Protocol | China

China's Big Tech goes for the Big Grey

There's a huge, growing, rich tech market finally being tapped: China's seniors. What can the West learn from early wins?

An older man looks at his phone while relaxing in People's Park in Shanghai.
LezlieN via Flickr

Fang Huiling, a 70-year-old retired worker from the eastern Chinese province of Zhejiang, considers herself a "techy" senior. Unlike many in her age group, Fang is active on social media, fluent in online shopping and is able to get around with ease using the digital wallets and codes required on subway and buses. Still, when she was traveling to southwestern China's Yunnan province last year, she had to ask her son to book a taxi for her remotely so that she could catch her flight. "I didn't even have a car-hailing app on my phone," Fang said. (The economical Fang, who usually takes a bus, hadn't realized the extent to which cabs had been replaced by apps like Didi Chuxing.)

Hundreds of millions of China's seniors — or the "silver hair economy" (银发经济) — face similar barriers as China rapidly morphs into a digitized society. As China ages and the tech industry struggles to find users who haven't been exposed to high tech, the elderly — a growing population with tremendous buying power — is becoming the next must-win market that elite tech cannot afford to leave behind.

Just last week, search engine Baidu pushed out an app with enlarged text and a streamlined interface for the older population. On Jan. 25, carpooling unicorn Didi rolled out Didi Care, which allows older users to hail taxis more easily.

China's government has also made its position clear. Last December, the Ministry of Industry and Information Technology announced a year-long campaign to make nearly 160 websites and apps more accessible for the aging and the disabled. The State Council, China's Cabinet, issued a set of measures last November mandating improved technological accessibility for the elderly and encouraging the tech industry to create products compatible with the elderly population's needs and habits. By 2022, China says, it will find a way to close the elderly's "digital divide."

China has 255 million people 60 or older, 18% of the country's total population. By 2030, this age group will comprise one-fourth. During the COVID-19 pandemic, homebound elderly have been forced to digitize their lifestyles, spending more time on social media, news apps and ecommerce sites than ever before. In June 2020, 22.8% of China's 940 million internet users were aged 50 or older, up from 16.9% just three months prior and from 13.6% one year before. According to Beijing-based analytics firm QuestMobile, in 2020, netizens older than 50 spent an average of 136 hours online each month, surging 39% from 2017.

This is a population with larger consumer power than China's indebted Gen X and Millennials; as a group, they've accumulated tremendous wealth following the market reforms that started in the 1980s. A 2020 Alibaba report showed that customers older than 60 were more active on Taobao than other age groups, and the money they spent on Taobao increased nearly 21% over the past three years, a growth rate only second to that of Gen Z's.

'Banner year' for the 'elderly track'

"2021 is going to be a banner year for the silver hair track," said Duan Mingjie, CEO of AgeClub, a Beijing-based consulting firm focused on China's aging economy. (In China's tech industry, the word saidao (赛道), meaning track, is commonly used to describe a subsector.) Duan said three leading Chinese tech companies approached him after the central government came forward with elder-friendly policies to address the digital gap. "Large companies will speed up to enter the market in response to the government's call to launch relevant products and services," he told Protocol.

The elder tech boomlet began about five years ago when several smaller tech companies stumbled upon the large market. Tangdou, an app that teaches dancing to older women, has attracted millions of users and has raised $32 million since 2015, with a Series C funding round led by Tencent. Meipian, one of retired worker Fang's favorite apps, has made inroads in the elderly market by allowing users to edit and collage photos and share them on social media without having to write captions, which they don't like. That company now is worth more than $27 million.

Now, big tech is catching on to the fact that a population it's mostly ignored will be the biggest, and last, source of new users within Chinese border. Ecommerce giants JD.com and Taobao have rolled out apps tailored for the price-sensitive elderly in the past few years, promoting low-priced foods and household supplies as well as health care products targeted at seniors. ByteDance's Toutiao has optimized its news-aggregating app, adding a screen reader for the visually impaired. Short video platforms Kuaishou and Douyin have also acquired sizable elderly user bases by promoting influencers in the target age groups.

It's just a start. "The companies that recently tried optimizing apps for the elderly haven't deeply engaged with the population," Duan said. "They've just started exploring." Duan says American companies are lagging behind and can learn from Chinese tech by developing more tool-based products, such as Meipian, that breaks down the target audience's barriers to use via simplified interfaces and a streamlined function set.

Chinese banks have also rolled out special apps to serve the older population after realizing they make up the majority of the clients consuming their financial products. Government data shows that in 2016, the most recent year for which data is available, 45% of China's urban elderly had savings accounts, each with an average savings of roughly $12,400. This is 25% higher than the 2020 average savings of all Chinese citizens.

One big caveat

Sociologists and economists generally support China's elder-friendly policy guidance and tech companies' attempts to cater to the silver market — after all, they're incorporating a much-neglected population into China's economic and digital life. But they are concerned that the profit-driven tech industry, one with often ageist internal cultures, may hurt the very population it is trying to serve.

"This can relieve a lot of isolation, the feeling of being left behind, to really combat that sense of loss as you get into an older age and this society is changing at a fast pace," Baozhen Luo, a sociologist researching aging policies at Western Washington University, told Protocol. The key, Luo says, is having a robust regulatory system in place to protect the elderly.

A 2018 study on the older adults' digital life conducted by Chinese Academy of Social Sciences and Tencent Research Institute shows that 67% of China's elderly have fallen victim to online scams. Luo also worries privacy problems can be exacerbated for seniors, some of whom are experiencing cognitive decline. "When profit becomes the sole purpose in a sector that is not properly regulated, humanistic values are thrown into the trash," Luo said. China's elderly have already felt vulnerable as the country transitioned into an ultra-competitive market-oriented economy from the socialist planned economy in which they grew up. Tech products catered to seniors offer tech the chance to avoid making the same mistake.

Fang, the retired worker, doesn't know much about privacy. She just looks forward to a more convenient late life. "If the tech companies can design more products that meet old folks' needs, with enlarged text, streamlined functions and simple design, that'd be wonderful."

Correction: An earlier version of this story misstated the name of Baozhen Luo's university affiliation. This story was updated Feb. 12 2021.

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