How to Engage China’s 249 Million Silver Spenders

7 minute read

By Michael Paradiso, Hot Pot Client Director

When business leaders think about the opportunity in China, most will likely picture Gen Z or Millennial consumers in Tier 1 cities, such as Beijing and Shanghai. Brands invest heavily to win this affluent, brand-conscious segment.

Another significant, yet often overlooked consumer segment is China’s seniors, or silver spenders. There are more than 249 million seniors in China, representing 17.9% of the population. The proportion of the elderly population is expected to rise to 34.9% by 2050.

Collectively, China’s silver spenders account for US$700B in consumer spending, with more than US$2.4T in savings. China’s seniors represent the world’s largest silver market.

Silver spenders were born before 1960. Now 60 years and older, they have lived through Mao Zedong era of the 1960s and early 1970s, the economic reforms and opening of the economy under Deng Xiaoping in the 1980s, and the steady rise of incomes over the past 30 years.

These economic shifts have also caused cultural changes, particularly for the family. This has led to evolving attitudes for seniors around self-sufficiency, connectivity, purpose and outlook. 

Seniors feel the need to connect with technology because they want to remain relevant and in touch with their families. 12.5% of China’s 829 million online users are 50+ years old, growing at 10.4% year on year. Tmall has more than 7.5M Silver Spenders registered.

That said, only 8% of seniors feel that marketing and advertising addresses them in a relevant way. 

Most of the senior population in China hold the traditional opinion that it is important not to spend frivolously. They are more careful about their purchase decisions. Therefore, marketing to China’s seniors is different from marketing to a younger Chinese consumer.

Here is a look at how seniors’ attitudes and use of technology are redefining industries, and how global brands can more effectively connect with silver spenders.

 

Identify and Deliver Tangible Value

Silver spenders are inherently frugal but that doesn’t mean they won’t part with their money. For seniors, a ‘brand’ is more commonly associated with ‘product quality’ or ‘style’, rather than heritage, craftsmanship, or aspirational qualities. If a product delivers tangible value for them, then they are willing to spend.

When planning trips, seniors seek out tours that are built for their demographic, focusing on schedules that balance activity with rest, with the right transfers to avoid feeling overly tired.

In fashion, clothing and footwear needs to be stylish, so the designs don’t feel old. At the same time, the garment must have the right functional qualities. For example, shoes must be light with a soft, non-slip sole and be easy to put on.

With a retirement age of 60 for men and 55 for women, Chinese pensioners are among the youngest in the world. They are taking up more hobbies to occupy their time, such as modern languages, calligraphy, and photography. They are investing in their hobbies too. Camera stores in Shanghai report that 40% of their customers are 60 years and above.

Brands will win silver spenders when they correctly identify seniors’ needs and develop products and services that deliver value.

 

Messaging Should Not Feel ‘Old’

Seniors do not appreciate being reminded that they are older. Marketers should avoid marginalising silver spenders by only speaking to age-specific product benefits. Instead, focus on empowering the consumer. For example, a clothing line targeted at the senior market should emphasize that it is a “stylish brand with exceptional comfort for the mass market” instead of being “senior-specific with extra elastic.”

Marketing materials should feature middle-aged models, as they project a younger image and create an appropriate impression. Alternatively, some companies have effectively used senior models that don’t adhere to age-specific stereotypes, such as Volkswagen and Reebok.

 

 

In both instances, silver spenders understand that the products are relevant for them, but the messaging is uplifting and positive, rather than focusing on why they need specially designed products because they are older.

 

Target Seniors Through Relevant Channels

An important step in campaign planning is channel selection, to ensure that the carefully crafted message is delivered to the target audience. 

WeChat is the most popular social media app for active Chinese seniors. They spend on average 1 hour 37 minutes on WeChat daily, discussing their daily lives and hobbies with friends. For comparison, this is just 49 minutes less per day than younger Chinese consumers spend on the app.

While WeChat is commonly used among China’s seniors, other popular platforms like Weibo and Xiaohongshu are not. Marketers must tap into different platforms and communities to effectively share their message with the intended target audience.

Square dancing is one activity that is extremely popular among China’s seniors. More than 200m seniors have tried it and 100m participate regularly in square dancing. This wellness and leisure activity has grown into a US$15B market from the sales of shoes, costumes, and boom boxes. 

Marketers are using this community as a way to connect with silver spenders both online and offline. Banks and healthcare companies regularly sponsor square dancing activities to promote their products. Digitally, the go-to app for senior square dancers is Tangdou, which boasts 400,000 monthly users and 4,000 monthly events. On average, users are spending 33 minutes per day on the app, which gives advertisers an ideal channel to reach seniors.

For booking travel and trips, older Chinese are still more likely to work with travel agents and book their holidays in groups. That said, there is rapid growth in purchasing travel online. 50% of Silver Spenders are already using an app to book some form of travel or tours. Online travel platform Tuniu reported that travel had increased 88% from people older than 55 and that the age group already accounts for 18% of total bookings.

 

Create Communities for Seniors

As the family dynamic evolves in China, seniors are increasingly finding themselves with more time and more disposable income. Health and wellness are more relevant and they are spending more money to build connections with like-minded people who share their values and interests.

China has seen a boom in older education schools. Offering a variety of classes, including degree programs, there are more than 70,000 facilities around the country with an intake of 8 million seniors annually. The government has plans to ensure that there is at least one such facility in every city by the end of 2020.

Some companies are providing products and services that better connect generations within the family. HiNounou provides seniors and their families with a one-stop, comprehensive home wellness solution. The ecosystem tracks, analyzes, and reports their health data in real time, providing seniors with personalised wellness regimes and families with peace of mind. Larger insurance companies, such as AXA, PingAn and Angelcare, have also partnered with HiNounou to better engage the senior community.

One larger investment for more affluent seniors is in property, specifically at upscale continuing care retirement communities. These communities are viewed as a more desirable alternative to nursing homes or ageing alone at home. They offer a range of lifestyle services and greater community. Some of these communities are built by insurance companies who convert insurance policy earnings into retirement home leases for older clients.

 

In Conclusion…

China’s 249 million silver spenders are a growing, increasingly affluent, and largely underserved consumer segment. While they are more careful about their purchase decisions, they collectively spend US$700B annually.

To more effectively engage this audience, marketers should:

  • Deliver tangible value by developing products and services that consider seniors’ needs
  • Share messages that empower silver spenders, instead of reminding them that their needs are different as they grow older
  • Build partnerships with the right channels to ensure the messages are delivered in the right place to the audience
  • Create communities with like-minded people who share their values and interests.

At Hot Pot China we partner with forward-thinking brands on their China activity. We guide our clients in maximising ROI from their short, medium and long-term marketing activity in China.

Contact Hot Pot China to discuss how our team of China specialists can help realise greater value in your brand, digital and eCommerce initiatives.