China's silver market drawing nationwide attention is a large-scale market expected to create continued active demands.
Growing silver market
China is standing at the threshold of an aging society.
According to the outline of 12th Five Year Plan for National Economy and Social Development, the number of over-60 adults will reach 221 million, accounting for 19% of the total population in 2015, and is estimated to reach a peak of 430 million, accounting for 35% of the total around 2050 (See Fig.1). Now, this silver market is showing momentum for rapid growth. The Center for Health Aging and Development Studies at Peking University estimates in its research report that 14.64% of a 21.7 trillion yuan total consumption for the year 2020 will come from the elderly population, and in 2050, the figure will reach 28.97 % of a 67.9 trillion yuan total consumption for the nation. In terms of the elderly population structure, people in the range from 60 to 74 years old will account for 76% of the over-60 population, representing major purchasing power that will play a leading part in the silver market (See Fig. 2).
More convenient services for the elderly that cater to their children’s generation
Those who are facing elderly care issues today are the children of the aged.
Three decades have passed after the one-child policy came into force in the 1970s. The first generation of law-enforced parents has come of silver age. As law-enforced only-children come of age and become parents themselves after getting married to only-children partners, a family in China today is typically comprised of four grandparents, two parents and one child who belongs to the third generation of the one-child policy. This is what has been referred to as “4-2-1 family”.
Two only-children parents of the first generation are busy with work and at the same time have to provide elderly care for their four parents and rear at least one child. These only-children parents seek more convenient services for the elderly or solutions that enable them to be filial to their parents as well as enjoy life.
Smartization of commodities and services for the elderly accelerates
China has many second generation parents who have to provide nursing for their elderly parents. Today, the country sees increasing needs in the silver market, which is shifting from traditional ways of caring for the elderly to ways that actively utilize high-tech. This change has brought about the trend of “smart elder care”*1. Current needs for “smart elder care” facilities or smart communities livable for elderly people are high, and consequent economic effects are very positive. These needs will add weight as population aging progresses. As a part of our survey on China’s silver industry, we interviewed Mr. Zhang Hua Zheng (張華正; Zhāng Huázhèng) the marketing director for Beijing Suncity Group*2, who spoke about the market profile of the smart community livable for elderly people.
Q: Would you tell us something about key factors that will allow China’s current silver industry to grow further?
Zhang：Now, we are seeing apparent needs emerging from China’s aging society. The trend is that it is destined for development of the service sector targeting elderly people in China to be deeply linked with IT. I think the industry, headed to smartization, will keep developing in the future. If we integrate three major functions, specifically, communication, management service, and residential environment automation, realize system integration, pursue integration and computerization, and increase added value of the service as the industry develops, I am sure that elder care services will enjoy sounder, sustainable development.
Q：Would you be so kind as to talk about what flagship products you have been offering to the market to meet the development needs pf “smart elder care”?
Zhang：To response to the trend of “smart elder care”, we investigated the needs and developed “Angel Watch”. Today, parents understand that for people in this generation being taken care by a young couple overloads the generation of their children; therefore, they tend not to talk about health problems to their younger adult children. The children, conversely, want to be filial to the parents and know about the parents’ health. Our “Angel Watch” offers a solution to address such situations. The watch is equipped with more than a dozen functions such as a health monitor, accurate positioning system, action recorder, and micro transceiver. Data recorded in the watch can be transferred to hospitals to be analyzed and processed. Using a downloadable mobile application enables the children to keep tabs on their parents’ health as needed and take real-time action when necessary. I am happy to tell you that these functions have received positive recognition.
Q： In what areas would you think smartization of the silver market will be made into tangible forms?
Zhang：It may be actualized in, for instance, smart health control, smart individual communication, and smart life services. In the near future, an aged parent will cook a meal in a kitchen with a sensor that triggers an alarm if it receives no reply for a given length of time. At the same time, it will automatically activate an emergency program to turn off the gas. If an elderly person falls or something abnormal occurs in the house, that information is shared with a clinic or hospital that immediately sends out a doctor to rush to the scene. A smart bath system that automatically selects the optimal program depending on the person who is taking a bath. For example, it would control the water temperature and tell you whether you should be seated or lie face up in the bath capsule. A smart toilet that automatically performs urine tests, records blood pressures or blood sugar levels, and distributes the data to a community’s health service center or hospital. All these will be a future trend.
Q：What types of businesses will the smart community silver market benefit?
Zhang：The fundamental structure of a smart community livable for the elderly is comprised of control, security, communication, and cloud computing. Let me give an example here. Our “Waterfront Residence (水岸香舎; Shuǐànxiāngshè)”, a high-end smart silver condominium being operated in affilation with Suncity has a typical “Internet of Things (物聯網; wùliánwǎng)” smart monitoring system and is a relatively high-end, well-furnished, smart complex that features mobility, health care, home service, entertainment, and communication, all of which are provided to make the series of scenarios in the daily life of the elderly more comfortable and pleasant. Building a smart application system like this has spurred expansion for middleware suppliers and IT businesses in particular and has led to increasing needs for both software and hardware (See Figs. 3 and 4).
Barrier free bathroom products
Smart urine-testing, self-cleaning toilet seat
Automatic bath capsule
Elderly medical service going high-tech brings business opportunity
Whether it is designing a useful service product for the elderly or building a smart community, the most basic area is medical services focused on health of the elderly. As accelerating aging increases the needs, it has already been widely recognized that medical service will become a major battleground for China’s next-generation information technology. We have been watching very robust demands for IC chips at each stage of areas like life science, computer, and telecommunication. The next five years will see implementation of remote diagnosis and chips used for health insurance systems boost the market growth. In addition, the biggest business opportunity exists in the area of applications that enable consumers to check their health on their own. For application software developers, system solution providers, chip and module manufacturers, medical equipment manufacturers, and network suppliers, the smartization of medical technologies presents a hugely potential “gold mine” that will bring about expected growth and benefits to these manufacturers.
Contributions to China’s silver market increase the potency to improve corporate profitability.
The service level of China’s silver market is still low. Various issues such as shortage or aging of facilities, shortage of nursing caretakers and assistants, lagging service methods and know-how, and deteriorating service quality are bubbling up to the surface. For those industries involved, imperative tasks include analyzing facts and trends in China’s aging society, grabbing a chance based on the analysis, and carrying out sufficient preparation. From a strategic standpoint, dealing proactively with the burgeoning smartization in China’s huge silver market will not only improve short-term profits but also give a competitive edge for local firms that know local needs and culture inside out or foreign companies that have notable technological advantages over domestic ones.
*1 “Smart elder care”: In Chinese, referred to as “智能養老, zhìnéng yǎnglǎo”, meaning smartization of services for the elderly.
*2 Beijing Suncity Goup: China’s first firm operating elderly healthcare businesses, established in 1988. Provides standardized, consistent level of care and service for elderly people. Its subsidiary companies include: Suncity Real-Estate Development Corp., Suncity Hospital, shopping centers, Real-Estate Management Corp., Suncity Silver Condominium, Archirtect Interior Corp., Suncity Leisure Village Corp., and Silver Healthcare Service Corp.
Employees: 700; Total investment: 600 million yuan (approx. 9.6 billion yen)
Moves That Are Driving What Comes Next
Grasping the true picture of moves in China's market and business oppotunities that are expected to burgeon out from the moves. We take a look at the social challenges and changing consumption trends for China's dramatically developing economy.