China Matters: July 2022
July 29, 2022
Could China’s “silver generation” become a gold mine?
According to the National Bureau of Statistics, China’s aging population is predicted to reach 330 million by 2030, making the “silver generation” its fastest-growing demographic. Compared to Gen Z and millennials, Chinese elderly also have higher discretionary spending and more free time. E-commerce platforms are latching on: Alibaba launched “Taobao for Elders” featuring simplified functions, and JD.com debuted a series of initiatives to encourage digital confidence – including app training for digital payments, booking appointments, and medical consultations. Yet the market appears to be largely untapped, despite Chinese seniors showing interest in health supplements, cosmetics, and jewelry. Brands need to see the market for what they are: consumers with plenty of buying power, and who aren’t hesitant to embrace new technology.
Space tourism arrives on the mainland
China has seen notable space achievements in the last few years, and soon, mainland tourists could be opting for destinations well beyond their old favorites Thailand, Japan, and the US. CAS Space recently signed an agreement with a state-owned travel giant, indicating the arrival of space tourism. Space enthusiasts can now also look into a number of domestic aerospace destinations including Wenchang and Xichang. The emerging sector is bound to find a warm welcome, with nearly 95 percent of surveyed tourists expressing interest in space-themed tourism.
Can luxury continue to attract consumers in Tier 2 and Tier 3 cities?
While China is still predicted to become the world’s biggest luxury goods market in the long term, following Shanghai’s two-month Covid lockdown, retail sales declined 6.7 percent. Oliver Wyman says luxury brands have slashed expectations, with forecasted growth for luxury consumption seeing a sharp decline.
Brands are turning to e-commerce platforms to reach consumers in smaller cities. The Chinese government’s announcement of “common prosperity” goals, which focus on narrowing the wealth gap, has triggered luxury demand from an ascendant middle class. The future of luxury brands might just find a boost in China’s Tier 2 and Tier 3 cities, where residents boast higher disposable incomes given lower costs of living.
Local districts to be transformed into live streaming e-commerce hubs
In a bid to accelerate China’s digital economy, Beijing will build up to three bases for live streaming e-commerce by 2025, turning local districts into incubators for professional live streamers. Reports say 309 million Chinese users viewed e-commerce live streams and the market is expected to grow into a $223.98 billion industry by 2028. With the launch of e-commerce hubs, market entrants can expect increased support, while foreign brands can learn to effectively localize services and communicate with Chinese consumers.