Silver Economy

You may have heard this modern business mantra before: “Whoever wins over the youth, conquers the market.”

When asked about their target audience, most retailers and brands tend to mention Millennials or Generation Z.

This focus on younger generations may seem somewhat biased, given that brands have traditionally overlooked Generation X consumers. But Millennials and Gen Z dominate mainstream discourse, making them the key demographics that brands aim to win over.

A Quick Glossary: Generational Definition

Researchers have categorised people born since the 1960s into distinct generational groups: Generation X, Y, and Z.

Generation X: Individuals born between 1963 and 1973.

Generation Y: Those born between 1974 and 1979.

Generation Z: People born between 1980 and 1984.

Millennials: Those born between 1985 and 1995, often referred to as the internet-savvy generation who grew up alongside the digital boom.

From a macro perspective, there have been significant shifts in China's population structure. The country has entered an ageing phase, while the younger demographic in first-tier cities faces various pressures. These factors have collectively driven changes in consumption patterns among different groups.

Put simply, today's younger generation may place greater emphasis on “joyful frugality,” while many middle-aged and older individuals enjoy a life of wealth and leisure. This has opened up new opportunities in the silver economy, making it a promising and largely untapped market. It's time to redirect some of our attention from the younger generation to this emerging group.

Ageing Population Drives the Growth of the Silver Economy

Let's start with some figures.

According to the National Bureau of Statistics, the population of China aged 60 and over reached 296.97 million by the end of 2023, accounting for 21.1% of the total population. The 2023 China Middle-Aged and Elderly Market White Paper estimates that by 2028, China's middle-aged and elderly population will grow to 650 million, accounting for 46.3% of the total population.

The growing proportion of elderly people in society has made their consumption needs and purchasing power critical drivers of the market. This economic phenomenon, born out of an ageing society, is known as the silver economy.

What is the Silver Economy?

The silver economy encompasses all economic activities related to providing products and services for older adults or preparing for the later stages of life. It spans a wide range of industries, boasts extensive value chains, offers diverse business models, and holds enormous potential (according to Baidu Baike).

The emergence of the silver economy is tied to two key factors: increasing life expectancy and declining birth rates. Changes in population structure have pushed the middle-aged and elderly to the forefront of the consumer market. Currently, China's silver economy is worth approximately 7 trillion yuan, accounting for around 6% of GDP. Predictions suggest that by 2035, the silver economy could expand to 30 trillion yuan, contributing roughly 10% of GDP.

The Silver Economy is Entering a Golden Age

It's undeniable that ageing not only brings about changes in the population structures, but also drives the transformation of consumer demand. For the silver generation, life isn’t just about basic needs like food and clothing - they also seek higher levels of fulfilment and value. Beyond financial security, they desire high-quality, personalized products and services.

Currently, middle-aged and elderly consumers have rational consumption habits. They prioritise product quality, but factors such as price, functionality, and brand also strongly influence their purchasing decisions. At the same time, they have a significant appetite for spiritual and emotional consumption—they actively pursue a comprehensive lifestyle experience and are willing to invest in it. However, there are still limited opportunities for the silver generation to satisfy these spiritual needs, as many constraints still exist.

Fortunately, technology remains a powerful tool for addressing such challenges. Today, alongside traditional areas such as fitness, hobbies, and travel, digital fields such as online education and interest-based social networking are no longer exclusive to younger generations.

According to statistics released by the National Bureau of Statistics, the internet penetration rate among China's population aged 60 and above reached 57% in 2023. This demographic is increasingly active on social media, providing vast opportunities for content-driven e-commerce platforms. Live-streaming e-commerce and middle-aged key opinion leaders (KOLs) are also rapidly emerging.

Platforms like Douyin (China's version of TikTok) and WeChat Channels continue to steadily attract middle-aged and elderly users, while traditional e-commerce and offline stores remain the main channels for accessing services and products tailored to this demographic.

It's becoming increasingly clear that, when it comes to building brands, companies shouldn’t overlook the 45–64 age group.

To sum up, the silver economy spans a diverse range of industries, features extensive value chains, and encourages innovative business models. From elderly care products, smart health and rehabilitation devices, to anti-ageing solutions, financial solutions for the elderly, premium tourism services, and ageing-friendly renovations across society, the silver economy encompasses sectors ranging from primary to tertiary industries.

Give Young People a Break

As a vital part of society, the consumption demands and spending power of older generations are gradually being unlocked. However, the current market still offers relatively few products and services tailored to this demographic. This presents an opportunity for brands to shift their focus away from younger audiences and pay more attention to older consumers, gaining a deeper understanding of their needs and the trends in the ageing market, and enabling them to develop products and services that cater to them.

Of course, this doesn't mean that the importance of the youth market is declining. Younger consumers exhibit more active buying behaviours and stronger purchasing power, and they remain the dominant force in the consumer market. To strike a balance between older and younger markets, brands must conduct case-by-case analyses. Only by precisely targeting based on market realities and consumer needs can they ensure the relevance and effectiveness of their marketing strategies.

While the youth market is vibrant and full of potential, the silver economy is equally significant. Looking ahead, the silver economy is set to maintain its rapid growth, emerging as a driving force for China's high-quality economic development. Brands need to explore new opportunities in this blue-ocean market while continuing to engage with younger demographics.