China’s population is aging and an increasing number of these senior citizens are shopping digitally. It is believed that the digital competence level of Chinese seniors continues to rise, boosting the silver economy.
- According to China’s National Health and Family Planning Commission, the population aged 60 and above in China is expected to surpass 255 million by 2020, accounting for 18% of the total population.
- The number of “netizens”—people who use the Internet and participate in Internet activities—aged 50 and above totaled 80 million, representing 10% of all Internet users, per a 2017 study by China Internet Network Information Center (CINIC).
- Tech companies are implementing ways to provide a more digitally-friendly experience for Chinese seniors. For example, Alibaba launched an elderly-friendly Taobao app in January this year.
The Aging Population Brings With It a Bright Silver Economy
Like many countries, China is seeing its population age—and the scale of its total population means even incremental percentage changes in its age profile translate into very substantial absolute increases in its senior population.
According to the National Health and Family Planning Commission, the population aged 60 and above in China is expected to surpass 255 million by 2020, accounting for 18% of the total population. As a result, demand for elderly-oriented products and services is expected to grow continuously. The value of the silver economy is forecast to rise to around ¥106 trillion ($15 trillion) in 2050 from ¥4 trillion ($584.7 billion) in 2014, according to the China Report on the Development of the Silver Hair Industry 2014 by the China Research Center on Aging. Senior citizens are becoming a significant purchasing power segment for China’s economy.
In this report, we look at the growing number of Chinese seniors that are turning to the Internet and digital tools such as e-commerce platforms, mobile payments and health consultation apps, and the opportunities that this trend presents.
Internet-Literate Senior Citizens on the Rise
More and more seniors are taking their familiarity with technology from their working-age years into retirement. Reflecting this, surveys show an increasing number of Chinese seniors are connected to the Internet.
As the latest report on China’s Internet development by CINIC reveals, the number of “netizens”—people who use the Internet and participate in Internet activities—in China rose by 5.6% year over year to 772 million, as of December 2017, while the number of netizens aged 50 and above rose by 16.8% to 80 million. Internet users aged 50 and above accounted for 10% of China’s total users in 2017.
Senior Citizens Shopping Digitally
With more seniors surfing the Internet, a growing number have started shopping online, including on Taobao, the biggest e-commerce site in China.
In 2017, Alibaba, Alipay, Alitrip and Xiami.com jointly conducted a study on the Internet usage of the parents of millennials by utilizing big data analytics. According to the study, Taobao users aged 50 and above numbered more than 30 million, with over 75% of those aged between 50 and 59, and about 20% of those between 60 and 69. The Taobao users aged 50 and above are keen to spend—spending an average of ¥5,000 ($726) on Taobao for the nine months ended September 2017, with an average of 44 commodities purchased.
According to survey firm Prosper Insights & Analytics, the top-three sites for online purchases over the past year were Taobao, JD.com and Tmall.com. The 45–54 age group caught up with their younger counterparts in online purchases on the three platforms, and on average, 47% of them shopped on Taobao over the past year.
Chinese seniors are also accustomed to using mobile payment services. According to Tencent’s annual tracking of WeChat users, the number of WeChat users aged 55 and above rose drastically to 50 million in September 2017 from 7.68 million in September 2016. More seniors are using WeChat and they have caught up with the trend of using mobile payment. According to a joint study conducted by Tencent Research Institute and Shenzhen University on the WeChat usage of people aged 55 and above this year, 51% of the surveyed seniors have used mobile payment WeChat Pay before and 54% have used it to transfer money to others.
The aforementioned all show that Chinese seniors are becoming digitally savvy, opening up opportunities for e-commerce and creating room for growth in this area.
Tech Companies Accommodating the Needs of Senior Citizens
In view of the rising demand for elderly-oriented products and services, tech companies are coming up with ways to provide a friendlier digital experience for the elderly.
Alibaba launched an elderly-friendly version of its shopping app Taobao in January this year, with a simpler interface for senior shoppers to navigate. There is also a new “pay for me” function” on the app linking the elderly’s accounts to their children’s, allowing the children to pay for their parents and assist in their purchases. The “pay for me” function will give senior shoppers immediate support from their families, which can attract them to use the app more often. Aiming to create a pleasant app experience for its elderly users, Alibaba released job adverts to recruit two Senior Experience Officers aged 60 and above to gather seniors’ feedback in order to continue improving the app.
JD.com, the second-largest e-commerce platform after Alibaba in China, has been enhancing its delivery efficiency with an aim to permeate the vast rural territories of China. The company started using drones to deliver goods to customers two years ago which is likely to be particularly helpful for the elderly who live in remote areas and have limited mobility. The drone delivery service has made purchasing necessities easier for the elderly and raised the appeal of making online purchases on JD.com.
We expect a growing number of senior consumers to also make use of apps for health advice and consultations. For example, the dominant Chinese search engine Baidu launched a virtual medical assistant Melody in 2016 to answer patients’ questions by gathering available medical information. With more seniors going online, the usage of such self-help medical apps and gadgets is expected to grow.
Government plans to build a smart health and elderly care industry by 2020 will spur Chinese enterprises to devote resources to this area. We expect tech companies in China to capitalize on the ever-growing segment of digitally savvy seniors and launch more customized health apps and gadgets for the elderly in the near future.
China’s population is aging. The number of digitally savvy senior citizens is growing at a fast pace. Many Chinese seniors are embracing digital technologies as they shop on online marketplaces and settle with mobile payment. Similar to the younger generations, they are increasingly engaged in a pervasive digital lifestyle.
While demand for elderly-specific products and services continues to rise, tech companies are coming up with ways to better cater to the needs of senior citizens in order to extend the digital influence to a broader sphere of senior consumers. It is believed that senior citizens are another important growth driver for the Chinese economy in the near future.
Readers may also be interested in our report Mining Silver: Identifying Opportunities in the Senior Boom.