China at Japan's 1990s Aging Crossroads: How Will It Solve the Elder Care Challenge for Nearly 200 Million Seniors?

In 2021, China’s birth rate fell below 1%, while the proportion of elderly people reached as high as 13.5%. It is projected that around 2033, the elderly population will exceed 20%, marking the country’s transition into a super-aged society... These few data points alone underscore the severity of China’s demographic challenges. The intense policy focus, continuously expanding market size, and rapid influx of capital have answered one question: China’s eldercare and health industry is ushering in a new phase of transformation.

Coincidentally, China’s current birth rate and aging rate are exactly at the same levels as Japan’s in 1990. In recent years, under the pressure of population aging, Japan’s elderly care industry has become highly developed. Its relatively comprehensive elderly care security system and service network have also effectively alleviated the pressures brought about by aging and declining birth rates.

Thirty years on, the latest data show that 29.1% of Japan’s population is aged 65 or older, and the average life expectancy has reached 84.2 years. Supported by continuously innovating healthcare systems and increasingly robust social security mechanisms, Japan is moving toward the goal of a “100-Year Life.”

What insights does Japan’s elderly care sector, which has been evolving for over 30 years from a similar starting point in population aging, offer for the development of China’s elderly care industry over the next three decades? As two Asian nations, how do the development trajectories of their elderly care industries differ? VCBeat interviewed Qiu Congbo, Chairman of Shouhujia, who has been deeply engaged in Japan’s elderly care industry for many years. The aim was to examine the differences between the Chinese and Japanese elderly care markets from the perspective of an industry participant, and to explore how tailored solutions can be provided in response to distinct national contexts and market demands.

As a country with a long-standing aging population, Japan has a highly developed elderly care industry. After three decades of exploration, Japan has gradually established a model of elderly care services tailored to its national conditions.

Drawing on the “Social Embeddedness Theory” proposed by American sociologist Mark Granovetter in 1985, Japan has successively introduced a range of initiatives, including the Gold Plan (1989), the New Gold Plan (1994), the Gold Plan 21 (1999), the Long-Term Care Insurance system (2000), and the New Orange Plan (2015). These efforts have gradually shaped a community-embedded elderly care model characterized by multi-stakeholder participation and diversified services, integrating self-help, mutual aid, cooperative assistance, and public support.

The content and embedding models of community-embedded elderly care services in Japan continue to expand, with service delivery becoming increasingly flexible and diversified. Currently, Japan’s community-embedded elderly care services are broadly categorized into institutional care services, home-based care services, area-intensive services, and barrier-free apartments for the elderly.

China’s “community-embedded elderly care” originated in 2013 from elderly care initiatives in Zhuanqiao Town, Minhang District, Shanghai. The community-embedded elderly care model has been widely recognized and welcomed for its advantages, including its small footprint that addresses the land acquisition challenges faced by traditional elderly care institutions, its proximity to seniors’ homes which enhances acceptability among the elderly, and its ability to provide community-based support services for home-based elderly care.

Since the second half of 2014, Shanghai has launched pilot programs for community-embedded elderly care, primarily in the form of comprehensive community senior service centers and elder care homes. These initiatives have been included as key livelihood projects by the Shanghai Municipal Government since 2015, ushering in a period of vigorous development for community-embedded elderly care. Subsequently, provinces and municipalities such as Beijing, Chongqing, Zhejiang, Jiangsu, Anhui, Hebei, and Hubei have drawn on Shanghai’s experience and successively begun to explore the development of embedded elderly care models.

In 2017, “embedded elderly care” was included in national policy documents for the first time. The Notice of the Ministry of Civil Affairs and the Ministry of Finance on Doing a Good Job in the First Batch of Pilot Reforms on Home- and Community-Based Elderly Care Services Supported by Central Fiscal Funds required that “priority be given to establishing embedded home- and community-based elderly care service facilities and institutions.” Since then, “embedded elderly care” has become a phenomenal buzzword in China’s elderly care industry over the past two years, and “community-embedded elderly care” has also become another pioneering initiative led by Shanghai, following its “9073” model, to steer the development direction of the elderly care service sector nationwide.

Not only in service models, but Japan has also established a stable system in areas such as insurance reimbursement and health information technology infrastructure.

Implemented in 2000, the Long-Term Care Insurance System proposes that the responsibility for elderly care be shared by society as a whole. It clearly stipulates that insurance premiums are to be borne by the national government, prefectures, municipalities, and individuals in corresponding proportions, thereby providing significant support for the development of Japan’s elderly care service system.

In the development of smart elderly care, Japan is accelerating the R&D of IoT, AI robots, and other intelligent devices, with a focus on supporting the development and promotion of smart products for health monitoring, wandering surveillance, fall detection, walking assistance, and mobility support.

“Japan’s elderly care industry is at least 15 years ahead of China’s, but a late start does not necessarily mean slow progress. Compared to Japan’s risk-averse mindset, China has demonstrated a more proactive attitude toward new technologies and emerging changes,” said Qiu Congbo.

