awareness of skin
cancer and other sun-related ailments is helping to grow sales in this category.
However, the traditional preferences for lighter skin tone might also be at play here.
Preference for foreign brands of nappies
FIGURE 18: Brands of disposable nappies bought in the past 12 months, July 2012
“You stated that you have bought nappies and/or training pants for your child,
which, if any, of the following brands of disposable nappies have you bought in the
past 12 months?”
aged 0-4 who purchased disposable nappies and/ or training pants in the past 12
Shanghai.

months
As the urban market for disposable diapers has grown (including a niche sub-market
in home delivery and removal services for diapers), so the range of domestic and
international brands available has also grown. Seen as a foreign item by many
parents, overseas brands have done well in the market and have a generally strong
brand reputation, although many are now manufactured locally.
Procter & Gamble (P&G), which has the largest proportion of regular buyers with
85% of parents choosing the brand, reported its annual sales of its major brand
Pampers, introduced in China in 1998, are growing by better than 50%.
Local brands have been increasing their market share as well, as they continue
building a reputation and strong distribution networks. There are now approximately
a dozen domestic companies distributing disposable diapers nationally to most of
China’s major cities. Primary among these local brands is Chiaus, with a strong 36%
of parents purchasing them regularly, according to Mintel’s exclusive research.
Chiaus is a brand owned by Chiaus (Fujian) Industrial Development Co., Ltd, a
specialist nappies manufacturer established in 2006, indicating how new this type of
product is to the Chinese market. The company now produces 11 varieties of baby
nappies as well as associated baby tissues and wet wipes.
There are also higher-priced niche brands, often from Japan, such as Pigeon and
Unicharm. At the moment high-end brands, such as Pigeon, are finding brand
traction to a greater extent in the most developed, and richer, cities such as Beijing
(37% of parents have bought the brand, according to Mintel data) than in the less
developed and more remote middle class enclaves such as Chengdu (where only
25% have purchased). However, it could be argued that when even parents in
Chengdu, with less access to niche brands and less disposable income, are
purchasing higher-end diapers, then the importance of the sector to parents is clear.
Shanghai.

Advertising illustrates benefits of wearing nappies
Advertising of diapers plays into parents’ concerns about safe development of their
child from a young age. Yvonne Pei, the associate director of external relations for
Procter & Gamble in China, explains its advertising style – “Pampers promotes
overnight dryness, and it helps the baby to have a good night's sleep. If baby doesn't
have a good sleep, then the baby doesn't have a good mental development.”
Local companies take a slightly different tack in their advertising. They are more
likely to try to educate parents as to why diapers are both more hygienic and better
for a baby’s development. Hengan is a major paper products brand in China with
strong market share in tissues, wet wipes and female sanitary products as well as
diapers. The company is trying to change consumer thinking about diapers in tier 2
cities where the foreign brands are less readily available and considered more
expensive, while diapers are still a relatively new concept compared to their wider
adoption in tier 1 cities such as Beijing and Shanghai. Hengan reports that many tier
2 consumers see diapers as wasteful and unnecessary, though attitudes are changing
and sales are growing.
Parents look for 'natural' credentials
FIGURE 19: Attitudes towards nappies, July 2012
“Please tell us which, if any, of the following statements regarding nappies you
would agree with?”
aged 0-4
* these exemptions change and are added to regularly as the government will not lift
the policy in one go to prevent future expensive “spikes” in demand for education
and healthcare services. Additionally, though not overly significant in overall terms,
many Chinese women have been giving birth to their second child overseas,
especially in Hong Kong, which is exempt from the One-Child Policy
Source: State Population and Family Planning Commission/Mintel
%
I try to buy baby products that are made from natural
ingredients
66
I often worry about the safety of ingredients of the baby
products I buy
49
I don’t care how much they cost as long as the nappies I
buy are the most reliable I can get
48
I am looking for nappies that offer my child the best
comfort
47
I would buy organic disposable nappy brands if they were
the same price as my usual/preferred brands
38
Disposable nappies cause skin irritation for my child 31
Children wearing split pants are potty trained earlier than
those wearing disposable nappies
29
Split pants are a more convenient alternative for my child
than disposable diapers
28
Shanghai.

