For nearly six decades, the LGBTIQ + community is finally being given the recognition it deserves in financial terms. The pink economy , also known as pink money or pink market , is a term to describe the purchasing power of the community made up of non-heterosexual and / or cisgender people, that is, lesbian, gay, bisexual, trans, intersex, queer and more.
Thepink economyis a socio-economic and market phenomenon that has driven many changes in areas such asmarketing,advertisingand thebusiness model of companies.
The'pink economy', as it was called in English, emerged in the mid-1960s in the United States. Both large companies and retailers noted that this previously ignored segment hadmore budget availableto spend on consumer goods, compared to members of a family with children.
It should be noted that the previous terms differ from'pink capitalism', since"this concept refers to the incorporation of theLGBTmovement into capitalist dynamics, and it is a term used critically because it implies the commercialization of that community and its discourse", defines the portalEconomipedia.
Do LGBTIQ + people make more money?
This extra buying power does not necessarily mean that the LGBTIQ + community has a higher income, but rather that ithas different consumption habits. The reason is that a good percentage of them do not have and will not have children, which allows them to have more money to spend on themselves.
"Gay men will travel more often, spend more time away from home and pay more attention to home design and fashion," Bob Witeck, CEO of Witeck Communications and specialist in analyzing the diverse market, told theFinancial Times.
In fact, in the United States and Europe there is a correlation between the growth of the pink economy and the increase in demand for luxury products and premium services , since it is estimated that this community spends 15% more than heterosexuals , according to the portal. OinkOink .
Even (and even more so) when they decide to live as a couple, their budget for luxury goods is higher, since both bring income to the household. These couples are calledDINK, which means 'double income / no kids' or 'double income / no children'.
This gives them10 to 15% greater purchasing power, which allows them to make purchasing decisions focused onmore expensive goods and services, such as restaurants, clothing, and luxury travel, among others. Something that traditional families can rarely afford.
Pink money isbecoming more powerful as theLGBTIQ + communitygains greater acceptance in society. For this reason, more and more companies are joining the trend of expanding their offer, creating specialized products and services to meet the needs of the sector and take advantage of their purchasing power.
The pink economy in Mexico
According to data collected byForbesin 2017, only in Mexico thepink moneygenerated65,000 million dollarsin consumption. That same year, in the United States, thepink marketwas estimated at 917,000 million dollars and for 2018 it was higher than 1,000 million dollars.
According to the consulting firmLGBT Capital, in 2018, this group moved about$ 3.6 billion dollars in the world, a figure that can be equivalent to the GDP of Germany. In fact, it is estimated that if the LGBTIQ + community were a country, it would be the fifth largest economy in the world.
In Mexico, it is estimated that thepink economyis made up ofbetween 8 and 9 million people, who contribute more than80,000 million dollars to the country's GDP.
Specialists cited byEl Universalaffirm that there is a relationship between GDP and the rights of the LGBT + community. It is estimated that in any country in the world, for every right that the community has earned, the GDP per capita increases by $ 400. But if it is legislation, the figure triples, that is, it rises to 1,200 dollars.
Business opportunities in the pink economy
Several analysts agree that thepink market willgrow as the rights of the LGBT + community increase, because there would be demand for new goods and services.
These are some areas of opportunity in the pink economy.
- Tourism.This is perhaps the sector that has focused the most on taking advantage ofpink money, since for a couple of decades many destinations, hotels and travel agencies have adapted to be 'gay friendly', offering tourist packages that offer a safe environment to avoid discrimination problems towards travelers. In 2017, thepink marketcontributed1.4 billion dollars to the Mexican tourism sector.
- Weddings.As laws are passed guaranteeing equal marriage, same-sex weddings are taking center stage. Entrepreneurs in the sector have a range of options to meet the demand of these couples: matching wedding dresses and suits, genderless marriage and engagement rings, gay friendly honeymoons and much more.
- Financial sector.Currently, there is a gap in the offer ofproducts such aslife insurance and medical expenses that include same-sex marriages.
- Marketing and publicity.In these fields, the focus on the pink economy is a win-win. While marketing and advertising agencies offer their clients new alternatives to reach the pink market, they also contribute to the visibility of the LGBTIQ community, it can boost general support for their political demands.
Regardless of the industry in which your business is inserted, the most important thing is to approach this segment withrespect and tolerance, and see theLGBTIQ + communityfor what they are: people like anyone but with different consumption habits, and not as one potential gold mine ready to be exploited.
