Preparing for tomorrow: Fu Shou Yuan launches prepay services
Fu Shou Yuan International, the mainland’s largest provider of funeral services, has pioneered the sale of pre-need funeral plans as a way of diversifying its businesses from the sale of burial sites amid changing cultural attitudes toward death.
About 100 senior citizens in Shanghai have bought the service, which includes cremation, disposition of the ashes of the deceased, arrangements for the funeral ceremonies and related logistics work.
Zhao Yu, board secretary of Hong Kong-listed Fu Shou Yuan, told the South China Morning Post that the company was also actively lobbying national authorities to formulate standards to govern the business.
“The sale of the pre-need plan is only on a trial basis,” he said. “We hope the government could take the lead in creating and regulating the market.”
The trial sales arrangement includes three types of contracts costing 6,000 yuan (US$870), 8,000 yuan and 12,000 yuan.
The mainland’s civil affairs authorities retain tight control on the funeral services market, including oversight of business operations involving funeral houses and cemeteries, while also maintaining controls on prices.
Focus Investment Management chief executive Jiao Bing is an advocate for reforming the funeral system.
“Chinese people should learn that an end of life can not only be mourned, but also be celebrated,” he said. “A deceased person can be remembered in various ways. The funeral sector is more than an industry, it’s about education of life.”
Fu Shou Yuan, which operates in 16 Chinese cities, reported 2016 net profit of 448.5 million yuan, up 23 per cent from a year earlier. Fu Shou Yuan released is annual results on March 17.
In the densely populated city of Shanghai, a land shortage has resulted in soaring burial costs, with a grave site in the outlying districts of Qingpu and Jiading going for as much as 100,000 yuan.
The prohibitive cost structure has prompted the search for alternative burial methods, including sea burials.
Fu Shou Yuan said it would look for opportunities to acquire smaller rivals this year.
Aside from the sale of burial sites, the company is seeking to diversify into the cemetery management and funeral service segments, even though they are less profitable.
“We don’t want to rush now,” said Zhao. “We want to make sure that everything, particularly the rules and regulations, are ready before making a strong effort to expand the businesses.”
China Merchants Securities forecast that the market size for China’s funeral services could hit 200 billion yuan by 2020.
Shares of Fu Shou Yuan fell 1.1 per cent to HK$4.7 in mid-afternoon trade on Monday.