SmartproducttailoredfortheelderlyLiuShuhui,inherearly60s,hasatightdailyschedule.Theleaddancerofasquare-dancingtroupe,Liu鈥檚opinionishighlyregardedinthecommunity.Peopleseekadvicefromheroneverythingfromshoppingforselectitemstotravelandpersonalfinanceproducts.
Besidesbeingadancefanatic,theretireefromShijiazhuang,capitalcityofnorthChina鈥檚HebeiProvince,pourslargeamountsofenergyintoselectingusefullifestyleproducts,bothonlineandoffline,andsharingthemwithherpeersviaaWeChat[aChinesesocialmedia]group.鈥淭heytrustme,soI鈥檇liketocontribute,鈥滾iutoldChinAfrica.
LiuisaclassicexampleofthelucrativeandyetuntappedconsumermarketgeneratedbyChina鈥檚largeelderlypopulation.Observerssaythemarketvalueofthisdemographicisexpectedtosoarinthenextfewdecadesinsectorssuchasretail,tourism,healthcareandnursingservices,personalfinanceandlifestyle.ThecurrentgenerationofretireesismoreaffluentandoptstoacceptthenewideasoftheInternetage,thusprovidingafoundationforupgradingChina鈥檚consumptionpattern.
Boostingconsumption
鈥淏y2030,thespendingofChina鈥檚60-pluspopulationwillreach50-100billionyuan($7.9-$15.8billion),鈥漵aidSunChao,apartnerandsenioradvisoronChina鈥檚healthcaresectorwithPwC鈥檚Strategy&.
HispredictioniswellgroundedinfactasChina鈥檚ageingpopulationisgrowingatanalarmingrate.AccordingtostatisticsreleasedbyChinaNationalWorkingCommissiononAgeing(CNWCA),thecountry鈥檚populationaged60andabovetotaled241millionbytheendof2017,or17.3percentofthetotalpopulation.Thefigureisexpectedtoexceed480millionin2050,accountingfor34.9percentoftheentirepopulation.
Chinahasundoubtedlyenteredtheeraofanageingsociety.ButforLuBaifu,formerDeputyDirectoroftheDevelopmentResearchCenteroftheStateCouncil,theageingsocietyisgoodforbusinessandcouldcreateasilvereconomythatwillspurconsumptiongrowthifitiswelltapped.鈥淪upportingtheelderlypopulationshouldnotbeonlyinterpretedasasocialburden,butasaburgeoningindustrythatiscreatingnewdemandsandemployment,鈥漢eadded.Oneofthecontributingfactorsmakingitsuchalucrativesectoristhattheelderlyhaveafatwallet.AccordingtoCNWCA,45percentofurbanelderlyresidentshavebanksavings.Bankdepositsbytheelderlyexceeded17trillionyuan($2.67trillion)in2016,withper-capitadepositsstandingat80,000yuan($12,575).
Withdisposablesavingsathandandachangingmindsetonconsumption,China鈥檚retireesareeasilyinducedtopayforgoodsandservices,whichisespeciallytruewiththoseonthecuspofretirement.Theconsumptionpatternofthoseborninthe1950sandlaterispresentingnewhallmarks.鈥淐omparedwiththepost-1940sgenerationwholeadathriftylifeandareconservativeinspending,thepost-1950sandpost-1960sgenerationstendtobemoregenerousinspending.TheygetoldandbecomerichpersonallywithChina鈥檚economicrise,鈥漵aidLiDayan,PresidentofDaAiCityInvestmentHoldingsCo.Ltd.,aBeijing-basedrealestatedeveloperspecializinginservicesfortheelderly.
Valuingqualityoflife
Specifically,thechangeisthattheirspendinghabitisevolvingfromfocusingonlifenecessitiestovaluingentertainment,experienceandqualityofproductsandservices.
鈥淭hemarkettrendiscorroboratingthetheoryasmoreandmoreretireesarewillingtopayforupmarkettraveltours,healthcareservices,andproductstailoredtotheirneeds,鈥漵aidLi,whoisconfidentinthefutureofthesilvereconomyandhasinvestedheavilyinthesector.
Squaredancinggrannies,likeLiu,areseenasthegatewaytoprofitingfromthesilvereconomy.Businessesliketravelagencies,retailersandbanksmoveintoharnesstheirspendinghabitandtoselltheirproductsorservices.鈥淎bout30ofusfromthedancinggroupjustcamebackfromvisitingThailand,whichcostabout5,000yuan($785.8)eachforasix-daytour.Itwasawonderfultrip,andweareallsatisfiedandwillplanmore,鈥漵aidLiu.
AreportonChina鈥檚elderlytravelmarketreleasedbyCtrip,aBeijing-basedprovideroftravelservices,in2016showedthatChineseretireesmadefourtraveltripsonaverageeveryyearwitheachspending4,000yuan($628.7).Fifteenpercentofthemtendedtochoosecruisetours,afiguresignificantlyhigherthanthatofotheragegroups.Theyarealsonowoptingtohaveexpensivecustomizedtours,withordersinthiscategoryincreasing5-foldthatyear.
Dailylivingandentertainmentexpensesandpurchasesoffinancialproductsarejustthetipoftheicebergoftheelders鈥檚pending.Theareaattractingheavyinvestmentisthenursingandhealthcaresectorsfortheelderly,especiallywithastreamofgovernmentpolicysupportputinplaceoverthepastfiveyears.Totheelderly,especiallythosewithchronicdiseasesorlosingself-careabilities,theneedfordailycare,healthcareandrecoveryareunconditional;butthereiscurrentlyahugegapbetweensupplyanddemand.
Tofillthegapandmeetthediversifieddemands,thegovernmentexplicitlyallowedprivatebusinesses,includingforeignones,toinvestintheelderlynursingandrelatedsectorsin2013,andhasintroducedfavorablepoliciesintermsofmarketaccess,finance,taxationandlandusesincethen.
Long-termview
However,despitethisvastuntappedpotential,thefledglingnursingindustryisalsocloudedwithinvestmentrisksduetolackofamatureprofitmodel.鈥淩unningnursinghomesandelderlycareinstitutions,especiallyupmarketones,requiresheavyandlong-terminvestmenttonurturethemarket,andthusisnotanappropriatestrategyforbusinessesthatlookforinstantprofits,鈥漵aidYuWenxin,ahealthcaremarketspecialistwithHaitongSecurities.
HuChiechoedYu鈥檚sentimentsandaffirmedtheprivatesector鈥檚roleinmakingupthegapofdemands,stressingthenecessityforasuccessfulbusinesstounderstandtheircorporateresponsibilitieswhenoperatinginthesector.鈥淭hesupportingpoliciesaresignificantastheywillregulatebusinessesthatarepurelypursuingprofits,andensurethefacilities鈥檖urposeofservingthewellbeingofthepublic,鈥漵aidHu,aresearcherwiththeResearchCenteroftheStateOwnedAssetsSupervisionandAdministrationCommissionoftheStateCouncil.鈥淪upportingtheelderlyisapubliccause,鈥漢esaid.
LiDayanbelievesthatinvestorsneedtoseethelong-termpicture.鈥淚鈥檓confidentoftheprofitabilityofthesectoroftailoredservicesthatmeetthegreatdemandoftheelderlyfornursing,entertainmentandcompanionship,鈥漢esaid,addingthatultimately,qualityservicewillbethekey.Tothisend,itisalsoimperativetocultivatehigh-qualityprofessionalsspecializedinnursingandrelatedservicesandimprovethepaymentandbenefitssystemsoastoretainpeopleemployedinthesector,saidHu.
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