Background to the Report
This report is intended to give UK companies a deeper understanding of one of the largest and fastestgrowing consumer segments in China – the over 60 age group. It discusses who they are, and what they do and buy, and explains how they differ in their values and life-stages.
The over 60 age group has an increased life expectancy and higher living standards, yet retains a traditional early retirement expectation. In addition to taking up a traditional role caring for grandchildren, they are starting to embrace consumerism and independence, often making up for their poorer younger lives.
As yet, few companies have attempted to serve the growing needs and aspirations of these mature Chinese consumers and have not marketed their products and services directly to them.
Highlighted sectors for elderly and maturing consumers in the report include:
- Medical products and services – medicines, disability devices, care services and housing;
- Consumer products – electronic devices, fashion and cosmetics, health foods and supplements; and
- Education and relaxation - further education, tourism, leisure and entertainment;
- Financial services – pensions, insurance and wealth management.
The report is based on analysis of market data and industry forecasts, and in-depth reviews and interviews with other experts and organisations. It is divided into four sections:
- Section 1: Summary of key findings
- Section 2: Overview of the cause and size of China’s ageing population
- Section 3: ‘Silver consumer’ profiles and trends
- Section 4: Consumption patterns and opportunities in key market segments
‘We urge all UK companies to read this report and take advantage of the opportunities in this rapidly growing and increasingly important consumer segment that more than ever before has greater spending power, more leisure time, improving lifestyles and higher expectations.’
- Stephen Phillips, Chief Executive, China-Britain Business Council
- China’s population is ageing rapidly. By 2050, China will be home to a quarter of the world’s elderly population. One in every three Chinese people will be older than 60 and among this one in five will be at least 80 years old. In 2015, the number of Chinese people older than 60 will exceed 220 million, more than the populations of UK, France and Germany combined.
- The same demographic trends affecting the world are affecting China’s rapidly ageing population: lower fertility rates, increasing longevity, and the ageing of the baby boom generations. Despite noting the importance of China’s burgeoning consumer market, few companies have paid enough attention to the mature consumer, thus opportunities abound across all sectors.
- The maturing consumer will become a significant part of China’s consumption growth over the next few decades, with their spending power estimated at a third of the economy, making China the world’s largest ‘silver market’. This means there are tremendous opportunities for businesses that shift their focus and act first in filling the existing market gaps by adapting and/or developing products and services tailored to the needs of older Chinese consumers.
- With increasing incomes and a wider range of global exposure and connections, China’s silver consumers are becoming more financially secure, open-minded and adventurous. They are found to be more positive for embracing new technology, willing to learn new skills and to try new things as they have a stronger desire to improve their quality and enjoyment of life.
- They are demanding and pursuing a wider variety of products and services, which can fit their modern lifestyles, ranging from the essentials such as medical products and health food to discretionary items including fashion, consumer electronics, travel and further education.
- Whereas five workers support each retiree today, in 2050 there will be more than one retiree for every two workers. A rapidly ageing population and a shrinking tax-paying labour force are putting more strain on China’s welfare and social security systems, which requires the financial sector to act more vigorously to provide sufficient financial security for Chinese retirees now and in the future.
Overview of the Cause & Size of China’s Ageing Population
In 2012, China recorded an absolute decrease in its working-age population (aged 15-59) for the first time since the country’s opening up in the late 1970s. China’s working-age population as a share of the total population will fall to 52% by 2050 from its peak at nearly 70% in 2010.
The UN estimates that China’s workforce will shrink from 938 million in 2015 to 726 million by 2050. The “demographic dividend” of mass mobilisation of China’s population into the workforce, which has driven its rapid growth in recent decades, is dwindling and is soon to disappear.
China’s Population: Age Distribution (millions)
China’s Silver Consumers
China’s dramatic changes in the past 30 years have greatly changed consumer attitudes and behaviours. However, the different generations still largely differ in consumption patterns, values and attitudes, often shaped by early life and defining events and experiences.
Opportunities in Key Market Segments
The market for China’s older age groups is still largely underdeveloped in terms of both product and service offerings compared to countries such as Japan. Some markets are still in the nascent stage of development while others do not even exist in China.
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