I am more likely to buy disposable nappy brands that I’ve
seen advertised
28
Split pants are a more natural way for my child to relieve
itself
23
I consider split pants uncivilised 22
Split pants are old-fashioned 14
Parents’ desire to protect their only child from harm comes to the fore when they
purchase baby products. Having only one chance to raise a child makes mums and
dads (as well as grandparents) fret even more over the perfect way to take care of
their little ones and try to provide them with the very best.
Rising interest in imported products, certification, ‘organic’ and ‘green’ products are
all seen as ways to do this. For instance, in the food and beverage sector the rash of
food scares in recent years linked to excessive use of pesticides, fertilisers and other
chemicals has raised the profile of organic foods (see Mintel’s Consumer Lifestyles:
Food Scares – China, September 2012).
Brands that are able to display natural or ‘organic’ qualities are favoured by parents
(66%). In much the same way that these consumers might be looking more closely
at ingredients labels, certifications and product claims of ‘natural’ or ‘organic’ (all
trends evidenced in detail in the Mintel Consumer Lifestyles: Food Scares – China,
September 2012 report), so too it appears they are in other product categories such
as nappies. This has been a strength for the foreign brands, such as P&G and
Kimberly-Clark, as well as the more niche foreign brands such as Japan’s Pigeon and
Unicharm.
It is in the more advanced cities, such as Beijing, that consumers are most
concerned about these issues. For instance, 71% of Beijing parents care about
diapers having natural ingredients compared to just 58% in Chengdu. However, the
fact that even Chengdu comes in at well over half of parents showing concerns, and
wanting more natural products, shows the national and widespread concern over
product quality and safety.
Baby food and drink purchases
FIGURE 20: How the child is fed, July 2012
“Thinking about feeding your child, which of the following did you feed your child
with in the past 12 months?”
Shanghai.

aged 0-4
Over eight in ten (81%) Chinese middle class families purchase baby formula for
their infants. This figure remains over 75% in all the cities surveyed and rises to
85% in Shanghai and Guangzhou. Similarly all income brackets within the middle
class are using infant formula regularly, whilst three quarters opt for powdered
formula.
Baby formula enjoys high penetration in the baby food /drink market, despite the
recent scandals around tainted infant formula causing deaths. This is owing to heavy
promotion by the government, healthcare professionals and brands throughout
maternity clinics and parents’ classes. In addition, free samples, money-off coupons
and direct mail are sent to parents stimulating demand for the product. Advertising
that hints that baby formula is better for the child than breastfeeding has been
extremely effective at convincing many parents that formula is an essential product
for child raising.
However, breastfeeding appears to be the preferred option amongst the most
affluent families, at 41% (vs 35% on average) amongst those with monthly
household incomes of RMB25,000+, whilst usage of baby formula drops off in this
income group. This could be explained by the higher exposure to international trends
Shanghai.

amongst the more affluent Chinese consumers. This trend is also helped by the
growth in baby feeding and changing rooms in public spaces and restaurants.
The movement towards breastfeeding is expected to be accelerated by a combination
of a growing appreciation of all things natural, continuing product scares around
infant formula products and their currently rising prices.
Parents' anxieties fuel preference for foreign brands of baby formula
“You stated that you used infant formula in the past 12 months. Which of the
following brands, if any, did you purchase in the past 12 months?”
FIGURE 21: Brand of infant formula used, July 2012
aged 0-4 who used baby formula in the past 12 months
Mintel report Consumer Lifestyles: Food Scares – China, September 2012 showed
that over half of middle class parents had a definite preference for foreign brands of
infant formula over domestic ones. This is linked with the food scares and scandals
around tainted baby food products, such as elevated hormone levels in infant
formula milk reported in 2010 and 2011. This had led to a surge in buying and
hoarding of foreign brands of infant formula, believed to be safer, even if
manufactured in China.
Mintel data collected exclusively for this report confirm the strong preference for
foreign brands of infant formula, despite the typical 15-20% premium price tag
compared with domestic brands. There is a strong market for infant formula even
with breastfeeding making a comeback, with Nestlé and Wyeth leading the market
with 54% of parents who buy their products. However, domestic brands have some
way to go in terms of rebuilding customer trust and loyalty in the wake of the
repeated food scares, despite their lower price points.
Shanghai.