Having worked and launched ventures in Japan since earning his master’s degree from Huazhong University of Science and Technology in 2002, Qiu Congbo is well versed in the nuances of Japan’s elderly care market.

He pointed out that there are three core differences between the elderly care markets in China and Japan.

First, the levels of informatization differ, leading to distinct core needs for elderly care service institutions in the two countries.Years of exploration in aging have enabled Japan’s elderly care market to achieve a mature and comprehensive level of informatization. Currently, service providers in Japan are primarily focused on enhancing intelligence from the perspective of elder care to reduce reliance on manual labor and thereby lower operational costs. In contrast, China’s elderly care market began its industrial development at a later stage; to achieve rapid growth in the short term, there is an urgent demand for both informatization and intelligent solutions in elderly care services.

Second, the stages of industry development differ, leading to varying degrees of acceptance of new innovations among elderly care service institutions in the two countries.For instance, Japanese elderly care institutions prefer stable and mature products and are not particularly enthusiastic about emerging technologies. In contrast, the domestic market in China has a stronger culture of innovation, where new applications and directions driven by new technologies receive greater attention from all sectors of society and can be continuously promoted.

Third, due to cultural differences between the two countries, the core needs of their elderly populations differ.For example, Japan has a strong bathing culture. For elderly Japanese people, regardless of the eldercare model adopted, bathing is considered an essential service. Furthermore, elderly Japanese individuals place greater emphasis on protecting their personal privacy; as long as their financial situation permits, those residing in eldercare facilities tend to prefer single rooms. In contrast, elderly Chinese people may favor a more lively eldercare environment and desire constant companionship.

Driven by his profound familiarity with Japan’s elderly care market and concerns for his parents’ health, Qiu Congbo left behind the high salary and attractive benefits of NTT DATA, a Fortune 500 company, in 2015. He assembled a team of like-minded partners to put into practice the insights and experiences he had accumulated over many years in Japan’s elderly care industry—by launching a startup to do something both meaningful and enjoyable for his parents and other seniors.

In the early stages of the venture, driven by demand in Japan’s elderly care market, the team consistently focused its business efforts on major Japanese cities. Starting from R&D of elderly care services and peripheral IoT devices, and expanding to comprehensive IoT solutions, the company gradually built up substantial technical and industry resources from the ground up.

By 2019, national and local governments had actively introduced more than 70 incentive policies and measures to support the development of the smart elderly care industry, marking the official inaugural year of smart elderly care development in China.

Seizing this opportunity, the elderly care business was spun off from the original company in 2019, giving rise to Wuhan Shouhujia Intelligent Technology Co., Ltd. (hereinafter referred to as “Shouhujia”). The company aims to integrate Japan’s advanced elderly care service concepts with the current state of China’s elderly care market, establishing a comprehensive smart elderly care service platform dedicated to frontline providers. This platform seeks to make traditional, cumbersome elderly care services simpler, smarter, faster, and more compassionate.

The statement above encapsulates Apple’s core values, which closely resonate with Qiu Congbo’s mindset. Labeled by colleagues as a “tech enthusiast” and “workaholic,” Qiu has always displayed inexhaustible energy for his passions—whether building blog websites during his student years, researching new energy monitoring systems in his professional career, or currently dedicating himself to the elderly care industry. He states, “I hope to leverage the power of technology to transform our industry and make the world a better place.”

The core team of Shouhu Jia consists of long-time associates of Qiu Congbo, hailing from Fortune 500 companies such as IBM and Huawei. They possess over a decade of experience in organizational management, marketing strategy, and technological research and development. Furthermore, Shouhu Jia boasts extensive international resources, maintaining in-depth collaborations with renowned professors specializing in robotics and artificial intelligence at the University of Georgia (USA) and Tokyo Metropolitan University (Japan).

Leveraging years of extensive expertise in the Internet of Things (IoT) and artificial intelligence (AI) sectors across China and Japan, our team has conducted an in-depth analysis of the current pain points in the elderly care industry. We have independently developed a comprehensive series of smart elderly care products, integrating both hardware and software, to facilitate the efficient convergence of informatized management and intelligent caregiving in elderly care services.

When Shouhujia first entered the elderly care market, it also took some detours. After a period of trial and error, it became clear that systems are designed to support elderly care services; without understanding the characteristics of these services and the experiences of older adults, it is difficult to design practical systems and products.

“The development of smart elderly care products should be market-oriented rather than solely technology-driven. The core factors that make service institutions willing to adopt such systems are practicality, speed, and efficiency, which can simplify daily operational management, enhance the level of institutional services, and strengthen risk control capabilities. For elderly users, the core considerations are safety and comfort. Many seemingly mundane issues pose significant challenges for older adults; for instance, system interfaces must feature clear, simple designs with appropriately sized fonts and well-designed button layouts.”“Qiu Congbo analyzed.”

