China’s old individuals have increasing consumer clout. Organizations are getting on.
For quite a long time, Nestle SA has attempted to get its infant milk powder under the control of China’s new moms with guarantees of brighter, more healthier infants. Presently it’s attempting to do the same for the elderly. A week ago, the organization propelled “Settle YIYANG Fuel for brainTM senior drain powder,” an equation intended to help China’s seniors “refuel their brains and begin a new brilliant and smart life.”
The announcement didn’t get quite the publicity that products targeted to China’s millennials do. But it may yet turn out to be more significant. With 222 million people over age 60, China is home to the world’s largest population of seniors, and their economic leverage is set to surge in the coming years. According to one estimate, the value of products and services directed towards them may reach 33 percent of gross domestic product by 2050.
If that trend kicks off, taking care of seniors will be China’s most prominent industry by the middle of the century, and old folks will be its majority demographic. That presents a plethora of challenges for the government, but also some major opportunities for business.
Seniors are already playing a key role in moving away China’s economy from exports and toward consumption. Fan Min, president of China’s biggest online travel site, predicts they’ll be the primary sources of the country’s tourism market within a decade. About 5 million of them are traveling overseas at least once a year, with that number expected to more than double by 2030. As they venture out, the travel industry is conforming to their demands (by offering more group tours and cheaper accommodations, for example). And it’s not just tourism: In recent years, businesses ranging from car companies to online marketplaces have come up with features marketed to China’s senior citizens.
Health care is another industry that may be metamorphosed. Unlike Japan and Western Europe, China is aging before it has grown rich enough to develop the institutions, such as nursing homes, required to sustain a huge senior population. Increasingly, the private sector is stepping in. For those who can’t afford to travel overseas, private preventative care is becoming much more recurrent. In other places, companies are developing “smart care” products, in which internet-connected gadgets track the health of customers. Beijing is developing a program that uses a discount shopping card to monitor seniors while applying data analytics to anticipate their needs.
Nestle clearly understands these trends. At the launch of its new milk powder for seniors, a company official told the press: “As an old Chinese saying goes, ‘Diet cures more than the doctors.'” Long-term, that attitude, combined with investing money in health-focused artificial intelligence and big data by companies such as Alibaba Group Holdind Ltd. and Baidu Inc., may well reform the health-care industry, both in China and worldwide.
But the area where China will have the biggest influence on the market for senior services will most probably be housing. As of 2015, China had an average of only 26 nursing beds for every 1,000 seniors. Over the coming decades, it’s not very likely that the government will be able to construct, much less staff, nearly enough facilities to meet the demands of its growing senior population. As a result, it will need to come up with new and more creative models for senior care.
That might entail more automation. It could mean home care that’s supported by a network of internet-dispatched delivery services (especially for food). And it will surely mean an expansion of smart monitors and technology to interpret the data they gather. Considering the size of the potential market, there’s reason for optimism that the China’s budding entrepreneurs can find out low-cost models that work at home, and probably overseas as well.
For China’s present era of seniors, having become an adult during an time of worldwide seclusion and local hardship, that is a level of impact few could have envisioned in their youth.