Aging society set to stoke consumption
Aging population set to strengthen workforce, stoke consumption, upgrade industry
In an aging society where consumption upgrade is the new normal, elderly Chinese consumers are pursuing high-quality lifestyles with gusto — and their choices and preferences are spurring the growth of the so-called silver-haired economy comprising multiple sectors like elderly care services and elderly tourism.
Compared with other countries, China’s aging society is characterized by a large population base. Currently, Chinese people aged 60 and above number 264.02 million, or 18.7 percent of the total population, up 5.44 percentage points from the level seen in 2010, according to China’s latest national census.
Their number — 264 million — is humongous, and larger than the collective population (217 million) of Germany (around 84 million), the United Kingdom (68 million), and France (65 million). For perspective: the population of the United States is around 333 million.
The elderly segment of the Chinese population is bound to receive attention this year that marks the start of China’s 14th Five-Year Plan period (2021-25). The first year of the plan’s implementation of national strategies will see an active response to the challenge of serving a large aging population.
In late May, China announced its latest policy to allow all married couples to have up to three children, scrapping the earlier second-child policy. The country also aims to gradually raise the age for retirement to increase the total workforce.
“An increasing number of elderly people could mean an opportunity to have a large workforce with in-depth knowledge and solid work experience,” said Fu Yifu, a senior analyst at the Suning Institute of Finance, a research institution of Suning Finance.
“The increase of average life expectancy is expected to promote the increase of average years of schooling, and thus raise the overall quality of workforce in China, and the accumulation of human capital will help make up for the decline of demographic dividend,” Fu said.
“An aging trend is also expected to drive the upgrading of industrial structure from labor-intensive to knowledge- and technology-intensive, and inject impetus into the high-quality development of national economy,” he said.
Given different consumption habits and preferences of different age groups, favorable policies and more investments from business entities are urged to satisfy the demand for upgrade in the elderly consumption market, industry players said.
Yet, the tourism market still lacks enough travel products that are particularly designed for middle-aged and elderly travelers, but more operators are increasing investments in the segment.
This year, middle-aged and elderly consumers are expected to spend more than 700 billion yuan ($109.3 billion) on travel, and the average compound annual growth rate of the past five years is predicted to reach 23 percent, according to Guangzhou-based consultancy iiMedia Research.
Tuniu Corp, an online travel agenthat cy based in Nanjing, Jiangsu province, said it has placed great emphasis on the development of the elderly travel market. In 2016, the company launched an independent brand focuses on the elderly travel business. Now, the brand has more than 100 routes customized for elderly travelers.
One such custom product is red tours, which have added significance this year that marks the centenary of the founding of the Communist Party of China. Tuniu said it has selected representative “red tourism” spots and other popular places of interest in Jiangxi province and other regions, and designed special red tourism routes to meet the demand of patriotic elderly people who display a willingness to travel.
“For those routes designed for elderly travelers, destinations are mainly safe places with balmy weather. The schedules are mostly slow-paced, and elderly travelers won’t feel overly tired,” said Wang Shubai, vice-president of Tuniu Corp.
“Next, Tuniu will offer more detailed travel products to satisfy different demands for social, photography and healthcare activities of middle-aged and elderly travelers. We will launch more high-quality products and provide better tour guide services,” Wang said.
With the COVID-19 pandemic being increasingly brought under control in China, a large number of elderly travelers took trips before or after the Labor Day holiday in May to stagger the travel peak period.
So far this year, Hainan province and Beijing emerged the most popular destinations for elderly travelers, and the booking volumes for the two places accounted for nearly 50 percent of the total orders among elderly travelers. Besides, more than 85 percent of elderly travelers chose to take trips that last for more than five days, according to Tuniu.
Meanwhile, industry experts said China should continue to increase the supply of innovative and tailored elderly care services for elderly consumers.
As people age, they often face eye problems like presbyopia and cataracts, which require eye care products and solutions. In China, 92 percent of those aged 40 and above have vision difficulties, according to a survey of Ipsos, a global market research institute.
Presbyopia is a natural condition related to aging, just like gray hair. With the widespread use of the internet, and with online working becoming increasingly common, the increasing incidence of eyestrain has led to more visual problems.
In late May, China launched its first presbyopia surgery center at Beijing Tongren Hospital, a major healthcare facility that is renowned for ophthalmology. The center is expected to help more people overcome or cope with elderly vision problems and have better vision.
“China is increasingly becoming an aging society, and the life expectancy of the Chinese has increased. Eyes usually age the first. Many people are used to wearing presbyopic glasses. The surgery center at Tongren will help improve eyesight for many healthy middle-aged and elderly people,” said Wei Wenbin, deputy dean of Beijing Tongren Hospital.
On another front, Taikang Insurance Group, a major insurer, has developed a complete medical and healthcare business network. In 2007, the company started to expand its business in the market for elderly care services.
Currently, Taikang has established community elderly care centers in 22 cities, including Beijing, Shanghai, Guangzhou of Guangdong province and Chengdu of Sichuan province, and every center is equipped with a rehabilitation hospital that is specialized in geriatric diseases.
Besides, Chinese real estate developers Evergrande Group and China Poly Group Corp Ltd also expanded their businesses in the integration of hospitals and elderly care service communities.
For elderly care-related sectors, the government could support their development with financing like policy-based bonds and government-backed business loans, said Dong Keyong, secretary-general of the China Ageing Finance Forum (CAFF50) and a professor at the School of Social Sciences at Tsinghua University.
“From the perspective of industrial financing, the return cycle of the elderly care sector is relatively long, and the profitability is not high enough. We should increase support in the financing of elderly care institutions,” Dong said.
An aging trend is also expected to drive the upgrading of industrial structure from labor-intensive to knowledge- and technology-intensive, and inject impetus into the high-quality development of national economy.”
Fu Yifu, a senior analyst at the Suning Institute of Finance