For decades, Nestle SA has tried to get its infant milk powder into the hands of China’s new mothers with promises of brighter, healthier babies. Now it is trying to do the same for elderly people.
Last month, the company launched Nestle Yiyang Fuel for Brain senior milk powder, a formula designed to help China’s seniors “refuel their brains and start a new smart life.”
The announcement did not get quite the hype that products targeted to China’s millennials do.
Photo: EPA
However, it might yet prove more consequential. With 222 million people over age 60, China is home to the world’s largest population of seniors and their economic clout is set to surge in the years ahead.
By one estimate, the value of products and services geared toward them might reach 33 percent of China’s GDP by 2050.
If that trend holds, caring for seniors will be China’s dominant industry by the middle of the century and old folks will be its defining demographic. That presents plenty of challenges for the Chinese government — but also some major opportunities for business.
Seniors are already playing a key role in shifting China’s economy away from exports and toward consumption.
Fan Min (范敏), president of Ctrip.com International Ltd (攜程網), China’s biggest online travel site, predicted they will be the primary drivers of the country’s tourism market within a decade.
About 5 million of them are traveling overseas annually, with that number expected to more than double by 2030. As they venture out, the travel industry is adjusting to their demands — by offering more group tours and cheaper accommodations, for example.
It is not just tourism: Businesses ranging from car companies to online marketplaces have built features marketed to elderly Chinese.
Healthcare is another industry that might be transformed. Unlike Japan and Western Europe, China is aging before it has grown rich enough to develop the institutions — such as nursing homes — needed to sustain a large senior population.
Increasingly, the private sector is stepping in. For those who cannot afford to travel overseas, private preventative care is becoming much more common.
Elsewhere, companies are developing “smart” care products, in which Internet-connected devices track the health of customers. Beijing is expanding a program that uses a discount shopping card to monitor seniors while applying data analytics to anticipate their needs.
Nestle clearly understands these trends.
At the launch of its new senior milk powder, a company official told the press: “As an old Chinese saying goes: ‘Diet cures more than the doctors.’”
Long-term, that attitude — combined with investments in health-focused artificial intelligence and big data by companies such as Alibaba Group Holding Ltd (阿里巴巴) and Baidu Inc (百度) — might well reshape the healthcare industry, both in China and globally.
However, the area where China will have the biggest influence on the market for senior services will likely be housing.
As of 2015, China had an average of only 26 nursing beds for every 1,000 seniors. Over the coming decades, it is unlikely that the Chinese government will be able to build — much less staff — nearly enough facilities to meet the demands of its growing elderly population.
As a result, it will need to develop new and more creative models for senior care.
That might mean more automation — there is at least one robotics pilot program in Hangzhou. It could mean home care that is supported by a network of Internet-dispatched delivery services, especially for food, and it will surely mean an expansion of “smart” monitors and technology to interpret the data they collect.
Given the size of the potential market, there is reason for optimism that the China’s entrepreneurs can figure out low-cost models that work at home — and quite possibly overseas.
For China’s current generation of seniors, having come of age at a time of global isolation and domestic hardship, that is a level of influence few could have imagined in their youth.
Adam Minter is a Bloomberg View columnist. He is the author of Junkyard Planet: Travels in the Billion-Dollar Trash Trade.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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