Distribution is key in the market as the middle class expands out from the key tier 1
and tier 2 cities to other locations. Brands with good tier 2 and tier 3 distribution
have a better chance of establishing themselves in a strong position.
For instance, Synutra, a Chinese company, has a strong position in tier 2 cities, such
as Nanjing, despite being relatively highly priced. Over a fifth (21%) of parents in
each city purchase it, a percentage that falls to as low as 15% and 16% respectively
in the tier 1 cities of Beijing and Shanghai where competition and brand availability
are wider. Synutra has built an especially strong provincial distribution system – a
network comprised of over 650 independent distributors and over 800 independent
sub-distributors who sell Synutra products in over 67,000 retail outlets – that
appears to be paying dividends for the brand.
Taking a baby around
FIGURE 22: Items used to transport the child, July 2012
“Thinking about getting around with your child, which of the following baby mobility
items do you own, and which ones do you not have but plan to buy in future?”
aged 0-4
Over eight in ten (86%) middle class urban families own a pushchair, with another
12% planning to buy one in the future. Buggies can be seen as a display of wealth,
but are also safer for the child to be transported in. As with nappies and suncare
products, pushchairs are not traditional items in China and have been adopted
Shanghai.

almost solely by the emergent middle class to date. Pushchairs go with diapers and
other modern baby items as products the new middle class want for their Little
Emperors.
The pushchair market has emerged strongly in all the cities surveyed – over 80% in
Beijing, Shanghai, Guangzhou, Nanjing and Chengdu – and across all financial
brackets of the middle class. This perhaps indicates their position, not just as a
protection item, but also as a desirable accoutrement to the modern middle class
aspirational parenting.
Car seat ownership is far from universal, with 66% of respondents claiming to own a
car seat (ownership tends to be lower in tier 2 cities than tier 1) indicating that
awareness is still growing and resistance to this obvious form of child protection
remains. This also means that there are opportunities for more sales if education and
awareness continue to be raised.
Older parents focus on fitness of toddlers
FIGURE 23: Attitudes towards transport of the child, July 2012
aged 0-4
Attitudes towards transporting a toddler around vary greatly by gender and age of
parents. Mothers, and particularly those aged 30-49 (52%), are more likely to find
Shanghai.

carrying a baby around exhausting. Thus, older mums would be especially amenable
to purchasing a pushchair to transport their little one, with 87% amongst them who
own one versus 83% of younger mums. This especially holds true as only 3% of
Chinese urban middle class parents think that pushchairs are too expensive for them.
Younger dads aged 20-29 are particularly anxious about the safety of their little
ones, perhaps to an extreme, as 17% of dads in this age group carry their toddlers
everywhere, so as not to tire them out too much. On the other hand, older parents
put more emphasis on exercise, with nearly six in ten (58%) who ensure their
children walk as often as possible to stay fit.
With four in ten Chinese middle class mums and dads finding it exhausting carrying
around the child without any props, the market for pushchairs, and to a lesser extent
slings and back carriers, will continue to grow. Whilst in the minority, over one in ten
(11%) parents agreed that buggies can be impractical when getting around in large
cities, indicating a need for developing more compact and manoeuvrable models.
Shanghai.

Education of Little Emperors
Key points
● A staggering three quarters of Chinese middle class families expect
their children to attain a postgraduate degree, testament to the
extent to which higher education is linked with future prosperity in
modern China.
● Close to nine in ten children in Chinese middle class families attend
extra-curricular private lessons, to distinguish themselves from other
students competing for limited university places.
● Despite the much higher costs, universities in the US are seen by six
in ten Chinese parents as the first choice for their offspring, with over
four in ten parents justifying exorbitant expenditure as a way for
their children to have better career prospects.
Parents' educational aspirations for Little Emperors
FIGURE 24: Type of degree intended for child, July 2012
“Thinking about your child’s education, what type of degree do you intend your child
to pursue?”
Shanghai.

