This piece is a continuation of an article Nick Horton wrote for Caixin.
Valentines Day, 2015.
Ten couples wake to the news they’ve just won all-expenses-paid trips to California to get married. The wedding date is set for the sweltering Los Angeles Summer, the flights and obligatory pre-nuptial spa treatments are booked, and there’s even have a weeklong, five-star honeymoon to look forward to.
It sounds like just another marketing strategy thought up by a bridal boutique or over-cashed condom manufacturer, except this time it’s China’s most recognizable brand, and these are same-sex couples, in a country that de-classified homosexuality as a mental illness in 2011.
Welcome Taobao, and the pink dollar with Chinese characteristics.
Alibaba Group’s e-commerce giant caused a media stir in February with its “We Do” campaign to send 10 same-sex couples to California to marry under the recently amended US state’s marriage law. While by no means remarkable in a global context of a growing legion of multinational companies coming out in support of the LGBT community – one merely has to look at the controversy that engulfed companies at the Sochi Winter Olympics – the latest marketing stint represents a great leap forward for corporate social consciousness and enhanced visibility of LGBT NGOs in China.
For a community that has traditionally struggled to secure positive media channels and mainstream representation, Chinese LGBT (Lesbian, Gay, Bisexual and Transgender) activists are increasingly looking to corporate sponsorship as a platform for generating greater social acceptance. At the same time, big business is stepping up investment in LGBT consumers – the so-called ‘Pink Dollar’ – who are estimated to be worth more than US$300 billion alone in China, according to Hong Kong-based LGBT Asset Management and Corporate Advisory firm LGBT Capital.
While Non-Government Organizations (NGOs) may have found a new ally in firms like Chinese e-commerce giant Taobao, both groups are struggling to overcome underlying constraints like the general lack of understanding and public representation of sexual minorities, especially in a country that de-criminalized homosexuality as recently as 1997, and where LGBT issues remain a taboo topic for many.
This conflict may be resolved by the rise of Chinese queer-specific social media platforms like gay dating apps Blued and Zank, which experts say may be valuable focused marketing tools, but activists remain concerned that targeting such closed networks will not have the same social impact as more public corporate sponsorship.
Pink Dollar Profits and Brand Loyalty: The Business Perspective
LGBT consumers are a dream market for companies. According to Forbes, the global Pink Dollar is estimated at more than US$3 trillion annually, while brand loyalty among queer consumers is significantly higher than average. A 2009 report commissioned by the Council for Global Equity found 24% of LGBT adults switched products or service providers in a 12-month period to companies perceived as more supportive of LGBT interests.
While it is now commonplace to see Western multinationals like Google and Facebook sponsoring pride festivals and even marriage equality in the US and Europe, the market potential remains relatively underutilized in China.
According to Paul Thompson, founder of LGBT Capital, marketing to the LGBT community in China is still at an early stage of development. The major issues facing potential investors is a lack of understanding of the market, and the strategies that could be employed to target consumers.
But one Chinese company that continues to make great strides in connecting with the emerging market is Taobao. Beyond last month’s Valentines Day “We Do” campaign, the online marketplace also attracted attention last year during the 11-11 national shopping holiday – similar to the Boxing Day rush, but with hundreds of millions of more consumers – for its LGBT-friendly products and advertising.
Of course, “We Do” did not come without its fair share of product placement. In a bid to capitalize on the campaign, Taobao released an exclusive line of LGBT-themed bedding in partnership with Shanghai Bliss Home Textile Co. Ltd., as well as planned holidays to five countries where same-sex marriage is legal.
While same-sex marriages performed overseas are not legally recognized in China, a representative of Alibaba said the aim of the online competition was to raise awareness and understanding of LGBT issues in china. In the three days between February 6 and 9 during which netizens were invited to vote for the top ten couples, the official webpage for the campaign received more than 75,000 ‘hits’.
Jacob Huang, Director of the Workplace Program at Beijing-based NGO the Aibai Center, says that such a public campaign is a significant step forward for Chinese companies: “it’s a good sign. It shows that it’s a turning point for companies to realize that being open and diverse about the LGBT community is good for their business.”
According to the 26-year old, who works with Chinese and international companies to boost LGBT equality and workplace inclusion, while there is currently only a very limited amount of businesses in China who have come to realize the importance of the Pink Dollar, “the next five or ten years will see an explosion”.
“I think for them, they are also trying to test how tolerant the environment is, and how tolerant the media, the public, and the Chinese government are on the LGBT subject.”
Beyond increasing numbers of traditionally ‘straight’ corporations accessing the Chinese Pink Dollar, LGBT entrepreneurs are also riding the new consumer tide, especially in the field of social media and online dating.
Former policeman Ma Baoli launched gay dating app, Blued, in 2012, after establishing key LGBT online resource Danlan.org. Based on GPS technology, the app now employs more than 60 staff and helps connect more than 15 million users, making it the largest platform of its kind in the world. Like another Chinese social networking application, WeChat, Ma plans to add an e-commerce function, and launched an international English-language version in the Netherlands in February.
