Within the next several years, China’s "gray" (50-plus) market will be the most potent spending demographic on the planet. By 2025, there will be more than 500 million "mature" Chinese consumers – accounting for 36% of the country’s population – up from 300 million today. Their per capita spending power will exceed US$4,100, up from US$1,620 in 2006.
To date, this potential bonanza has been ignored by most marketers. According to the National Seniors Bureau, only 10% of products and services bought by senior citizens are actually targeted at them. Why? First, their current incomes pale in comparison to younger, middle class cohorts, who mostly reside in eastern coastal cities. Second, mature consumers are assumed, often erroneously, to be ultra-conservative, caring little about brands and the aspirations they embody.
Mainland gray can be golden. Marketers, however, must realize that, as incomes rise, China will become more modern and international, but not more Western. Goods should be positioned in accordance with cultural imperatives. Brands must resolve a fundamental and uniquely Chinese conflict at the heart of elderly existence – between fear of an ever-changing modern world and titillation by new-found freedoms and broadened horizons.
Displacement vs. optimism
On one hand, the 50-plus generation suffers from a sense of displacement. From civil war, World War II and liberation to the Great Leap Forward and the Cultural Revolution, they matured during a politically and economically insecure era in which success or acknowledgement was contingent on sacrifice, on both familial and national levels. They were conditioned to have faith that absolute loyalty to authority – by son to father, younger to older, ruled to ruler – would pull "new" China out of 150 years of imperial and Republican chaos.
Their worldview is characterized by Confucian faith that age is tantamount to wisdom, that obedience by and respect from the younger generation are the fruit of their long, hard struggle through 60 years of nation building.
The forces unleashed by economic reform – mandatory retirement; mobility that increases the physical distance between parents and adult children; an epic inter-generational values gap in which traditional collectivism co-exists uncomfortably with new-fangled ego affirmation – therefore represent a threat of sorts. The 50-plus cohort, anxious and self-protective, questions its own relevance.
That said, hope springs eternal. Driven by rising incomes, new technologies and a China connected with the outside world, sunset years can be rewarding. The mature market is beguiled by the promise of new friends, burgeoning fitness and travel options, online self-expression and the idea that fun need not be guilty pleasure.
Brands must mitigate an anxiety of displacement by becoming guiding lights into a new world of opportunity. This goes beyond a self-evident need to enhance product accessibility – enlarged mobile phone key pads, anti-shake digital cameras, and so on. Smart marketers must pivot from fear-based messaging by either unleashing "possibilities of me" or forging new constructs of "we."
Possibilities of ‘me’
Justify the treat: By positioning old-fashioned values as the source of future happiness, or self-indulgence as a reward for enduring deprivation, brands encourage consumption of a forbidden fruit. Older Chinese are ruthless savers, so AIA skillfully suggests that, after years of hardship, freedom from worry is a worthy financial goal. Burberry’s (BRBY.LSE) "real quality never goes out of fashion" and Dove’s celebration of "real beauty" can be focused into mature-targeted campaign platforms.
Make olden golden: Brands must explicitly acknowledge 50-plus wisdom. Shide wine elegantly links the clarity of white alcohol with the "acumen of ancient sages." In a one droll HSBC (HSBA.LSE, 0005.HK, HBC.NYSE) ad, a silver-haired father wields a credit card to restore family harmony while paying for an expensive meal. Even Nike (NKE.NYSE), in the build up to the 2008 Olympics, ran a TV spot featuring a guru personifying an ageless Just Do It spirit. In airing senior-relevant copy, these brands suggest an unusual, if sub-optimally harnessed, insight into the minds of mature Chinese individuals.
Attain "forever young": Brands promoting health benefits should move beyond worry-based protection – such as supplementing calcium deficiency to ward against weak bones – to embrace life-enhancing liberation. Furthermore, pounding clichés of lively grandmas and grandpas have passed their sell-by date, as assaulted viewers of relentless Nao Bai Jing commercials will attest. New Balance targets running shoes to elderly who crave "new roads and a new life." Vitality benefits can also be dramatized by beating the whipper-snappers – using the young generation as a playful foil. In Japan, Pocari Sweat, a sports drink, fueled the victory of spry old men over SMAP, a local boy band.
Reinforcement of ‘we’
Tighten family bonding: To strengthen the 50-plus market’s sense of belonging, brands can bridge the gap between new and traditional ways of life by facilitating inter-generational communication. Historically, non-differentiated "gifting" has been the most prevalent means of encouraging offspring to fulfill Confucian obligation to parents. Recently, however, a few products have begun to address the widening generation gap with a bit more nuance. Ericsson (ERIC B.OMX, ERIC.NASDAQ) reminds sons that real caring is conveyed through on-going dialogue with fathers. China Mobile (0941.HK, CHL.NYSE) has taken this a step further, opening "lines of love" between daughters and mothers.
Furthermore, in Chinese culture the extended clan supersedes the nuclear family, and so every Little Emperor has six parents, not two. Savvy brands acknowledge grandparents’ interest in their grandchildren’s well being. Both joy and responsibilities should be shared. Nestle’s (NESN.SIX) Taitaile, a flavor enhancer, explicitly endorses a mother-in-law’s dominion over the kitchen and, hence, the entire family’s nutritional well-being.
Build new communities: In an era of sweeping change, brands should be platforms for social bonding. Which property tycoon will be the first to build a luxury village for seniors? When will DeBeers throw diamond anniversary parties? Digital technology already facilitates the fortification of old and new acquaintances – social networking sites for the elderly are starting up everywhere – yet few marketers have capitalized on this sociological paradigm shift. Who will be the first to sponsor online "silver dating?"
"China pride" can also be a vehicle for drawing together like-minded veterans. Brands should give patriotic seniors a new-age megaphone to help them, together, cheer for China. Mass market sports brands like Anta Sports (2020.HK) or Li Ning (2331.HK) could even support a "Revolutionary Pep Squad" at the next Olympic Games.
China’s mature market will be gigantic, but it is being ignored by most marketers. As its spending power mushrooms, those that wake up to its potential – tapping into the tension between a fear of displacement and an excitement for new beginnings – will be rewarded with deep loyalty and robust price premiums.