New | Navigating through China’s grey economy
Senior consultant suggests tapping China’s grey economy by starting in the consumer section
China’s ageing population poses great opportunities for companies focused on elder care and financial services, but the consumer sector is better positioned to tap the market compared to the service sector, a senior consultant suggested.
“We have many clients asking about whether there are opportunities in the greying China. Some have interpreted this trend as spelling doom and gloom for China. However, we believe it could represent an opportunity if companies act to capture opportunities,” said Jacques Penhirin, Partner and Managing Director of Greater China of Oliver Wyman.
The number of Chinese above 65 will grow to more than 210 million by 2030 from 110 million in 2010. By 2050, more than a quarter of the population will be over 65, according to the United Nations.
On the other hand, consumption of products and services for the elderly is already worth 4 trillion yuan in China and will surpass 100 trillion yuan by 2050, according to the China Research Centre on Ageing.
Penhirin pointed out three key potential sources of growth within the Chinese grey economy as it marches towards a market worth 100 trillion yuan: the desire of the elderly to protect their health and financial well-being, their wish to reduce the burdens on their family, and their eagerness to enjoy new experiences.
All are underserved in China.