Currently, based on the actual market conditions, Shouhujia has identified a key breakthrough for brand development: focusing on efficiently addressing critical elderly care challenges such as the lack of nighttime supervision, real-time access to emergency information, and outdated operational management models, thereby replacing abstract elderly care concepts with practical care scenarios.Guided by market, customer, and user needs in technology R&D, Shouhu Jia provides a one-stop smart elderly care integrated service platform centered on three scenarios: smart operations, safety protection, and caregiving services., providing comprehensive smart elderly care technology and service solutions to clients in China and Japan, including those in community-based home care, institutional care, domestic service companies, and health management.

In terms of product implementation, Shouhujia has also adopted distinct strategies tailored to the differences between the Chinese and Japanese markets. “In Japan, we pursue in-depth development, emphasizing the standalone efficacy of our products, whereas in China, healthcare institutions tend to favor comprehensive, holistic solutions,” said Qiu Congbo.

In the Japanese market,In 2019, Shouhujia entered into a strategic partnership with Japan’s Life Co., Ltd., a company with 26 years of history in Japan, for joint technology research and development and business expansion. Its core technological product, the Nighttime Unmanned Autonomous Care System, was successfully deployed across all 50 elderly care facilities under Life, achieving comprehensive coverage.

“Supported by AI technology and our partners, our system has gradually begun to gain prominence in Japan’s elderly care market.” At this point, a look of gratification appeared in Qiu Congbo’s expression.

He explained, “From a system functionality perspective, we have shifted from passive to proactive care, effectively addressing the challenge of nighttime caregiving in the elderly care industry. By integrating AI-powered surveillance cameras and AI-enabled monitoring mats, along with other artificial intelligence devices, and leveraging technologies such as deep learning, image recognition, and neural network algorithms, we have established an intelligent, linked alarm system. This innovation replaces the traditional passive approach of frequent manual rounds with proactive, coordinated emergency assessment and intelligent identification and judgment, significantly reducing the time spent on nighttime inspections and room checks in elderly care facilities.”

In terms of overall competitive strength, the Shouhujia system has achieved technological and application innovations across multiple dimensions, including nighttime patrol frequency, risk of missed alerts, false alarm rate, on-site work efficiency, and fall detection capability. Meanwhile, leveraging its high cost-performance ratio, it has gradually garnered increasing industry attention and recognition.

According to the evaluation results from a professional third-party agency, taking LIFE as an example, after the implementation of the Shouhujia Nighttime Unattended Autonomous Care System, caregiver work efficiency increased by 30%, and institutional management costs decreased by 30%... "The team's vision for the detailed implementation of system features was realized step by step through continuous optimization of solutions."

In China, Shouhujia has fostered diversified development through cross-industry partnerships with entities such as Wuhan Radio and Television Station and Henan Provincial People’s Hospital. Notably, to address the varying needs of different elderly care institutions, Shouhujia offers microservice-based systems that decompose complex medical operations into granular functional modules. This enables the construction of a product matrix tailored to actual business scenarios, encompassing institutional care, community-based care, and integrated medical and elderly care models with customized module combinations.

Currently,Shouhujia has been widely applied in the elderly care sector across 45 cities domestically and internationally, covering seven major groups in China, over 20 elderly care institutions, more than 20 community- and home-based elderly care clients, as well as 50 elderly care institutions under its Japanese partners.

While gaining recognition in both domestic and international markets, Shouhujia has also received affirmation and support from industry expert departments and all sectors of society.2In 2020, Shouhujia was designated as an AI pilot unit by the National Health Commission’s Center for Healthy Aging under the Ministry of Civil Affairs. In the inaugural National Selection of Outstanding Cases for Social Applications of Artificial Intelligence in 2020, the only two elderly care institutions in Wuhan to be selected were both developed by Shouhujia.

In addition to continuously refining the market application of its products, Shouhujia has also made significant efforts in brand promotion. As a niche segment unfamiliar to the general public, how can it leverage key points to drive overall growth and achieve synchronized brand development across different regions?

From the current state of development in the elderly care industry, it is evident that regional development within China’s elderly care sector is highly unbalanced, with many cities exhibiting unique characteristics. For instance, Beijing serves as a policy hub, while Shanghai acts as a center for new models. Therefore,Shouhujia has adopted a partner model, creating exemplary B2B market cases to cultivate brand KOLs, complemented by a progressive partner promotion strategy to achieve precise marketing tailored to diverse stakeholder groups within the industry.

“The issue of elderly care does not affect only a small segment of the population, but every individual. Moreover, this topic is not distant from us; it is unfolding right now. From the outset, we have aimed to do something different by learning advanced concepts in elderly care, developing scientific and convenient products for seniors, and designing empathetic care solutions. Our ultimate vision is to share these achievements with elderly-care households worldwide,” introduced Qiu Congbo.

Next, Shouhujia will explore channel collaborations with telecom operators while expanding its market presence, enabling family members of the elderly to supervise the quality of eldercare services and truly achieve closed-loop management of eldercare services. Currently, Shouhujia is undergoing a new round of financing to drive market promotion and product iteration.