“We are aiming high for a final IPO, which would celebrate homosexual culture and business and, more important, demonstrate ever increasing social tolerance in [China]”, he told China Daily.
Foreign and Chinese investors are jumping at the opportunities presented by this new connected network of LGBT consumers. American venture capital firm DCM Ventures invested $30 million in November 2014, while Beijing-based Crystal Stream Capital has committed an undisclosed amount.
Increased Visibility: The NGO Perspective
Companies are not the only potential beneficiaries of the Chinese Pink Dollar. Taobao’s Valentines Day campaign was even more remarkable for the fact that it was sponsored by prominent LGBT NGOs including the Beijing LGBT Center and PFLAG (Parents and Friends of Lesbians and Gays) China.
For Hu Zhijun, Executive Director at PFLAG China, the opportunity to work with the world’s largest B2C (Business-to-Customer) website was an unprecedented platform for advocating greater social awareness for a community that has long been invisible to mainstream Chinese society.
“For us, the most significant aspect of the campaign was that it generated a discussion within broader society. In the two days during which the campaign was posted on Taobao’s homepage, the website received a huge flow of data exchange for the Valentine’s Day holiday, and I think this attracted a lot of attention to the issue of marriage equality and LGBT rights.”
According to David Li, Coordinator of the China LGBT Emerging Leaders Program at the Aibai Center, “the truth is that [LGBT people in China] do not have any representation in China right now.”
Without representation, it is difficult for many LGBT Chinese to accept their own identity, Li says: “we don’t have the data yet, but there is still a huge chunk of the LGBT community who are not okay with themselves. And you know, through the mainstream media – and it’s not just the media – the invisible pressure from the whole society is always there.”
In the struggle for not only social, but also self-acceptance, corporate sponsors like Taobao are able to transmit an image of a normalized LGBT identity that for many remains a taboo topic in China. As Jacob Huang reiterates: “it’s a good thing to get people interested, probably in a more simple way, to start thinking about LGBT issues and the LGBT people who actually exist around them.”
NGOs look set to continue the search for corporate partners, as big business seeks to build up its social responsibility credentials.
As Hu points out, “We expect to form more and more partnerships with companies like Taobao, and I hope that we will see increase cooperation between large corporations and NGOs in the advancement of LGBT rights, because the rights of LGBT people should not just be the concern of civil society groups; corporations also have a social responsibility to promote equal rights.”
Companies Still Not Completely ‘Out’
But while Taobao’s recent campaign demonstrates Chinese companies are increasingly willing to ‘come out’ of the corporate, they may not be entirely ‘proud’.
According to Huang, because homosexuality and gender identity remain sensitive issues in mainstream media, it is very difficult to judge the impact of LGBT-friendly advertising, as it is often censored.
“We’ve seen there is a race for visibility in the mainstream media of LGBT advertisement and themes, but the problem in China is that there is strong censorship.”
In December, regulators removed a Chinese documentary about mothers and their gay and lesbian children from Chinese online video sites. Mama Rainbow, directed by Fan Popo, had amassed more than 100,000 views on major video databases like youku.com and 56.com since 2012, before its unexpected removal by authorities.
In this environment, Huang says that while companies may have a lot of internal awareness of LGBT issues, “they are very hesitant about being ‘out’ as a company in China, because apparently this is still an argument point for business to think about if it is good for their public image to be a supportive LGBT ally.”
Considering this, the booming numbers of users of gay dating apps like Blued offer an ideal medium for companies seeking to access the Pink Dollar, without the constraints of formal censorship. According to Paul Thompson, founder of LGBT Capital, such products “can be a valuable focused marketing tool” for companies.
Consumers are attracted to these platforms, as they offer a relatively protected, anonymous space to explore sexual identity free from the discrimination and intolerance found in wider social circles. And with more than 15 million of an estimated 70 million LGBT consumers now online, the opportunity for business is staggering.
But these very same attractions are a cause for concern for some activists hoping to build connections with big business.
According to Huang, the boom of the virtual LGBT community may weaken efforts to consolidate the community and boost public visibility. People become comfortable being under the radar, making it difficult to generate the same groundswell that prompted advances in gay rights movements in the West, like Stonewall in the United States.
“Social apps definitely have a lot to offer and help us make connections easier, however, it also creates an illusion of virtual social life that is not based on real interactions between people, and may even push us into an opposite direction.”
“What we really need is a community of people who cares for and talks with each other and bonds together, not an online high-tech community where people can use a fake identity or just hook up occasionally.”
Regardless, activists remain hopeful about the future. David Li believes that in the next decade, at least half of China’s LGBT community will be ‘out’, and able to generate more support for equal rights. For Jacob Huang, the next five to ten years will see a tremendous shift in the attitudes of business, with more than 100 Chinese businesses at least open about the LGBT market and community.
The intersection of capital and sexual and gender identity remains a complex issue in China. While a new corporate interest in the LGBT community may be a platform for greater social acceptance and tolerance, the very same commercial forces may still undermine the hopes and dreams being built by the country’s LGBT activists.