china| chinaauthorShen LuNoneDavid Wertime and our data-obsessed China team analyze China tech for you. Every Wednesday, with alerts on key stories and research.9338dd5bb5
×

Get access to Protocol

I’ve already subscribed

Will be used in accordance with our Privacy Policy

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 (The economical Fang, who usually takes a bus, hadn't realized the extent to which cabs had been replaced by apps like Didi Chuxing.)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.

People

Making the economy work for Black entrepreneurs

Funding for Black-owned startups needs to grow. That's just the start.

"There is no quick fix to close the racial wealth and opportunity gaps, but there are many ways companies can help," said Mastercard's Michael Froman.

Photo: DigitalVision/Getty Images

Michael Froman is the vice chairman and president of Strategic Growth for Mastercard.

When Tanya Van Court's daughter shared her 9th birthday wish list — a bike and an investment account — Tanya had a moment of inspiration. She wondered whether helping more kids get excited about saving for goals and learning simple financial principles could help them build a pathway to financial security. With a goal of reaching every kid in America, she founded Goalsetter, a savings and financial literacy app for kids. Last month, Tanya brought in backers including NBA stars Kevin Durant and Chris Paul, raising $3.9 million in seed funding.

Keep Reading Show less
Michael Froman
Michael Froman serves as vice chairman and president, Strategic Growth for Mastercard. He and his team drive inclusive growth efforts and partner across public and private sectors to address major societal and economic issues. From 2013 to 2017, Mike served as the U.S. trade representative, President Barack Obama’s principal adviser and negotiator on international trade and investment issues. He is a distinguished fellow of the Council on Foreign Relations and a member of the board of directors of The Walt Disney Company.
Sponsored Content

Building better relationships in the age of all-remote work

How Stripe, Xero and ModSquad work with external partners and customers in Slack channels to build stronger, lasting relationships.

Image: Original by Damian Zaleski

Every business leader knows you can learn the most about your customers and partners by meeting them face-to-face. But in the wake of Covid-19, the kinds of conversations that were taking place over coffee, meals and in company halls are now relegated to video conferences—which can be less effective for nurturing relationships—and email.

Email inboxes, with hard-to-search threads and siloed messages, not only slow down communication but are also an easy target for scammers. Earlier this year, Google reported more than 18 million daily malware and phishing emails related to Covid-19 scams in just one week and more than 240 million daily spam messages.

Keep Reading Show less
Transforming 2021

Blockchain, QR codes and your phone: the race to build vaccine passports

Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.

One day, you might not need to carry that physical passport around, either.

Photo: CommonPass

There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.

Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.

Keep Reading Show less
Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

Latest Stories