Sequoia Capital China Releases '2019 Urban Elderly Consumption Insights Report: When the Silver-Haired Drive a Sunrise Industry'

Editor’s Note: This article is republished from the WeChat official account Sequoia Hub, with authorization granted to VCBeat.

When you are old and grey and full of sleep,

Weary, I sat by the fireside and took down this book,

"Slowly reading, the look in the eyes of chasing dreams back then."

The gentle radiance and profound halos.

—William Butler Yeats

Translated by Bing Xin

This is a research report related to time.

It depicts the future that the past was destined to experience, and the past that the future is destined to unfold.

Our parents and elders, whose faces bear the marks of time, continue to use them in their pursuit of life’s highest meaning.

Although they have stepped away from the careers to which they devoted half their lives, they have never truly “moved to the sidelines” in the theater of life; rather, they are playing leading roles in the most significant trend transformations unfolding in Chinese society.

This is population aging. The nearly 250 million elderly population harbors immense consumer power waiting to be tapped. Their emotions and daily needs—clothing, food, housing, and transportation—will exert an increasingly significant impact on the entire consumer market. Their growing and diverse demands have pushed the "silver economy" to the brink of a boom.

Following last year’s release of the “Report on Pan-Entertainment Consumption Among Generation Z,” which focused on the younger generation, Sequoia China has once again publicly released an industry research report: the “2019 Insights Report on Urban Elderly Care Consumption in China.” This time, we turn our attention to the other end of the temporal spectrum—the elderly population. According to international standards, a society is considered aged when individuals aged 60 and above account for 10% of the total population, or those aged 65 and above account for 7%. By this measure, China is entering a phase of deep aging. The substantial needs of the elderly population are being activated first in large and medium-sized cities, becoming a focal point for entrepreneurs.

To this end, the Sequoia China team conducted a stratified random sampling study of the elderly population in first- to third-tier cities. The stratification ratios were based on the provincial and municipal distribution of China’s aging population. To reflect a forward-looking perspective, the age range was expanded to include individuals aged 50 and above, with over 1,000 valid samples collected for data analysis.Unlike most surveys targeting the elderly population, this report innovatively includes the children of older adults in its scope. Based on over 1,500 valid samples, it reveals how intergenerational interactions between older adults and their children influence the senior consumer market.

Furthermore, we visited multiple companies providing elderly care products and services, including Anhe Nursing Care, AgeClub, Shengnuo Yijia, Wenjing Technology, Taikang Insurance, and Jinyouwang, gaining rich industry insights.

Through integrated research via multiple channels, including big data retrieval, quantitative surveys, desk research, and focus group interviews, the Sensors Data User Behavior Insight Institute collaborated to complete this study, ultimately producing the “2019 China Urban Elderly Care Consumption Insight Report.” Just one week ago, the Central Committee of the Communist Party of China and the State Council released the “National Medium- and Long-Term Plan for Actively Responding to Population Aging,” providing strategic direction for addressing the challenges of an aging population.Against this backdrop, we aim to provide an entrepreneurial guide on identifying sunrise industry opportunities within the “silver-haired” population, from the perspective of “urban elderly consumption.”Today, in collaboration with our media partner 36Kr, we are jointly releasing this report to reveal the authentic needs of this demographic and provide entrepreneurs and industry practitioners with insights to capitalize on this emerging trend.

According to statistics, there have been three “baby booms” since the founding of the People’s Republic of China. The first two (1950–1957 and 1962–1975) saw nearly 500 million births, and these cohorts now constitute China’s middle-aged and elderly population aged 45 and above. Moreover, by international standards, China is entering a stage of deep aging; the “consumer power” represented by its nearly 250 million elderly people can even be regarded as an “economy” in its own right.

The aging population in central and eastern China has deepened rapidly over the past decade. The demand for elderly care products and services in these regions is expected to surge within the next 10–20 years, making them key areas of focus for entrepreneurs and industry practitioners.

Through the profile of the urban elderly population, we can observe the common characteristics and needs of this group:

1. They exhibit a dual nature of being “both traditional and trendy” in their daily lives and consumption habits. They generally demonstrate traditional “prudence” in financial management and spending, yet are nearly as “trendy” as younger generations in actively embracing mobile internet, with distinctly social-driven characteristics.

