For Bloomberg: Unveiling the Empty Market of 280 Million People Through "Time"
Author：Linna Zhao,?Head of Thought Leadership and Marketing, Wavemaker China
Note: The original title is "Unveiling the Empty Market of 260 Million People Through 'Time'"看懂坐拥2.6亿人口的银发市场，答案在于“时间” . Due to statistical data updates, the title of this article has been changed to "Unveiling the Empty Market of?280?Million People Through 'Time'".
Key Topics:
01?The paradox of a "blank market" amidst 280 million people
02?Revealing the invisible and misunderstood group - The hidden people left behind.
03?The impact of "time" on past, present and future.?
04?Seizing opportunities of "time" to unlock value upgrades
05?Embracing outsider mindsets to transform the silver economy
01
The paradox of a "blank market" amidst 280 million people
As we step into 2024, China is experiencing a profound demographic shift. The first generation born during the era of reform and "opening up", often fondly referred to as the "new elders," is reaching the age of 60.?Our definition of "Opening up Newborns" is based on the year values formed according to generational characteristics and behavioural research rather than the year of birth. Simultaneously, those born after the 1970s are entering the 50+ age group. Since 1999, China has been transitioning into an ageing society, a transformation that has been unfolding for almost two decades.
The paradox of a "blank market" amidst 280 million people stems from the trajectory of the "Opening up Newborns" generation. Our interpretation of "Opening up Newborns" is derived from year values crafted through generational?characteristics and behavioural?research rather than the conventional method of defining generations by birth years. This generation, born during the reform and opening-up era, is at the cusp of a significant milestone. They will turn 60 in 2024, marking a momentous demographic shift. Meanwhile, those born after the 1970s have already started to enter the 50+ age bracket. Since 1999, China has been transitioning into an ageing society. A transformation that has been unfolding for almost two decades.
In the current landscape, China finds itself in a unique position. We have a staggering 19.8 per cent, or about 280 million individuals, aged 60 and beyond; we are boastful about having the world's most substantial elderly demographic.
The paradox is that despite this vast and influential consumer base, the "silver market" remains largely unchartered territory. When we say "blank", we don't refer to the absence of economic activity but rather to the underdeveloped nature of this market compared to its counterparts, like the youth-centric Generation Z market.
The measure of maturity is about the intricate interplay of factors. It's about how companies invest, their deep understanding of what these seasoned consumers genuinely seek, and the innovative business models they employ.
Finding a winning formula that resonates with the older generation that we can easily replicate in the realm of consumer products seems virtually elusive. High-value brands are scarce, and only a select few embody the aspirations of this ageing population that align with their lifestyle goals.
However, there's some participation in the "silver" market. An annual trend has begun since 2012 when a growing number of new startups in China have set their sights on catering to senior consumers. Furthermore, a handful of large-scale platforms have ventured into the "silver" sector. Yet, their journey is far from smooth.
So, the question looms. Why does this market struggle to mature despite an increasing number of specialised players entering the scene??What is their roadblock?
02
Revealing the invisible and misunderstood group - The hidden people left behind
The ageing demographic's participation in Internet shopping has shed light on their significant purchasing power and decision-making capacity. Consequently, an increasing number of businesses are recognising the sheer size and influence of this demographic. However, only a handful of organisations have taken concrete steps by investing and developing strategies tailored for the "silver" consumer. What we now require is a sense of urgency and commitment from a wide spectrum of businesses.
Four primary factors contribute to this situation.
Firstly, the issue of invisible people in the strategic quadrant, where the ageing demographic often goes unnoticed in business strategies. Secondly, the challenge of overly vague concepts hinders the delivery of focus and empathy in products and services. Thirdly, there's the prevailing consensus bias against "ageing",?leading people to believe that "they don't need it".?And finally, we'll explore the "dumbbell-shaped" market and its polarisation, which adds complexity to the silver market.
Reason No. 1??Invisible people in the strategic quadrant:
Our story begins with the issue of invisible senior consumers in the strategic quadrant. We scrutinise the matter through the lens of the widely-used four-quadrant approach, a standard tool for shaping strategic decisions targeting specific groups. Our analysis showed senior consumers consistently find themselves relegated to the lower-left quadrant.
It doesn't matter how we configure the horizontal and vertical axes, whether based on scale, importance, consumer confidence, or other prevalent dimensions; the result is the same. In this lower-left corner, senior consumers remain virtually invisible to the decision-making processes of most organisations. Their perpetual confinement to this quadrant results from organisations perceiving this demographic group with low assessments in critical dimensions.
