Senior Citizens Offer Rich Potential for Advertisers

The Mao Generation Is Giving Way to the Me Generation, Says Ogilvy & Mather Study on Elderly in China

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SHANGHAI (AdAgeChina.com) -- China is old. Not just historically, but also demographically.

The country has 143 million senior citizens. If they lived in one place, it would be the world's ninth most populous nation, and bigger than the entire population of Russia. The number of senior citizens in China is forecast to grow by 3% every year, doubling by 2025.

But senior citizens in China don't get a lot of attention from marketers. Raised during an era of socialism marked by widespread poverty, they haven't benefited financially from China's fast- growing economy as much as their children and grandchildren have.

As a result, they have been largely left out of mainstream marketing and communications efforts, even as they attempt to adapt to change and embrace modernity and shed beliefs that they'd had been indoctrinated with in their youth.

That's a mistake, according to Ogilvy & Mather's new study "Embracing Change, Realizing Dreams," because the Mao generation is giving way to a me generation that isn't as poor as you might think.
Senior citizens like this Shantou native present untapped opportunities for marketers
Senior citizens like this Shantou native present untapped opportunities for marketers Credit: Normandy Madden
Per capita spending power of senior citizens is expected to grow from $1,620 in 2005 to $4,112 in 2015. By 2050, that figure could reach $731.5 billion. Their biggest expenditure is on food, followed by daily care, utilities, telecommunications, medical needs, nutritional supplements, apparel and transportation.

Elderly consumers will account for a bigger chunk of China's economy in the future, especially for marketers in sectors such as health care and insurance, travel and leisure, financial services, technology, food and beverage and retail.

"Seniors are an often overlooked demographic that is vital to the future success of many of our clients' businesses in China," said Beijing-based Shenan Chuang, CEO-China of Ogilvy Group, which interviewed 1,100 men and women between the ages of 60 and 75 across China. All had at least a middle school education, and included high, middle and low income groups. Ogilvy also filmed two-day interviews with 12 seniors in Beijing, Chengdu and Foshan.

Migration has broken generational links
Pre-modern or traditional Chinese society placed elderly people on a pedestal. They were valued for their accumulated knowledge, their position within the extended family, and the sense of history and identity which they helped the family to develop. Respect for elderly people was an integral part of Confucian doctrine, especially for the family patriarch.

"It was once part of the filial duties imposed by Confucianism to care for one's parents when they were old, so that when you too were old your children would in turn care for you," said Kunal Sinha, Ogilvy's executive director-discovery for Greater China based in Shanghai.
Kunal Sinha
Kunal Sinha
Chinese society has changed tremendously in the past two decades, however. That old order and sense of duty is breaking down. The migration to cities of younger people leaves the elderly as a residual population in smaller towns and villages, breaking the traditional links between generations.

In 2006, China's Politburo passed the 11th Five Year Plan, which included provisions to care for the country's aging population. The plan promised to establish 10,000 senior citizens' universities and schools, add 800,000 nursing home beds, and open parks, museums, and libraries that would provide free or discounted services to senior citizens.

In addition, private and foreign capital was iencouraged to invest in products and services for senior citizens, in areas like medicine, finance, entertainment, tourism and legal services.

That opportunity is being wholeheartedly embraced by China's seniors. A morning visit to a park in any Chinese city will reveal a fleet of energetic elders playing ping pong, flying kites and crocheting mobile phone holders, while others sing or play traditional instruments like the erhu. Theirs is not a gray world.

For families that have retained traditional structures, meanwhile, seniors in China tend to have more influence over household purchases than the elderly in many other countries. A majority of seniors (51%) live with their children, and this number increasedsto 61% in smaller towns like Foshan.

The older generation plays a large role in the family's daily routine, particularly in caring for grandchildren with two working parents. While many societies complain of a generation gap, there's a bridge being built between generations in China.

But this change is as confusing for the older Chinese as it is for the child. The transition from being a doting grandparent to the main caregiver is challenging and can create problems when parents try to discipline their children on a part-time basis.

Most seniors have positive outlook
Overall, associations with old age and retirement are positive. Although the legal retirement age in China is 60 for men and 55 for most women, many employees of state-owned enterprises have been allowed to retire in their late 40s or early 50s to make openings for new graduates and others. That leaves a lot of active years left in a country where life expectancy is 71.8 years.

In a study by the insurance company AXA, 66% of retired people surveyed had a positive outlook. They said they liked having more free time for themselves, traveling, participating in sports and other leisure activities, and having time for others, including caring for grandchildren.

Those who were working had an even more positive outlook; 76% said they believed life in retirement would be good. Less than one-third of retired people said they feel pessimistic, citing poor health, financial difficulties and loneliness.
Senior citizens create drum troupe in Shanghai
Senior citizens create drum troupe in Shanghai Credit: Ogilvy & Mather
Forty percent of the seniors in Ogilvy's study were empty-nesters, mostly living with their spouse or sometimes alone (8%), although many lived near a child.

Of the seniors surveyed, 91% said they believed that living together, or regular visits, were a way the young supported their parents. Seventy-three percent considered material means (other than financial) as a way of support, while 63% had financial expectations of support. In smaller towns such as Foshan, grandparents feel more obligated to help with childcare, because they are more dependent on their children for old age support.

"The key here is interdependence, and both sides making physical and emotional adjustments. Seniors describe the younger generation as one that is more open-minded, independent, westernized, fashionable and impulsive, and they accept the change," Mr. Sinha said.

Impact of western culture mostly appreciated
Overall, 57% of respondents said they feel western culture has had a positive impact, allowing China and its residents to internationalize, learn from advanced technology, and enjoy a higher standard of living. The 43% who felt the impact was negative cited society becoming "too open," and the young forgetting Chinese traditions.

The "worship of all things foreign" does worry them. In the past decade, living together before marriage has become more common.

"They do draw the line, however. Having a baby before getting married still remains a taboo," Mr. Sinha said. One respondent commented: "Young people frequenting karaoke bars, girls wearing miniskirts and sex before marriage all represent a certain stage of social development, and this is unstoppable."

Many embrace modern China's advances, such as technology that lets them keep up with family and friends. Respondents said they stay in touch with relatives through e-mail (68%) and 53% e-mail their children.

They also like modern supermarkets for their clean, hygienic environment, diverse choices and reliability, particularly in Shanghai and Beijing. In less affluent cities, seniors were more ikely to shop at wet markets, believing that food and groceries are fresher and cheaper there.

And a significant minority--26% of respondents said they were open to the idea of living in a retirement home, although few do now, said Mr. Sinha. He cited this surprisingly high statistic as evidence that "old people in China have changed faster than our beliefs about them."

He added: "Brands, corporations, government agencies can either choose to treat aging as a problem, or they can view the optimism and adaptation capacity of this generation as an opportunity."


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