   
   

2. How to reduce health problems and improve the quality of life in old age is the primary concern for the elderly, and it is also an important motivation for them to purchase elderly care products and services.

   
   

   
   

3. The psychological and mental health needs of the elderly population have long been neglected, with limited high-quality supply in this market segment and insufficient attention from their children.

The elderly care industry is primarily divided into the six major sectors mentioned above, with different vertical sub-sectors catering to distinct middle-aged and elderly consumer groups. Overall, industries related to medical care and daily necessities—such as food, clothing, housing, and transportation—have a larger fundamental market base.

A lack of high-quality supply is the norm in the industry for developing products and services for the elderly.

Survey findings indicate that financial management practices among the urban elderly population have begun to exhibit diversification. Asset allocation is no longer confined to time deposits, bank wealth management products, and insurance, but is increasingly shifting toward other sectors.

In the consumption of elderly care products and services, those related to physical health and mental well-being account for the largest share. Moreover, an increasing number of older adults are beginning to prioritize planning for their later years, a trend that is particularly pronounced among the "young-old" demographic.Entrepreneurs and practitioners should focus on the elderly care market associated with these vertical sectors.

The proportion of urban elderly individuals who have gone online is already very high, with their degree of internet dependence being “even greater than that of young people.” A key characteristic of this group is that they skipped the PC internet era and entered directly into the mobile internet age.

Currently, mobile phones are not the primary means by which the elderly population accesses information. However, as time progresses, the mobile internet is poised to become the principal channel through which entrepreneurs and practitioners influence older users. The value of this “traffic depression” will become increasingly evident.

A prominent characteristic of the urban population aged 50–70 is that many are parents of China’s first generation of only children. This feature becomes increasingly pronounced as city tier levels rise.

In terms of family structure, today’s generation of children is markedly different from the previous one. Their declining tendency to live with their parents has led to a living arrangement dominated by “nuclear families.” These new changes have generated greater demand for elderly care provided by adult children.

Children, in general, do not provide sufficient care for their parents. Particularly, those who have established their own families tend to devote more energy to raising the next generation. However, among middle-aged children born in the 1960s, growing life experience and advancing age have led to an increased level of attentiveness and care toward their parents.

Overall, children, particularly urban offspring from one-child families, generally feel immense pressure in caring for their elderly parents.Enterprises that provide convenient, affordable, and high-quality elderly care products and services will find it easier to penetrate the market among adult children.

Although children are the primary consumers purchasing elderly care products to fulfill their filial duty, research reveals that they struggle to fully understand the genuine needs of the elderly population. They tend to overemphasize tangible elderly care products while neglecting those addressing psychological and emotional well-being, a disparity that often leads to communication breakdowns or even conflicts between parents and their children.

For entrepreneurs and practitioners, bridging the cognitive gap between children and their parents, and ensuring mutual satisfaction in product and service delivery as well as brand building, may represent a critical direction for establishing industry barriers.

Survey results indicate that older adults prioritize quality, functionality, and safety when making purchases, while “brand” is mentioned far less frequently as an important factor. This suggests that older consumers generally have weak brand awareness and are more inclined to trust recommendations from friends, acquaintances, and their children.

Urban children consider significantly more factors than their parents when selecting elderly care products and services, demonstrating a strong preference for “brands” and forming consumption habits characterized by cross-verification through multiple channels. Therefore, for providers of elderly care products and services, brand building can more effectively reach the children demographic and drive conversion.

In the consumer market for elderly care products and services, there is a pronounced “separation between the demander and the purchaser”: adult children are the buyers of these related products and services, yet they themselves do not have the corresponding needs nor will they use them. For entrepreneurs and practitioners, accurately segmenting targets and needs should be the first step in market expansion and product positioning.

Technology-driven products in the elderly care industry, particularly those related to healthcare, are still in the early stages of commercial application. Their commercial prospects are highly promising for improving the quality of life for older adults and alleviating the burden on their children.

However, as updates to relevant policies and infrastructure may not keep pace in a timely manner, it is recommended that business-to-business (B2B) enterprise services remain the primary focus at this stage, penetrating end-user markets through collaborations with institutions such as hospitals, nursing centers, and elderly care facilities.

Most technology-enabled elderly care products and services involve the collection and utilization of basic data; therefore, enterprises should prioritize data protection from the outset.