Why Chinese Pensioners' Purse is so Important
China's youth seem to get all the attention. Right from day one, most are pampered by doting parents and two sets of grandparents. They are typically better educated and more likely to live in cities, resulting in higher average incomes than those 10-20 years older. Their more liberal attitude to consumerism sees most marketing directed their way.
Nonetheless, China's swelling pensioner population are increasingly on the radar of businesses selling in China. With some Chinese retiring as early as 50, the pensioner pool is proportionately larger than most countries, particularly when coupled with the relatively small youth segment resulting from the one-child policy. The number of Chinese aged over 65 are expected to grow from 8% of the population today, to 25% by 2050, with spending rising from ¥4 trillion ($640 billion) to ¥106 trillion ($17 trillion).
Demand for products and services such as health, nutrition, travel and nursing homes are set to soar, but the age group will make an increasing impact across the board.
It's not as easy to reach elderly through the online channels that strongly influence younger demographics. Just 5% of mobile Internet users are aged over 46. However, those digitally connected are typically quite persuasive in their networks' purchase decisions. Their online activity is often more narrow than adventurous youngsters, meaning they can be more efficient to reach.
The rate elderly Chinese are getting online is being helped by some of China's pioneering companies. Xiaomi targets elderly with easy to read text and big buttons on its entry-level HongMi smartphone, a similar tactic to Hisense, who recently launched a smartphone for the elderly. In 2013, online shoppers aged over 50 accounted for just 2 million of Alibaba's customers, but the company has increasingly focused on the group with initiatives such as launching a senior shopping section on Taobao with products like slippers and long underwear.
Another way to reach older consumers is through their younger influencers. A good example is the education programme for young Chinese to encourage them to help reduce the worryingly-high salt intake of older generations.
There are a number of creative ways to reach the ever-more aging Chinese consumer - the first step is to understand them and their influences. If you're targeting less mainstream markets in China, contact us to see how we can help. We hope you enjoy this week's Skinny.
Chinese Consumers
Tapping China’s ‘Silver Hair Industry’: China’s over-65 population is projected to soar from 110 million today to 210 million in 2030, reaching a quarter of China’s population by 2050. Sales of goods and services for the elderly is expected to rise from ¥4 trillion ($640 billion) last year to ¥106 trillion ($17 trillion) by 2050 according to China National Working Commission.
Domestic Consumption Set to Become China's Main Economic Driver: Consumption contributed 51.2% to China's GDP growth in 2014, up from 48.2% in 2013. Total retail sales rose 11.9% to ¥26.2 trillion ($4.2 trillion), with car sales up 6.1% and household appliances 12.6%.
China's Streaming Fans Face a Long Wait: State censors are applying an increasingly heavy hand to ensure content that is widespread in Western culture, such as shots of cleavage, are removed for Chinese viewers.
US Flag on WeChat App Causes Storm: WeChat won't be winning any favours with Beijing, following a 'technical glitch' that showered Chinese users' screens with American flags if they discussed civil rights around Martin Luther King, Jr. Day - check out some of the comments on state-run Global Times' article.
Unilever Profit Rises Despite China Sales Slump: Unilever's China sales dropped around 20% in both Q3 and Q4 last year, mainly due to Chinese retailers reducing the stock levels of their goods. Unilever have said consumers are less likely to pay more for branded products. Nielsen research from November 2014 suggested almost 60% of Chinese consumers believe name brand FMCG products are worth the extra price.
Health
‘Little Emperors’ Wage War on China’s Deadliest Killers: The average Chinese consumer eats 12 grams of salt a day, more than the 8.7 grams Americans eat and the WHO recommended level of 5 grams. The popularity of salty stews and hotpots in China, has lead to an estimated 270 million Chinese suffering from hypertension, contributing to 2 million deaths a year. In the nine provinces of China's north and west salt belt, stroke rates are more than twice as high as the national average. Now the precious only child is being used as a channel to educate families on reducing salt intake.
Internet, Social Media & Ecommerce
International WeChat Accounts: Not Quite What You Think: Clarification of the limitations of foreign businesses setting up official WeChat accounts abroad.
Rural China: The Next Battlefield for Domestic E-commerce: Less than 30% of China's more than 600 million rural residents are on the Internet and only 10% have bought things online. AliResearch, the research arm of Alibaba, estimated that China’s rural e-commerce market reached ¥180 billion (US$29 billion) in 2014 and will exceed ¥460 billion ($74 billion) by 2016.
One Billion Harmful, Erotic Posts Deleted in Year-Long Internet Cleanup: Chinese authorities closed down 2,200 websites and 20 million online forums, blogs and social media accounts last year for spreading pornographic and illegal posts. More than a billion inappropriate posts were removed by sites, a number of them said to be the result of bribes and PR firms working for affected clients.
One Third of Sample Goods Bought from Chinese Websites ‘Fake’: 41.3% of products bought online in China were fake or substandard according to a small study done by the China Consumers' Association. Just 28.6% of mobile phones, and two-thirds of both clothing/apparel and toys were found to be genuine. 37.3% of products sampled from Taobao, 80% from Yihaodian, 85.7% from Tmall and 90% from JD.com were authentic.
Environment
Chinese Director's Film For Greenpeace Shows How Smog Changes Everything: 7 min vid: Renowned Chinese director Jia Zhangke worked with Greenpeace on a film titled “Smog Journeys,” examining how air pollution affects families at all rungs of China’s society. “We wanted to make a film that moves people, not frightens them,” Jia said, hoping to touch people at an emotional level that will push Chinese of all demographics to help fix the problem. In a rare bright spot through the fog, according to the figures from the Ministry of Environmental Protection, pollution fell in 71 of 74 cities monitored, although it remains dire.
Food & Beverage
Social Wine App Targets Chinese Drinkers: Only three in ten Chinese wine consumers drink once a week or more. Many cite a lack of occasion as their main reason for not drinking more wine so a new startup called Hesha connects users based on mutual interests in alcohol, particularly wine, using their location.
On the Sliding Market Share of French Wines: The average price of French wine imported into China dropped from $4.52 to $3.73 per bottle between 2011 and 2014, with France's share of import volume falling from 48.9% to 43.4%. Southern Hemisphere wines have a timing advantage through harvest, winemaking and sales, reaching China just in time for the Spring Festival shopping season.
Fashion
What the Fu? Backlash for Burberry Over Chinese Scarf Design: Burberry has copped a lot of flack on Weibo for a Chinese New Year scarf, with many calling the company's taste, pricing and positioning into question, with some claiming it looks fake.
Auto
Carmakers Face Fresh China Import Threat: Parallel imports of cars in China's Free Trade Zones are bringing discounts of around 20% for consumers.
That's the Skinny for the week! See previous newsletters here. Contact China Skinny for marketing, research and digital advice and implementation.