Unfortunately, this invisibility translates into meagre investment budgets and limited resources, which hinder their ability to penetrate markets in the other three quadrants. Even when departments dedicated to ageing-related product lines are established, they often receive minimal resources and budgets, with some lacking even the basics for research.
This constraint impedes their understanding of consumer expectations, ultimately compromising the quality of products and experiences offered to seniors. The outcome negatively impacts sales, setting in motion a self-perpetuating cycle.
Reason No. 2??too vague concepts to deliver focus and empathy:
Our narrative unfolds further as we dive into the crux of the second reason behind challenges faced in the "silver"?market.?The presence of overly vague concepts hinders the ability to cultivate focus and empathy.
Upon sharing our research finding, we often encounter a recurring response: "It appears that senior consumers aren't a single homogenous generation. They encompass different generations." This realisation underscores how society has habitually lumped all "older people" into one generalised category of the "elderly".?Such a broad categorisation poses obstacles to our capacity to conceptualise and truly understand this diverse demographic. It also complicates the task of garnering support from younger generations spanning various age groups, especially given the glaring lack of research input in this area.
Let's take a moment to visualise the concept of a newborn baby. It invokes a myriad of resonant thoughts and emotions, from the challenges of post-partum depression to the heartwarming images of adorable baby faces and joyous smiles. Similarly, when we picture an 18-year-old embarking on their journey into adulthood and society, our minds are flooded with a multitude of poignant memories. These may include the nervousness and excitement of high school entrance exams, the significance of 18-year-old puberty rites, and even those cherished summer moments intertwined with the memory of one's first love, tucked away deep in the recesses of the mind.
However, the workplace landscape often lacks encounters with the unclear and broad concept of "old age". Many individuals find themselves navigating the complexities of senior demographics without the benefit of firsthand experience or meaningful interactions with senior citizens. This deficiency in personal relationships unintentionally hampers the development of transpositional thoughtfulness and empathy, creating an extraordinary challenge. Preconceived notions of "old age" further complicate matters, making it arduous for individuals to fully understand and empathise with senior consumers' unique needs and perspectives.
Reason No. 3??Under consensus bias against "ageing",?people believe that "they don't need it":
Regarding the ageing population, there appears to be an underlying consensus among the general public that they have "gone old". While the term "old" denotes an inherent and objective progression, it can elicit numerous negative connotations. These connotations include the idea of lagging behind, grappling with the challenge of adapting to new developments and a perceived decline in learning capacity and competence. Additionally, there's the inescapable sense of time's finiteness.
It's as though this generation's "front waves" have been metaphorically swept ashore by the relentless tides of time. Despite seniors championing lifelong learning and active participation in macro policy, businesses find themselves grappling with deeply entrenched biases, hindering them from making accurate assessments.
Moreover, a prevailing bias assumes that "they don't need it" or "they have no use for expensive/high-end products".?For instance, individuals may purchase the latest smartphone models for themselves while opting for lower-tier devices intended for older adults when buying for their parents. It's a regrettable reality. Additionally, it's relatively uncommon for younger developers in the product development industry to create products based on "what I think is suitable for older individuals" or "what I think young people would buy for their parents".?Many products targeting older people are often marketed towards their adult children, presuming they will purchase these items as gifts for their parents.
Reason No. 4??the "dumbbell-shaped" market and its polarization:
The current market landscape exhibits a distinctive deformation characterised by a phenomenon of polarisation, where there is a significant separation or division between different market segments. At its foundation, we find essential elements related to livelihood, primarily crafted to address security-related concerns such as community services and housing refurbishments for older people.
Conversely, elevated living services, including but not limited to high-end real estate, high-end finance, and luxury tourism, are concentrated at the uppermost level. As a result, the "silver" economy resembles a vertically positioned dumbbell, with the vast middle market lying disconnected. The areas that have witnessed substantial progress are predominantly within the healthcare sector or are mere extensions of other mass markets, lacking specialised products and services.
The "dumbbell-shaped" market and its polarisation explain why, despite having a population of 280 million, the market for products catering to the needs of an ageing population has not fully matured. So, how can businesses and entrepreneurs navigate their operations in such a complex environment?
In?our?perspective, the answer lies in "time".
