Tuesday, October 13, 2009

Singles’ spending-power soars

With the explosion in the size of the single population, their consumer spending power has also soared, expecting to reach NT$888 billion (US$27.3 billion) per year. Several magazines and newspapers have focused on the economic windfall for businesses that cater to singles, which is a growing trend not only in Taiwan, but also elsewhere in Asia.

Dating in the age of the Internet

Japanese sociologist Masahiro Yamada coined the phrase Konkatsu with co-author Tohko Shirakawa in a book entitled Konkatsu Jidai (The Era of Marriage Hunting) to describe the situation in Japan. In China, singles are also a dominant consumer power. The top five dating websites are marry5.com, jayuan.com, Love Apartment, zhenai.com and baihe.com. On average, they help a single person find a date every 12 seconds, generating annual gross earnings of NT$5 billion in 2008, according to Commonwealth magazine.

The ratio of singles in Taiwan aged 20 and above was 37 percent in 2000. In 2008, it had jumped to 42 percent or approximately 7.4 million people. Based on a conservative estimate of the average monthly expenses of singles (NT$10,000 = US$308), the total business opportunities would be over NT$888 billion (US$27.5 billion) a year. Still, industries have been slow to tap into this potential goldmine.

Business Today magazine also reported on this topic. Wang Xiao-wen, is a 34-year-old single woman working for a financial services company. There are many singles around 35 years old in her company. Wang does not adopt a celibate life, yet she knows if she does not get married in a couple of years, she may well be a single all her life. She surfs the net daily in the hope of finding a suitable date. With an ample income and no pressure to support a family, she has the time and money to shop, workout in the gym, and think of studying painting.

Singles, the ideal super-consumers

Lan Ya-ning, director of the advertising and marketing research center at Ogilvy & Mather’s Taipei office, points out the marriage age in Taiwan has increased as more single people put off getting married. There are more and more people between the age of 29 and 40 who are still not married. For singles, the focus is on themselves. They share common characters of “3 nos and 3 yeses” - no expense limit, no knowledge of financial management, and no family to support. And yes, they have money, time and are self-centered. The combination of all six elements makes them super consumers.

Still, most of Taiwan’s businesses focus their attention only on young singles, not on older singles or the divorced. The market focus is on physical items like mini-refrigerators or small-sized appliances, but not on services. In fact, Matsushita Electric Industrial Co. of Taiwan, Teco, Sampo and others have launched a range of electric appliances tailored for the needs of singles, developing small capacity refrigerators, washing machines, and rice cookers.

However, the fastest growth sector is the Internet, especially online dating services, which could be worth NT$5 billion (US$153.8 million) a year according to the United Daily News. The most popular fee-based online dating site is Yahoo! Taiwan with over 1.6 million registered members. The most popular free dating site is Love Apartment with 1.77 million members in Taiwan, the majority of them being female. (Love Apartment is also successful in China with over 20 million members). In addition to other local dating sites like PC-Home, international online social networking services also rush in to share the big pie including Facebook (US), Cyworld (South Korea) and 91yuan.com (China). Lan said 70 percent of the internet surfers are singles, over 50 percent being female. They enjoy online dating, online shopping, and playing games.

Other ways singles spend money

Singles also expend more time on physical fitness activities than married couples. At fitness centers, they not only exercise, but also expand their social networking. Those centers offer restaurants, spas, hydrotherapy, swimming pools, lectures and exercise training classes.

Another booming business for singles is the market for pets and pet products and services. Chang Kuo-ping, chairman of the Taipei Veterinary Association, said in the last three to five years, the ratio of singles keeping pets as companions jumped 30 percent. In his veterinary clinic, over 50 percent of his clients are singles. The pet market’s estimated value is NT$10 billion (US$30.7 million) a year and is projected only to increase. Many people are generous, spending over NT$10,000 (US$307) at pet boutiques on such items as dog collars, dog beds, and albums for pet photos.

Catering to the single diner

The food industry is also taking notice by introducing smaller-portion packaged foods. According to Lin Chin-hsing, associate manager of Wei-Chuan Foods Corp., the business of eating out in Taiwan accounts for NT$200 billion plus (US$6.15 billion) annually, of which a large percentage is derived from single patrons. Wei-Chuan has introduced smaller-packaged soy sauce and monosodium glutamate (MSG) for singles to purchase, and is planning to develop instant food products for their convenience.

Most restaurants seem not to understand the requirements of singles yet. It is hard to find tables designed for single customers, who must awkwardly share a table with strangers. However, Pizza Hut Taiwan has seen the potential business opportunities of singles and introduced single pizzas with 32 different combinations. They even deliver single pizzas to customers for an extra fee of NT$35 (US$1.10).

Wang Wen-kuan, manager of marketing and public relations of Mazda Autos, said singles have strong buying power in automobiles, cellphones and cosmetics, with more time and disposable income available.

According to the Eastern Online Market Research Consultant, 44.8 percent of those surveyed said that the favorite thing single people would like to do is to travel overseas and domestically. Given their spending habits, it is understandable that singles are somewhat relaxed about personal financial planning. Although, as they age they are forced to undertake financial planning, often seeking simple short-term savings or investments.

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About Me

The Press Division of the Taipei Economic and Cultural Office (TECO) in San Francisco represents the Government Information Office (GIO), Executive Yuan, Republic of China (Taiwan). GIO maintains nine Press Divisions in the United States, including the San Francisco office. The Press Divisions are in charge of promoting Taiwan's public relations and cultural exchanges. This blog is updated by the Press Division, TECO in San Francisco.