For decades, Nestle SA has tried to get its infant milk powder into the hands of China’s new mothers with promises of brighter, healthier babies. Now it is trying to do the same for elderly people.
Last month, the company launched Nestle Yiyang Fuel for Brain senior milk powder, a formula designed to help China’s seniors “refuel their brains and start a new smart life.”
The announcement did not get quite the hype that products targeted to China’s millennials do.
However, it might yet prove more consequential. With 222 million people over age 60, China is home to the world’s largest population of seniors and their economic clout is set to surge in the years ahead.
By one estimate, the value of products and services geared toward them might reach 33 percent of China’s GDP by 2050.
If that trend holds, caring for seniors will be China’s dominant industry by the middle of the century and old folks will be its defining demographic. That presents plenty of challenges for the Chinese government — but also some major opportunities for business.
Seniors are already playing a key role in shifting China’s economy away from exports and toward consumption.
Fan Min, president of Ctrip.com International Ltd, China’s biggest online travel site, predicted they will be the primary drivers of the country’s tourism market within a decade.
About 5 million of them are traveling overseas annually, with that number expected to more than double by 2030. As they venture out, the travel industry is adjusting to their demands — by offering more group tours and cheaper accommodations, for example.
It is not just tourism: Businesses ranging from car companies to online marketplaces have built features marketed to elderly Chinese.
Healthcare is another industry that might be transformed. Unlike Japan and Western Europe, China is aging before it has grown rich enough to develop the institutions — such as nursing homes — needed to sustain a large senior population.
Increasingly, the private sector is stepping in. For those who cannot afford to travel overseas, private preventative care is becoming much more common.
Elsewhere, companies are developing “smart” care products, in which Internet-connected devices track the health of customers. Beijing is expanding a program that uses a discount shopping card to monitor seniors while applying data analytics to anticipate their needs.
Nestle clearly understands these trends.
At the launch of its new senior milk powder, a company official told the press: “As an old Chinese saying goes: ‘Diet cures more than the doctors.’”
Long-term, that attitude — combined with investments in health-focused artificial intelligence and big data by companies such as Alibaba Group Holding Ltd and Baidu Inc — might well reshape the healthcare industry, both in China and globally.
However, the area where China will have the biggest influence on the market for senior services will likely be housing.
As of 2015, China had an average of only 26 nursing beds for every 1,000 seniors. Over the coming decades, it is unlikely that the Chinese government will be able to build — much less staff — nearly enough facilities to meet the demands of its growing elderly population.
As a result, it will need to develop new and more creative models for senior care.
That might mean more automation — there is at least one robotics pilot program in Hangzhou. It could mean home care that is supported by a network of Internet-dispatched delivery services, especially for food, and it will surely mean an expansion of “smart” monitors and technology to interpret the data they collect.
Given the size of the potential market, there is reason for optimism that the China’s entrepreneurs can figure out low-cost models that work at home — and quite possibly overseas.
For China’s current generation of seniors, having come of age at a time of global isolation and domestic hardship, that is a level of influence few could have imagined in their youth.
Adam Minter is a Bloomberg View columnist. He is the author of Junkyard Planet: Travels in the Billion-Dollar Trash Trade.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. |
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