Aging China: How Can Brands Get Involved?

by | Mar 4, 2016 | Chinese Market, Emerging Markets | 0 comments

By 2030, China will be home to a third of the world’s elderly population or 484 million elderly. In fact, China currently has the world’s fasting growing “silver market,” with 221 million elderly representing 18% of the world’s elderly population according to Emerging Communications. What does this aging population mean for Chinese brands and those looking to market goods in China?

The sheer numbers make Chinese seniors a big market. Sales of goods and services for the elderly could reach 106 trillion yuan by 2050, according to the China National Working Commission of Aging’s China Report on the Development of the Silver Hair Industry.

Important Markets for China’s Elderly

Within the next few decades, consumer trends for the elderly are expected to become more prevalent, meaning that companies need to understand the markets that seniors are interested in. Those markets include:

  • Medical Products and Services
  • Consumer Products
  • Education, Entertainment, and Relaxation
  • Financial Services

 

  1. Medical Products and Services

China’s demographic transformation has generated a whole new world of possibilities for marketers of medical devices and insurance companies. Statistics from the General Office of China’s State Council show that the country only had 3.15 million senior nursing beds by the end of 2011, enough to cater to only 1.77% of the 60-and-over population. As for life and health insurance, seniors are looking for specialty healthcare services that make sense for their area and come with doctors’ views or word-of-mouth recommendations from friends and family. For example, Taikang Life Insurance Corp, China’s fifth-largest insurer, came out with a new offering for China’s wealthiest seniors—targeting a demographic that would be most interested in their service.

  1. Consumer Products

While the consumer group aged 20-29 accounts for more than half of all Internet shoppers, more elderly Chinese are joining e-shopping activities. There’s considerable evidence and reason to believe that China’s elderly will look to online commerce as they seek out material benefits. Alibaba and JD.com have both rolled out senior-focused marketing pushes to tap into this market. In particular, Taobao launched a senior shopping section where products like slippers and long underwear are more readily available. It’s also important to note that China’s elderly enjoy selecting and paying for their own products, so attentive services and free trials are an important means of winning older consumers.

  1. Education, Entertainment, and Relaxation

The Chinese saying “live till old age, learn till old age” (活到老学到老) encourages the “silver market” to continue their studies until long after they’ve left school. A recent study revealed most Chinese elderly believe that lifelong learning is vital for individuals. In fact, by 2013, there were more than 40,000 universities established throughout China for the sole purpose of educating elderly citizens. E-learning, just like e-commerce, is another venue for the elderly to support and maintain their education.

  1. Financial Services

Banks have also begun to move toward and tailor their services to an older population. In 2013, China Construction Bank Corp. rolled out a card for the elderly that, when used at a pharmacy, links directly with the claims system of that person’s insurer. The card allows the insurer to decide, on the spot, whether to cover the transaction and by how much, which saves pensioners from having to pay up-front. For brands, ease of use and intelligent financial services are vital.

 

Important Factors for China’s Elderly Purchases

It’s not enough just to know where the elderly are going to make their purchases, brand marketers should also be aware of what is most important to the elderly. The “silver market” places a high emphasis on four specific areas:

  • Health and Wellbeing
  • Quality Goods
  • New Technology
  • Digital Connectivity

 

  1. Health and Wellbeing

Only 11.3% of 19.986 Chinese seniors polled nationwide by the China Research Centre on Ageing said that they would prefer spending their twilight years in a nursing home, which is why health and wellbeing products and services are vital for brands. Companies such as Abbot Laboratories in Shanghai are busy testing flavors of nutrition drinks for China’s senior citizens while the Swiss food company Nestlé, in 2011, began building free health-check stations that let seniors check their blood pressure and cardiovascular health as well as selling senior-targeted milk nutrition powder. However, brands need to understand that there’s no blind faith in healthcare products. The elderly prefer products that come with a doctor of friend’s recommendation.

  1. Quality Goods

A study published by the Hong Kong Trade Development Council’s (HKTDC) Research team discovered that China’s elderly middle-class people are willing to spend, particularly when it comes to purchasing health and lifestyle-related products such as saunas and training shoes. The study discovered that, although the elderly don’t care about famous brands, they do care about product quality and take a “results-oriented” approach. Brands should consider the idea that elderly consumers are willing to pay more for comfortable, good quality products than cheaper alternatives.

  1. New Technology and Products

Intelligent products and equipment that aids seniors are becoming increasingly popular. Particularly products that suggest treatment options, offer intelligent reminders, and provide robotic assistance. For example, in 2014, the Chinese electronics company Hisense Co. launched a smartphone for seniors which featured and easy-to-access flashlight and medical-help options. The phone also sends automatic texts to loved ones when seniors activate emergency functions. Brands should consider what new, convenient technology they can provide but should be wary of complicated devices with too many buttons, though multiple functions and features are important.

  1. Digital Connectivity

Elderly Chinese people who lived through the most tumultuous periods of the 20th century are often interested in making the best of their twilight years, which is why they’re interested in the rapid advancements of technology for connectivity. The opportunity for the “silver market” to engage with friends, family, and the community at large, in ways that were once impossible, is particularly interesting to seniors. For brands, this means combining their products and services with opportunities for the elderly to connect with each other and their family.