aged 5-16
Many parents and grandparents wish to compensate for their own material consumer
loss having grown up in less affluent times by providing everything for their children
right from the baby stage. These parents, and grandparents, are often referred to as
‘lag-behind consumers’ as they missed out on the consumer boom of the 1990s and
are now spending heavily on their children to compensate for this.
Education is where parents and grandparents start compensating for their own losses
first. Education is central to the Chinese middle class experience, the cornerstone of
middle class achievement, as demonstrated in Mintel’s Consumer Lifestyles: China’s
Middle Class – China, June 2012 report. While grandparents of the current infant
generation will have largely missed out on a formal education beyond high school
due to living circumstances, lack of finances or the chaos of the Cultural Revolution
period, invariably the parents of today’s infant Little Emperors have received a higher
education and benefited from that edge in the job market which then financially
allows them to live a middle class lifestyle. Simply put, higher education has been a
key component to middle class entry, formation and reproduction.
Shanghai.

day spent travelling to and from school and an hour of sports activities it’s easily a
ten-hour day before any time can be found for leisure activities or spending time
with their parents and family.
In a prime example of the burden of expectation, 75% of Chinese middle class
parents expect their child to attain a postgraduate degree with only 32% happy that
their child completes their education at only graduate level. These expectations are
fairly constant across all income bands and cities as well as being expected of both
girls and boys.
Parents aged 20-39 more likely to opt for private school
FIGURE 25: Type of school the child attends, July 2012
“Which of the following best describes the type of school your child goes to?”
aged 5-16
Many Little Emperors will have the opportunity to fulfil their parents’ wishes. Two
thirds of middle class children in the cities attend ‘key schools’, which are similar to
college preparatory schools and aim for the majority of their pupils to go on to higher
education of some sort. Partly this high rate is possible as key schools are to be
found most commonly in tier 1 and 2 cities such as those surveyed, though are by no
means available nationwide to all children. The majority of the rest of the children in
the families surveyed are attending regular state schools (19%) and 9% are at
private fee-paying schools.
Shanghai.

send their children to key public schools (80% vs 59% of parents aged 20-39). On
the other hand, younger parents lean towards sending their offspring to private
schools (10% vs 6% of parents aged 20-39), perhaps viewing this departure from
the traditional education as more desirable. Likewise, tendency to send children to a
private school peaks amongst higher income groups, owing to reasons of greater
affordability.
Extra-curricular activities enhance academic credentials
FIGURE 26: Additional paid classes, July 2012
“Have you paid or are you currently paying for any of the following forms of private
(ie non-state funded) education for your child?”
aged 5-16
High expectations of academic achievement mean the competition for university
places is intense, and additional after-school and extra-curricular classes are a
common part of a Little Emperor’s day. Nearly nine in ten (87%) children take part in
some form of extra-curricular activity, mostly in art (50%), music (45%) or
languages (49%).
Whilst these are not necessarily seen as core subjects, Chinese universities often
look for activities and extra skills to make distinctions among students with
commonly good grades. Activities that are not looked at closely for college entrance,
such as sports (except for the elite sports schools), are noticeably less popular with
parents (23%).
Shanghai.

The ability to have private lessons is largely connected with a household’s income;
uptake of any private classes rises dramatically with income. Equally, private classes
appear to be more popular in households with just three members, whilst it's likely
the case that grandparents take on a larger role in the child's education in larger
households instead.
Parents wish for a brighter future for their offspring
FIGURE 27: Willingness to fund the child’s studies abroad, July 2012
“Would you be willing to fund your child to study abroad?”
aged 5-16
Shanghai.

