Tapping into China’s Long-Awaited Elderly Demographic
It wasn't long after the establishment of the People’s Republic of China in 1949, when Chairman Mao started encouraging the population to procreate to create a strong China through "manpower". Although there was no official policy supporting the fertility drive, government propaganda condemned contraceptives and even banned the import of some. Soon enough, woman were having average of six children each and China's population had doubled.
After the introduction of the one-child policy in 1979, in the space of a generation, China's households transformed from large to tiny in the most extreme family planning shift the world has ever known. Add rising life expectancy which has increased from 46.6 to 77.5 since 1950, and the result is top-heavy demographics that make most countries' challenges with aging populations look like child's play.
In 2017, 240 million people in China were aged over 60, accounting for 17% of the population. By 2050, 486 million over-60s are expected to call China home - a whopping third of the population. By comparison, the 60+ demographic in the US at this time is expected to number 108 million, 27.9% of the population.
With such enormous numbers, brands have been seeking to tap into China's silver market for years - mostly with little success. The lucrative Baby Boomers in Western countries have spent up a storm on the back of decades of relative prosperity and accumulated wealth through numerous cycles of property appreciation. Yet China's equivalents are not such liberal spenders. Yes, China's elders have experienced enormous property appreciation, but most still remember the austere times of the Cultural Revolution between 1966 and 1976. These times have had long-lasting impacts on spending behaviour, much like the Great Depression did for many of our grandparents or great grandparents in the West. This, coupled with the age-old Chinese cultural trait of investing in the younger generation, hasn't seen China's elderly spending a lot on themselves historically.
However, the frugal habits of China's mature consumers are slowly changing. Those now entering the silver demographic are born increasingly later, and have been more impacted by the growing influence of consumerism since China opened up. Pre-covid, travelling the world was becoming popular. They've been buying more appliances and smartphones, health products and better quality food. Yet even with increased purchase intent, reaching and educating the demographic has proved challenging for most Western brands.
Although young Chinese are among the world's most savvy internet users, elderly Chinese are much less digitally literate than their Western counterparts. This makes digital channels quite ineffective to reach many of them. Most are disproportionately swayed by word of mouth, which is much tougher to influence than that of open-minded millennials.
Enter Coronavirus. For all the damage it has done, it is helping to finally unlock the enormous potential of China's silver surfers. The lockdown and subsequent increased hours at home has seen China's elderly spend more time with their younger, shopaholic relatives. This has both opened their eyes to more products and services, but also nudged more of them to get online where they can research and buy new things. As this infographic illustrates, not only are silver surfers the fastest-growing group online, but what they do is becoming more varied, providing more opportunities than ever for brands to reach them.
It seems the years of buzz around China's ballooning elderly population may finally be coming home to roost. Brands should think about developing products, services and a whole customer experience that will best connect with this group. Get in touch with China Skinny to learn how we can help.
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