The final consumption value of products and services designed with China’s growing older population in mind – a sector that is not yet “fully mature” according to a white paper released this week – has reached about 14.4 trillion yuan (US$2 trillion), an indication of the already ballooning industry’s prospects for further expansion.
Low-cost travel, e-commerce, live streaming by older influencers and sorghum wine – a high alcohol drink – are among that population’s top buys according to the white paper from Shanghai-based China Insights Consultancy and Chinese online education service QuantaSing Group.
“With rapid socio-economic development, increases in life expectancy, and a decline in fertility rates, China is gradually transitioning into an ‘aged society,’” said the paper, published Tuesday and presenting an analysis of survey results for 5,710 people aged 45 or higher.
“Currently, services and products [for the middle aged and their seniors] are not yet fully mature, presenting substantial market potential for investment and growth.”
That potential is being noticed. In a keynote address at the opening session of the 15th Annual Meeting of the New Champions in the northeastern port city of Dalian, Chinese Premier Li Qiang said the country is seeking improvements in elder care and support for the “silver economy”, calling the demographic a “valuable resource” for society.
“I think an effective response cannot only help us better respond to ageing, but also foster new growth drivers,” said Li at the event, organised by the World Economic Forum and also known as Summer Davos.
The white paper authors took age 45, rather than a higher number, as a starting point for their research because people partake in “economic activities related to elder care preparation” from that age, a QuantaSing spokesman said.
People in their late 40s and 50s tend to be better off than their younger compatriots – carrying the pensions of senior workers and comparatively unburdened by mortgages or unemployment – a divide that ensures those aged 45 to 60 are a valuable wellspring for consumption.
The country’s one-child policy, in effect from 1979 to 2015 and limiting most families to a single child, has contributed further to the trend.
On the travel front, 60 per cent of Chinese people over age 45 travel three or more times per year, though they are daunted by “high costs” and a lack of “suitable options”, the paper said, also finding the age group prefers travel that touches on humanities, history and traditional culture.
“Study tours that blend culture and entertainment are better suited to their needs,” the researchers said.
People over 45 also have a yen for sorghum wine, also known as baijiu, because the 750 billion yuan industry produces a drink seen as “highly social”, the paper authors said. Those consumers are 30 per cent of the total, “highlighting a massive market opportunity”.
In e-commerce, the paper said, 34.7 per cent of those 45 and older named online platforms as a normal shopping channel, while only 11.3 per cent of those over 75 do the same.
Online personalities catering to the growing demographic are “offering psychological comfort that satisfies basic emotional needs”, the researchers said. “As more seniors use and become familiar with content e-commerce platforms, their overall penetration rate will increase, providing momentum to the development of these platforms.”
The 45-plus contingent also shops lavishly for online classes, fitness programmes, beauty products and healthcare with strong “service quality”.
Similarities aside, consumers between 45 and 60 still spend differently than their elders, the QuantaSing spokesman said, with more attention paid to the brands of their daily necessities compared with their older peers.