study abroad is growing in popularity for middle class parents for two main reasons.
Firstly, a foreign education may well be seen as counting for more when they return
than a purely PRC education. Secondly, with places limited at Chinese universities
some Little Emperors may only get their under- and postgraduate education by going
overseas and paying.
Some students, who are finding the high school and college entry exams too hard
and the competition too intense, opt for study abroad at pre-university level – 7% of
parents are willing to fund a year of high school overseas.
Annual costs of studying overseas are high: RMB150,000 (approximately US$23,770)
to RMB200,000 (approximately US$31,695) for lower-cost UK, Australian or
Canadian colleges rises significantly to over RMB250,000 (approximately US$40,000)
for elite colleges in Europe and in the US.
This is a massive financial burden on parents and they may not realise the true costs
(including living costs, rent, flights to and from China, healthcare, etc.) in advance,
despite their best wishes. There is some evidence to believe this is the case, as only
15% of parents are willing to admit that sending their children to university is going
to be a big financial burden (see below). Richer parents are more able to offer this
funding – in the group with personal incomes above RMB15,000 per month 95% are
willing to fund study abroad, but this drops to 79% in the under RMB10,000 per
month group.
A very small proportion, only just over one in ten (13%) Chinese parents, agree they
would like their offspring to study in China. As many parents and virtually all
grandparents were denied a university education and had no chance of studying
abroad, they now wish for a brighter future for their Little Emperors.
American institutions are favoured
FIGURE 28: Preferred country for child’s studies abroad, July 2012
Base: 724 internet users aged 20-49 who are classified as middle class with children
aged 5-16 and who would be willing to fund studies abroad or have already funded
Rank 1 Rank 2 Rank 3
% % %
US 60 13 10
Canada 15 19 10
United Kingdom 14 39 13
EU (excluding the United
Kingdom)
2 5 16
Australia 5 12 20
Hong Kong 2 5 12
Singapore 2 5 11
Japan 1 2 7
Other country - - -
Studying abroad has become a regular rite of passage for many teenage Little
Emperors, and they are prepared for it by language lessons (49%) well in advance.
Shanghai.

Given a choice of their child studying anywhere in the world, the US is most
preferred and ranked first by 60% of parents reflecting the strong opinion of
American higher education (particularly the Ivy League institutions) despite the high
costs. For that reason, the pull of American universities is stronger amongst more
affluent families as well as those who live in wealthier cities, such as Beijing.
Canada and the UK are strong choices both as first or second options. In recent
years Australia has become an increasingly popular option for Chinese parents and
students in terms of cost, lifestyles and college life.
Attitudes towards supporting children financially
FIGURE 29: Financial impact of covering child’s education, July 2012
“Please tell us what impact your children’s education might have on your financial
and personal situation?”
aged 5-16
%
I started saving money for my child’s education early in
order to afford a good college/ university
58
I want my child to compete with the best academically, for
this I am willing to pay a significant amount of money
56
It’s worth paying a lot for education fees because my child
will get a higher-paid job afterwards
41
My child is likely to receive financial support from my whole
family ie parents, grandparents to pursue a good education
28
I would surrender my last resources to allow my child
higher education
26
I cut back on my spend on non-essentials ie leisure
activities or luxury goods in order to save money for my
child/ children’s education
23
I am willing to take on debt in order to send my child to a
good college/ university
17
Sending my child to university will be a huge financial
burden
15
I count on my child to support me financially after I retire 5
Despite the high costs, Chinese middle class parents are willing to put their time and
money where their hopes are in order to ensure their children’s education, future
success and security. Over four in ten (44%) indicate they regularly spend time
helping their child with their homework and the majority take their children to school
and collect them at the end of the day (see A Day in the Life of a Little Emperor
section).
Besides encouraging their offspring to study hard, Chinese middle class parents
make a lot of financial compromises to ensure they can foot the bill for their child’s
education. Nearly six in ten parents (58%) start saving for their child’s future
education costs from birth. Over half (56%) agree that they are willing to pay a
Shanghai.

significant amount of money for children's education and over four in ten (41%)
believe that their child will get a higher-paid job afterwards.
Over a quarter of Chinese middle class parents seemingly would give an arm and a
leg to put their children through university, by surrendering their last resources for
their child’s higher education. However, such self-sacrificing by parents is only
necessary when family financial resources are limited, whilst wealthier parents don't
have to make the same compromises to provide for the future of their offspring.
For example, whilst 37% of mums and dads in Chengdu are willing to surrender all
resources for their children's education, only 18% in Guangzhou would do the same.
Nearly three in ten (28%) would ask for financial help from the entire extended
family to ensure Little Emperors get the best education, with the tendency most
evident amongst Nanjing (tier 2) households (34%) with somewhat less wealthy
backgrounds.
Shanghai.

