BEIJING: Senior citizens in China will spend 1.4 trillion yuan ($205bn; €144bn; £122bn) in 2010, rising to 4.3 trillion yuan by 2020, according to the China National Committee on Ageing, making this group an increasingly attractive target audience for marketers.
While many multinational brands have heightened their activity in the world's most populous nation during the economic downturn, they have typically focused their communications on younger age-groups.
However, the rise of older shoppers is argued to represent a key future trend in Chinese society, and research from Ogilvy & Mather has also found that while members of this group are the hardest to influence, they also tend to be the most brand loyal.
According to the United Nations, an "ageing society" can be defined as one where 7% of the population are at least 65 years old, a benchmark China reached in 1999.
Some 143 million adults in the Asian country were over 60 years of age in 2005, and it is estimated this total will reach 438 million in 2050.
Baidu, China's biggest online search engine, introduced a service specifically for older web users this year, as it sought to tap into the particular needs of this demographic.
Nestlé, the food manufacturer, has also launched a version of its milk formula range, which is typically made for babies, especially for elderly customers.
Yuwa Hedrick-Wong, an advisor to MasterCard, argued the “grey market” has “huge potential, but it is a very unique market. You really have to understand the people.”
"You have to look at their life experiences in determining how they behave. You cannot rely on models from overseas," he said.
One example of the financial muscle of retired Chinese consumers is in the international travel market, where they make up 13.5% of holiday-makers, but contribute 45% of all spending, Hendrick-Wong estimated.
Among the major differences within the "silver sector" is that between those living in rural areas, and their counterparts in metropolitan centres.
While 65% of urban workers have pension arrangements in place, this compares with just 11% in the countryside, the Center for Strategic and International Studies says.
Similarly, the average wage paid to people in the main cities and towns is said to be three times higher than in less developed regions.
As such, as 300 million people are expected to join the middle class in China over the next decade, the wealth levels of elderly consumers will have knock-on benefits for their children.
“In an urban setting, incomes are higher, and their children would have done a lot better. This is key: in the west the children are irrelevant, in the case of China it is completely different,” said Hedrick-Wong.
While many multinational brands have heightened their activity in the world's most populous nation during the economic downturn, they have typically focused their communications on younger age-groups.
However, the rise of older shoppers is argued to represent a key future trend in Chinese society, and research from Ogilvy & Mather has also found that while members of this group are the hardest to influence, they also tend to be the most brand loyal.
According to the United Nations, an "ageing society" can be defined as one where 7% of the population are at least 65 years old, a benchmark China reached in 1999.
Some 143 million adults in the Asian country were over 60 years of age in 2005, and it is estimated this total will reach 438 million in 2050.
Baidu, China's biggest online search engine, introduced a service specifically for older web users this year, as it sought to tap into the particular needs of this demographic.
Nestlé, the food manufacturer, has also launched a version of its milk formula range, which is typically made for babies, especially for elderly customers.
Yuwa Hedrick-Wong, an advisor to MasterCard, argued the “grey market” has “huge potential, but it is a very unique market. You really have to understand the people.”
"You have to look at their life experiences in determining how they behave. You cannot rely on models from overseas," he said.
One example of the financial muscle of retired Chinese consumers is in the international travel market, where they make up 13.5% of holiday-makers, but contribute 45% of all spending, Hendrick-Wong estimated.
Among the major differences within the "silver sector" is that between those living in rural areas, and their counterparts in metropolitan centres.
While 65% of urban workers have pension arrangements in place, this compares with just 11% in the countryside, the Center for Strategic and International Studies says.
Similarly, the average wage paid to people in the main cities and towns is said to be three times higher than in less developed regions.
As such, as 300 million people are expected to join the middle class in China over the next decade, the wealth levels of elderly consumers will have knock-on benefits for their children.
“In an urban setting, incomes are higher, and their children would have done a lot better. This is key: in the west the children are irrelevant, in the case of China it is completely different,” said Hedrick-Wong.
Data sourced China International Business; additional content by WARC staff
