While Bloomberg figures show that women are the world’s most powerful consumers, responsible for 70 to 80% of all consumer purchases through their own purchase or influence on others, the Sanlam survey reveals that they are not reaping the benefits of such power. Instead, it appears that they may be falling prey to some exploitation through pink tax on female-branded products.
But could there be an end to pink tax? Danelle van Heerde, head of advice and processes at Sanlam Personal Finance definitely thinks so and says that if women used their purchasing power to vote with their feet where justified, they’d probably end the pink tax problem.
Did you know that the estimated combined global income of women by 2018 is R264 trillion? And that the estimated combined household incomes of millennial women is R2.5 trillion? And all in all, more than 4.3 million women will have entered the SA job market by 2025.
So what exactly does this mean?
Women represent multiple markets simultaneously. As caregivers, they make purchases for other people. This means there’s a ‘women multiplier effect’, which should not be underestimated. And women are influencers. Often, even though a woman isn’t buying something herself, she’ll influence the purchasing decision of someone else. And she’s probably in charge of the household expenditure, irrespective of whether or not she earns a salary.
Danelle says multiple factors are behind women’s rising purchasing power, “Grant Thornton’s 2018 Women in Business report found women now occupy close to a third of senior roles in SA – there’s still work to be done but there’s definite improvement. This means more women are commanding higher salaries. Additionally, women are more likely to complete degrees than men so educational attainment is shifting, which again impacts women’s ability to earn.
Another big factor is that women get married later – the median age for brides is now 32 - and have fewer children. And 38% of children live with just their mothers, which suggests many of these women make all the decisions for their households. Finally, in SA, our population is predominantly young and female (51%) so it makes sense that women hold much of the purchasing power.”
Danelle says that women’s economic contribution should not be underestimated and urges more businesses to make women central to their product and service development. “Despite the fact that South Africa still faces the challenge of less labour force participation for women, a recent We Are Social survey suggests SA women already account for 47% of the country’s e-commerce market. Imagine how that’s going to shift as women are given increased opportunity for socio-economic inclusion.”
She says that businesses need to consider diversifying their teams to include more women in order to tap into the world’s most powerful consumer-base. “It’s been proven countless times that businesses with women leaders have improved profitability. That’s one side of it. The other is that women know how to reach women. They bring a unique perspective and understand a market sector that companies simply cannot afford to ignore.”
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Danelle also believes that women can use their purchasing power to end the pink tax problem. “Our recent survey showed that women do experience pink tax in South Africa, across multiple consumer categories. I urge women to use their ‘power’ to take back control of their finances. There are multiple financial ‘hacks’ to overcome pink tax – the most effective being a smart budget and continuous cost comparisons to bypass products that are unfairly priced. Additionally, spread the word to other women consumers – awareness of pink tax is the best way to beat it.”
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