Spending Power of Little Emperors
Key points
● Even though pocket money is a relatively new concept, over nine in
ten parents now give their offspring a monthly allowance, with nearly
half of grandparents contributing as well.
● Fathers aged 40-49 are the most generous with their Little Emperors,
and also tend to dish out pocket money with no strings attached.
● Mothers are much more disciplinarian and more likely to require that
children do housework, behave well and do well in school before
giving them any money.
● Six in ten parents want their offspring to focus on their education
first and foremost, taking care of their financial and other needs, so
there are no distractions. Whilst they may have their children’s best
interests in mind, this may actually be to the detriment of children’s
future independence.
Sources of children’s income
FIGURE 30: Sources of child’s income, July 2012
“Specifically thinking about your child’s finances, does your child receive monthly
allowance ie pocket money or any other sort of monetary funds from you, your
partner or someone else?”
Shanghai.

aged 5-16
The notion of pocket money, or an allowance given by parents or grandparents to
children, is relatively new in China. Children would receive the traditional red
envelopes (红包 hongbao) with some money at Chinese New Year, but not regular
weekly or monthly allowances.
However, it appears the trend has caught on fast; 92% of parents claim to give their
kids a monthly allowance. Older parents and in particular mums aged 40-49 are the
most generous with their offspring, of whom 98% provide their kids with monthly
pocket money. This is largely because parents in this age group are considerably
wealthier compared with the younger ones. Nearly four in ten (38%) have household
incomes of RMB25,000+ versus 30% of parents aged 20-29 and 21% of those aged
30-39.
The notion of the six-pocket phenomenon is at play here again with 48% of
grandparents also giving money to children, with their contributions peaking in
families in the mid-income ranges. Grandparents are less likely to loosen their purse
strings for their grandchildren in the wealthiest families, as parents are in a better
position to finance all the needs of their offspring.
As Little Emperors grow up, they are less likely to be supported financially by the
extended family, as parents take on a more active role in this regard. Whilst 88% of
children aged 5-9 get pocket money from parents and 51% from grandparents, the
proportions change to 96% and 45% respectively once children reach the age of 10-
16. As budding consumers, tweens and teens develop more expensive tastes. As
their purchases may now come with higher price tags, grandparents might not be
able to provide for their needs to the same extent as when Little Emperors were
younger.
Shanghai.

Fathers aged 40-49 most generous with offspring
FIGURE 31: Amount of monthly allowance, July 2012
“You stated that you give your child pocket money. How much money do you give
your child in a typical month?”
aged 5-16 whose child receives pocket money
Four in ten Little Emperors get between RMB100 (US$16) and RMB300 (US$48) per
month, though with additional money from grandparents and other extended family
members this could easily tally with the National Bureau of Statistics average of
US$116 per month (see Market Background section). None of this of course includes
money spent on the child in the way of food, toys, clothing and other products
bought by parents.
Amount of monthly pocket money is positively correlated with household income. In
addition, families living in Beijing appear to be the most generous with their Little
Emperors, as over three in ten (31%) give their children pocket money in excess of
RMB500 a month.
Whilst older parents (aged 40-49) overall are more generous with their children
compared with younger parents, with 26% handing out pocket money of RMB500+ a
Shanghai.

month, it’s older fathers who outspend all others, with 38% giving their children the
same amount.
Mothers require more discipline from Little Emperors
FIGURE 32: Condition monthly allowance is based on, July 2012
“Is this monthly allowance linked to any of the following in exchange?”
Over half (54%) of parents give pocket money based on their child’s behaviour at
home and fewer (49%) on their child’s performance in school and at after-school
extra-curricular classes. Mothers place more emphasis on linking monthly allowance
to children’s behaviour and diligence around the house, whilst dads appear to be
more lax, and much more willing to provide their Little Emperors with pocket money
with no strings attached (35% vs 24% for mothers).
Division of responsibilities in modern Chinese households appears to be very
traditional, with mothers taking care of the large chunk of duties related to raising
children. Mintel data show that mums (and particularly younger mums) are
considerably more likely compared with dads to help children get dressed, prepare
their meals, buy their treats, do their clothes shopping and listen to children’s
complaints (see A Day in the Life of a Little Emperor section).
Shanghai.