03
Understanding the past, present, and future through the lens of "time"
Delving into the potential and driving forces of an ageing society has been an ongoing journey. Wavemaker China has been sharing insights through a series of five-chapter papers titled "Seniors in China: The 'Hidden Treasure'" since 2017. One of our significant research projects, "Embracing the Spring of the Silver Economy," featured as the fifth chapter, was a collaborative effort with Nestle Health Science.
Recently, we partnered with Shiseido China to conduct qualitative ethnographic research, aiming to uncover the nuanced factors contributing to the growing potential of the ageing demographic. Furthermore, we are excited to announce our upcoming joint publication, "Women aged over 50: 9 Keywords and Proposal about 'Beauty'",?which promises valuable insights into this dynamic demographic.
This series of inquiries has brought us to a significant realisation: understanding the concept of "time" is paramount when it comes to understanding the ageing population. However, "time" is a rather expansive concept. In the following discussion,?we?intend to explore how time impacts the ageing demographic by examining it through the perspectives of the "past",?"present",?and "future".
"Time" is a double-edged sword.?
The significance of the "past" cannot be overstated. As the adage goes, "to determine where we are going, we must first know where you have been".?The experiences and conditions that have molded our identities play a substantial role in shaping our present selves. While the "past" has undoubtedly had a profound impact on individuals, it has also, in some respects, placed limits on their potential for personal development.
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From the inception of the PRC's foundation to the era of reform and opening-up, the landscape of each period underwent significant changes approximately every 10-15 years. China's elderly population has been shaped over a remarkably extended period, resulting in distinct generations born at different points in time. In reality, China's ageing population comprises not just one, but three distinct generations of senior citizens.
Each generation carries a unique and profound imprint of the era in which they came of age. Therefore, it's vital that we explore the historical events that unfolded during their formative years, starting with the social context that influenced each generation.
Subsequently, we can delve into the experiences of specific individuals and micro-generations, as well as the shared values that underpin them. By gaining an awareness of their historical backdrop, we may be better equipped to discern the underlying values and behaviors of a particular era in a more tangible manner, ultimately aiding in our cognizance of their current characteristics.
Our definition of the ageing group primarily encompasses three distinct generations: the "Witnesses of Revolution," the "Opening-up Newborns," and the "Toughened New-China 1st Generation." These three descriptions reveal the remarkable differences between generations and their admirable qualities.
When we shift our focus to the "present" era, we witness not only the evolution of time and individuals but also the transformation of their perspectives and ideas. Over time, these notions go through a dynamic and ever-changing process, gaining more energy and clarity along the way. In the current landscape, the ample leisure time that retirement offers allows people to embark on a "second life" in a completely new way. This surplus of time serves as a crucial foundation and a source of psychological support for endless exploration.
While the "first life" before retirement may have been lived for others, the "second life" that follows is a journey of self-discovery. It's a time when individuals are re-energized to acquire new knowledge, pursue newfound passions, and venture into uncharted territories. China's societal backdrop creates a significant opportunity for widespread "self-reconstruction." Retirement, acting as a catalyst, inspires individuals to redefine their identities, become part of new communities, and reconfigure their aspirations.
Their current sense of joy in their "second life" stems from the excitement and resilience that come with a fresh start. What's even more remarkable is their perspective on the "future's" time. Despite the finite and uncertain nature of future time, the exact opposite of the inherent bias is true. They've cultivated a remarkable sense of vigour and enthusiasm during the duration of "today", driven by the awareness of the limited time ahead.
Our research discovered how time empowers people to rediscover themselves, embark on new journeys, and rejuvenate their lives. Based on the firsthand insights we've gathered through our survey, it's clear that "time" functions as a significant driving force behind our wants and behaviours, much like an engine.
One advantage of ageing is that individuals develop a heightened awareness of the passage of time, which can sometimes create a sense of accelerating anxiety. However, this temporal constraint also creates urgency and positive pressure. It inspires individuals to maintain an open mindset and complete focus, actively pursuing future opportunities to create new value.
They seize the fleeting moments, cherishing each "today" without regrets. Subsequent "today" moments become subjects of intense focus. One respondent even went so far as to place numerous hourglasses in his study as a mental reminder of time's passing. Additionally, respondents in our survey organised their schedules in ten-minute increments.
These behavioural patterns, whether overt or subtle, are intricately linked with the concept of "time". Behind this concept lies a world of immense possibilities.
