By Natalie Meyer, Marketing Manager at China Skinny Consultancy
‘China’s Silver Economy’ was published in the spring 2021 edition of the German Chamber Ticker. Editor: Noga Feige, Senior Editor of Ticker Magazine. Visuals: Matter Design.
China’s silver society currently makes up around 18% of its 1.4 billion population. By 2050, the number is expected to grow to one-third, making China the world’s largest ‘silver’ market, according to HKDC Research.
The spending potential of these elderly consumers is forecast to be a third of China’s GDP by 2050, rising from RMB 4 trillion in 2014 to RMB 106 trillion in 2050. Aside from personal savings, the World Advertising Research Centre (WARC) reported that 88% of Chinese also receive a per capita pension of USD 5,783 on average.
But it’s not just the smart money management of China’s senior citizens that makes them an interesting target for brands. They also enjoy a varied and engaging social life during their retirement years. Come rain, hail or shine, it’s common to see China’s elderly exercising outdoors and keeping mentally fit with a range of board games and lively social activities. From morning Taiji to afternoon mah-jong and xiangqi matches, evening strolls and group dancing, the twilight years are actively celebrated in China.
While China’s population is aging faster than most countries in modern history, the country’s senior community strays from traditional stereotypes when it comes to mobility and technology capabilities. Yet this large group is still overlooked by many brands, and only 8% of China’s seniors feel marketing campaigns target them.
Livestreaming With Grandma
The pandemic was a catalyst for even more of the elderly population to improve their tech literacy, as they took steps to safeguard their health. In just a quarter of a year, the number of internet users aged 60 or older increased more than it had in the previous three years combined. According to CGTN, the share of senior citizens among China’s 940 million internet users soared from 6.7% to 10.3% between March and June 2020. E-commerce giant Alibaba reported a year-on-year increase of close to 21% in online sales, with the elderly being the second fastest-growing consumer group.
Many senior citizens in China use a range of apps like Ximalaya, Douyin (TikTok), QQ, Taobao, Pinduoduo, JD.com and Tangdou on a daily basis. But the most popular social media platform amongst the elderly is WeChat – the super app that allows users to do everything from sending and receiving private messages to paying for groceries and booking train tickets. According to Reach Further by East West Bank, the over 60s age bracket of consumers spend 80% of their mobile data on WeChat, making them the app’s most frequent users. This is a huge contrast to the less than 7% of data that millennials allocate to WeChat.
And it’s not just Chinese youth who are drawn to the prospect of becoming influencers, or KOLs (Key Opinion Leaders) as they are known in China. Douyin, the Chinese version of Tik Tok, has also attracted the likes of Grandma Wang, a stylish 80-year old who released her first short video in November 2019.
Six months later, her account had grown to over 14 million followers. With the catchy user account name “Grandma Wang Who Only Wears High Heels” (只穿高跟鞋的汪奶奶), she demonstrates the fun-loving, humorous nature of her content.
When it comes to influencing consumer decision-making, brands also need to consider that China’s tech-savvy millennials are the children of the current elderly citizens, and that they are likely to make choices regarding the care of their parents. Digital marketing should be a crucial part of any campaign which aims to gain elderly consumers, given their super-connected millennial children.
Teaching the Elderly New Tricks
According to Protocol News, the small boom in tech products tailored toward elderly consumers started roughly five years ago. Tangdou, an app focused on dance classes for elderly Chinese women, has raised USD 32 million since 2015. Meipian, an app that offers easy collage and photo editing for social media and targets China’s aging generation, is worth over USD 27 million. Apps and services targeting China’s senior citizens are gaining traction, and the silver market is expected to grow exponentially in the following years.
China’s tech giants have started recognizing the consumer power of this unique group, developing creative ways to reel in new senior customers. Taobao, Alibaba’s online retail website, customized its app to be more elderly-friendly. In 2018, the company created two positions for elderly workers to get target market feedback on the app’s usability among the elderly. Taobao even launched a ‘pay-for-me’ link, allowing users to assist their senior family members with completing a transaction. Recognizing that information overload can be particularly overwhelming for older consumers, Alibaba simplified the app interface, included more shortcuts, and added a photo of the elderly user’s child on each page, allowing them to easily consult with their children about a specific product over message or call. Alibaba’s rival Jindong (JD) has also offered a suite of services to help level up seniors’ digital literacy. From tailor-made smartphones with speedy medical consult services and remote assistance to in-store app training, JD’s initiatives recognize the importance of the silver economy. In 2020, elderly purchases dominated JD’s online sales, becoming the fastest-growing group of new consumers at JD that year.
Helping senior citizens navigate the digital world has become a priority for the Chinese government as well. In December 2020, the Ministry of Industry and Information Technology announced a campaign to help the aging and disabled population by making around 160 apps and websites more accessible. A month earlier, China’s Cabinet mandated improved tech accessibility for elderly citizens and urged tech companies to develop products that were compatible with their needs.
What the Future Holds for China’s Silver Market
COVID-19 has seen an increase in online silver consumers, but many still refrain from shopping online due to their limited command of, and access to, technology. According to Mitsui & Co., rural areas were home to around 40% of China’s elderly in 2020. Around half of China’s 272 million senior citizens don’t have access to the internet. Yet it is becoming increasingly essential to have digital literacy in China, even more so during the pandemic. The digital divide between those reliant on their smartphones and those who are not has become particularly apparent over the past year, with citizens needing to show their health code at every turn.
The economic power of the silver society has been recognized in Western countries since years ago, but it remains a largely untapped market in China. As the number of elderly netizens continues to grow, more data on this consumer group becomes available and will help domestic and international brands better understand their online consumer behavior and shopping preferences. With access to this information comes a responsibility to offer products that better serve – and don’t exploit – the vulnerabilities of this community of technology newbies. ■
Natalie Meyer is a marketing manager at Shanghai-based consultancy China Skinny. She returned to Perth, Australia, in 2020 after two years of living in China. Natalie specializes in international communication, working in this capacity for Tsinghua University, the Australian Embassy in Beijing, the Foundation for Australian Studies in China (FASIC), and the Australian Institute of International Affairs (AIIA) WA.