As Chinese mothers are more actively involved in the upbringing of their children,
they would place more emphasis on discipline and obedience, as evidenced by the
fact that they are more likely to place conditions on children’s money allowance.
Over four in ten (45%) older fathers (aged 40-49) don’t attach any requirements to
an allowance, which compares with 21% of mothers in that age group. Mums aged
40-49 are the most disciplinarian with over half (56%) who base the amount of
pocket money on children’s performance at school and a similar proportion who base
the allowance on help with household chores. This could be linked with the more
traditional upbringing of this generation of mothers as well as their higher aspirations
for their children’s future.
Higher-income families attach fewer conditions to pocket money
FIGURE 33: Condition monthly allowance is based on, by household income, July 2012
As mentioned before, the amount of pocket money given to children is strongly
linked with household income. Mintel data further confirm that wealthier families are
much more likely to dish out an allowance to Little Emperors regardless of their
conduct at home or outside, whilst lower-income households place more emphasis on
discipline in exchange for monetary rewards.
Obedience is more highly prized amongst younger kids (aged 5-9), with nearly six in
ten parents (59%) who require children to behave themselves at home as a
condition of giving them pocket money. When children reach the age of 10-16, they
Shanghai.

are given freer rein and over a third (34%) of parents dole out a monthly allowance
irrespective.
Equally, there is more discipline in households with four or more members, with
more relatives who could instil a certain code of conduct in Little Emperors. Two
thirds of parents in these larger households link pocket money with children’s
behaviour at home and over half (55%) link it to how well the child helps with
household chores.
Children’s financial product ownership
FIGURE 34: Savings account and insurance policies set up for child, July 2012
“Have you set up a savings account or insurance policies for your child?”
aged 5-16
Despite the apparent generosity of Chinese middle class families with their offspring
(particularly those as the higher end of the income scale), parents are also eager to
teach their Little Emperors how to be financially savvy as well as provide for their
future from an early age.
Nearly all (95%) parents have also set up some form of financial product for their
children. Invariably this is either a savings account or an insurance policy with 70%
opening both types of financial products for their child.
Shanghai.

As with pocket money, propensity towards financial product ownership rises amongst
children in wealthy households, as well as those with older parents, and as there is a
high overlap between the two.
Focus on education
FIGURE 35: Attitudes towards the child’s development and family finances, July 2012
“Please tell me the extent to which you agree or disagree with each of the following
statements.”
child aged 0-16
Any
agree
Neither
agree nor
disagree
Any
disagree
% % %
I am teaching my child to be independent 85 12 3
I don’t want my child to feel pressured all the
time
77 15 7
I want my child to focus on its education
instead of wasting time on activities such as
watching TV
60 25 15
Study is the most important activity for my
child
59 26 15
If I want to buy something for myself, I first
check if I cannot better spend that money on
my child
43 28 28
I am concerned about my child’s ability to live
independently after it leaves home
43 29 29
My child has a significant influence on
household decisions
41 38 21
I need to purchase a property for my child
before he/ she gets married
37 35 28
I am worried about our financial situation if I
try to fulfil all my child’s needs
33 34 34
I cut back on household expenditures to pay
for items my child would like to have
29 33 38
I want my child to pursue the career that we
as parents have chosen for him/ her
28 32 40
My child will always be able to rely on us
financially independent of his/ her age
23 25 52
I am likely to struggle financially once my
child grows older
21 29 50
It could be argued that a strong desire for children to succeed and do well while also
enjoying life and being independent are largely universal values for any parent.
However, the fast pace of economic growth and the changing demands and
requirements of the urban labour market all mean parents demand more of their
children in Chinese middle class families.
Shanghai.

Marketing to children china - november 2012

Marketing to children china - november 2012

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