04
Seizing opportunities of "time" to unlock value upgrades
The power of time becomes most apparent when we consider its various phases. Medical research has established the age of 75 as the threshold of adulthood, beyond which the proportion of individuals requiring some form of care or support increases gradually. This means that from the year of retirement until age 75, there are approximately 15 to 25 golden years, depending on the retirement age (typically 50 for females and 60 for males).
These golden 15 to 25 years represent the heart of the "second life".?They signify a notable period during which a large segment of the population must recalibrate their lives, re-learn and explore new horizons, and create new values. Furthermore, as the number of active seniors who live longer continues to rise, the golden age of the "second life" will be further extended.
During this golden age of 15 to 25 years, something interesting happens. Ideas on consumption would evolve at an accelerated rate. People become wiser and more professional when it comes to making buying decisions. They become more receptive, self-aware, and ready to invest in their dreams and enjoy the things they like.
For instance, did you know that nearly 80% of urban mature ladies have found ways to take care of their skin or enhance their personal style? And it's not just the ladies; almost half of the men are also stepping up and investing in their images. Their travel plans are getting more diverse and personalised, matching their more intelligent and tech-savvy lifestyles.
Something fascinating emerged when we investigated the "second life" through a zoom lens. It reveals that the hierarchy of wants is shifting, becoming increasingly skewed toward benevolence and value created for society. This shift leads to an increase in acts of goodwill and selfless actions.
People are capitalising on every opportunity to create meaningful value for their families, communities, and society at large, no matter how big or small. It's clear that many in the ageing population are stepping up their involvement in social and welfare initiatives, even volunteering their time. In our research, we've also discovered numerous examples of individuals making purchases with altruistic intentions.
Much like the mass market, each tier of the demand hierarchy contains a substantial business opportunity. In addition to value creation for society, they continue to share their perspectives and works on social media in an effort to gain recognition and esteem. Quite a few ageing Internet celebrities appear in our field of view. They enroll in professional courses or join specific equipment circles.
For instance, in the realm of tourism, a considerable number of professional photography groups already exist to capture professional works across the nation. They strive for advancement and novelty. They also remain active on social media platforms to attain recognition and esteem.
Each sector within the mass market can be extrapolated to the silver market, creating an opportunity for substantial expansion due to the time-sensitive nature of consumer demand.
05
Embracing "outsider" mindsets to transform the silver economy
Where will the dark horses of the "silver" market come from?
Similar to how young consumers and well-liked sports apparel brands may also attract the ageing population, these future market disruptors could emerge as established companies that break away from traditional mindset frameworks. They might even be high-value brands originating from the mass or young consumer markets.
We must adopt an "out-circle" mindset to establish a foothold in the "silver" market. This type of mindset means approaching investments in this market with the same commitment and enthusiasm as one would for the younger demographic or any other consumer group. Additionally, it's vital to prioritise meeting fundamental demands irrespective of age differences. Meeting these needs also involves dedicating ample resources to conducting surveys, developing tailored products and experiences, and delivering expert and attentive services.
When formulating precise strategies and executing operations, it's critical to approach them with fairness and avoid stereotyping by categorising them as simply "elderly".?To gain a comprehensive understanding of their behaviours and expectations, it's essential to employ more rigorous research methodologies, such as anthropology and ethnography, instead of just superficial observations.
Furthermore, in product design and research and development, it's crucial not to subjectively view this market as solely "elderly".?Avoid viewing the items you're creating and developing as exclusively "products for the elderly".?While the term "elder" is inherently neutral and objective, its misinterpretation and inherent biases can inadvertently affect our assessment.
Maintaining the proper focus and attitude is crucial for any business looking to enter the "silver" industry. They should increase their commitment to elevating the ageing demographic to a strategic position within the company. At the same time, they need to ensure they possess the necessary financial resources and determination to succeed in this market.
The "silver" industry in China has experienced three notable transformations. Firstly, the intergenerational composition of the ageing population has shifted towards younger generations, creating a demographic advantage for value generation.
Secondly, China's commitment to socialism with distinctive Chinese elements has provided advantageous financial support and regulatory measures for the "silver" industry, addressing structural market imbalances.
These transformations are expected to lead to substantial expansion in China's "silver" business, offering valuable insights, groundbreaking developments, and case studies for the international community in the coming years.
Finally, a tribute is dedicated to those firms and entrepreneurs who cultivated this field or are still exploring the "silver" economy.
The door to the vast world still awaits the key of "time" as well as the adherence of trailblazers.
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