Spending with Pride
A Peak into the Economy of Pink Money
By Ray Linetti
Do you know what makes the United States of America $790 billion richer than other countries? Or how is China gaining about $300 billion every year from a single customer segment? The answer lies in their ability to tap the burgeoning “pink money” market. The “pink money” is, popularly used, to refer to the purchasing power of the LGBTQIA+ community. Traditionally, pink money was referred to the political donations made by the elite members to influence the outcome of political campaigns. Thanks to the active equal rights movement, many businesses and advertising houses are aware of the power of pink money, and often cater to this coveted demographic, to capitalise on substantial disposable income.
The pink money, which is valued at about $4.6 trillion worldwide (Source: Hong Kong based LGBT Foundation), represents a variety of sectors, more specifically entertainment and consumer goods. Another term used is the “Dorothy dollar”, a reference to the American euphemism “friend of Dorothy” which is sometimes used to identify members of the community.The “pink” in the pink money dates back to the time of Auschwitz, wherein Nazis had used a “pink triangle badge” to label and categorise LGBTQIA+ folks from the rest of the captive prisoners. The “pink” badge later became a part of the collective equal rights movement, as a tangible symbol of representation. And the “money” in pink money, but of course refers to their economic power. The economic power of pink money stems from the DINK niche segment market – Double Income No Kids – a common family structure amongst the LGBTQIA+ community, which happen to account for only 10-15% of the world population. The segment is highly characterised by high standards of lifestyle, high brand consciousness, and loyalty. Resurfacing back to the present, the pink money has metamorphosed as the Pink dollar in the United States of America, the Pink pound in the United Kingdom and has recently hit the Indian subcontinent as the Pink Rupee.
After the iconic landmark judgement passed by the Supreme Court on June 6, 2018 to finally scrape the colonial-era law – Section 377, Pink Money has opened a floodgate of opportunities for India’s $2.6 trillion economy. For upholding a discriminatory law, India had been neglecting an entire growth contributing index – pink rupee – which would have contributed to nearly $20 Billion every year (nearly 1.4% of the total GDP). For India, besides a greater GDP per capita and urban development, it will enhance competitiveness, entrepreneurship, talent retention and a better national reputation that could bring in additional direct investment. (according to a report sponsored by Accenture, the Brunswick Group and Thomson Reuters, 2018.). For companies, specifically in India, the pink rupee market is as good as a blue ocean. Let’s take the ‘wedding planners” into focus. According to a research conducted by UCLA School of Law, since the legalisation of same-sex marriage in the United States of America (2015), LGBTQIA+ couples have spent about $3.8 billion on their marriage, on an average $760 million a year. Similar studies conducted by NZ Herald, said that New Zealand and Australian LGBTQIA+ couples spent about A$550 million a year, equivalent to $407 million since its legalisation in 2013. Imagine how gigantic the industry would scale, after India legalises the right to nuptial for the LGBTQIA+ couples*.
Now let’s look at few more industries/businesses that have predominantly catered to the Heterosexual families and individuals :
• Tourism and the Travel industry
According to the 2018 market research report by OutNow, the LGBTQIA+ Travel industry worldwide is valued at $211 billion, out of which the Indian industry is valued at $4.7 billion, with an average expected rate of 7.2%.
• Banking and insurance industry
This type of industry is based entirely on their customer’s income and credit score. According to Thomas Reuters Foundation, India is home to approximately 56 million LGBT+ adults earning about $113 billion a year.
Not everything is hunky dory when capitalising on Pink Money, as few critics have called out companies on their “pinkish mentality” – commodification of the social agenda of inclusivity and equal rights movement. They claim that adding a rainbow filter to the company’s logo or bombarding consumers with social media posts only during Pride month, are signs of a Rainbow Capitalist. The LGBTQIA+ community consists of people who are conscious buyers – well aware of a brand’s history with its treatment towards the community as a whole. Let me give you a comparative illustration of how one company’s approach was a complete ‘marketing’ disaster versus a company’s approach which made it emerge as an empowering brand. In the 2018 London Pride, Costa Coffee (UK), barely known for their support for the LGBTQIA+ community released a ‘limited edition’ rainbow coloured cup to raise funds for their valued LGBTQIA+ consumers. On proper investigation (conducted by The Drum, a marketing website based in Europe), it was found that the money was being raised to support the “firm’s internal LGBTQIA+ network”, to convey the message to their employees that they ‘are valued at the company. What should have been a Human Resource policy has been considered a “marketing strategy”.
On the other hand, we have Godrej Group (India), who have a fantastic track record with the LGBTQIA+ community – be it their Diversity employment policies or sponsorship of various Queer centred events, throughout the year and not just during Pride. Every year, even they raise funds via sale of tickets through their collaboration with the KASHISH Mumbai International Queer Film Festival – a unique platform that gives LGBTQIA+ artists and filmmakers to show their films / short movies / documentaries etc. The true brand commitment of Godrej makes it an emerging brand in the LGBTQIA+ market.
On a concluding note, if one follows the lyrics (as Costa Coffee did), one might end up losing out on the saucerful of secrets. But by following the Godrej model – starting with empowering LGBTQIA + employees at the workplace to committing their full support to view the LGBTQIA+ as their value adding partners rather than cash cows. This itself shall pave the road for the needed social change and keep businesses in the pink.
*The Same-sex marriages are not legally recognised in India nor are same-sex couples offered limited rights such as a civil union or a domestic partnership.