China's hyper-online elderly to spend $750 billion by 2035. How can brands tap in?

China is home to more than 280 million individuals aged 60 and above – 20 percent of its population. By 2035, spending by those aged 60 to 74 is expected to surge to $750 billion per year, a jump of more than 50 percent from 2020. This swell in consumption heralds a pivot to an older, wealthier demographic, brought about by urbanization and shifts in family dynamics post-one-child policy. While many businesses focus on Gen Z and millennials, luxury brands need to also capitalize on the expanding silver economy. What strategies should they employ to engage this affluent aging population? What digital behaviors characterize this senior demographic? And how will this demographic shape the future of luxury retail in China? Hyper online Defying stereotypes, China's seniors are incredibly online savvy. This demographic shift is evident in the digital spaces where China's elderly are not just online, but shaping the digital marketplace. The number of internet users over 60 soared from 30 million in 2016 to 153 million in 2022, according to the China Internet Network Information Center. A 2021 survey revealed that netizens nationwide spent an average of 3.74 hours online each day. Notably, over half of the country’s senior citizens exceeded 4 hours of daily internet usage. Instant messaging, e-commerce, and short video apps boast penetration rates of 90.6 percent, 85.0 percent, and 80.9 percent, respectively, among the elderly population. Seniors in China also have more time for leisure and culture, compared to their Western counterparts. Women in China retire at 55 and men at 60. Elderly engagement in the livestream economy “They may still have typos when sending messages to their relatives, but in the live broadcast room, they are like a duck in water, and the short video live broadcast platform contributes considerable income and traffic,” says Wenwei, a lifestyle blogger on 36kr. The elderly are now significant contributors to the livestreaming economy as well. For instance, "High heel Grandma Wang" racked up over $690,000 in livestream sales in 2020. McKinsey reported a surge in elderly engagement on China's premier e-commerce platforms, with senior monthly average users expanding at a rate roughly 30 percent quicker than other age demographics in 2020. In response, Chinese tech giants such as Baidu, Didi, Taobao, and JD have launched applications tailored to the senior demographic. A different demographic In the Western context, the term "old money" is used to describe generational wealth that has been passed down through families over time. However, the concept of legacy wealth in China differs significantly. As China’s economy opened up in the 1980s and 1990s, it is the generation who led that boom that is now entering old age. It is primarily their offspring who have assumed the role of predominant consumers of luxury goods and products. As part of the first group to experience China’s economic boom, these new seniors exhibit different characteristics to older age groups. "They are richer and highly educated," said Bian Changyong, an executive at Beijing Dama Technology, a social media agency. "For middle-aged and elderly people, one trusted traffic source is more important than thousands of other traffic sources combined. Once a consumption habit is formed, it has strong stickiness,” says Luo Ying, CEO of Baixing, a Chinese online classifieds website. Bian also said the pandemic resulted in the elderly going online more for shopping and entertainment. The elderly's consumption of culture, entertainment, and education is set to grow exponentially, with their spending on clothing alone predicted to reach $18.7 billion by 2050. China’s elderly are not fading into the background; instead, they're becoming central figures in the economy and holding strong in the digital realm. The future of spending in China is older, possibly wiser, but decidedly digital. As one popular livestreamer, Granny Yaqing who is 58, says, "Young people assume the elderly know nothing. Actually we know everything."

China's hyper-online elderly to spend $750 billion by 2035. How can brands tap in?

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Published November 08, 2023

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China's hyper-online elderly to spend $750 billion by 2035. How can brands tap in?