Market Opportunity: Elderly Care Service in China
The current Chinese demographic shift is manifesting a change in the country’s needs and demands. The country is experiencing a rapid growth of the aging population. Among the factors influencing the growth in the elderly population to include the many improvements in medicine and quality of life. Because of these, China’s average life expectancy increased from 66 to 77 years between 1985 and 2015 and is projected to reach 80 in 2050. 222 million Chinese citizens are aged over 60, accounting for about 16 percent of China’s population. By 2050, the number is expected to double. Despite the projections for 2050, it’s expected that China will soon be the world’s most aged society by 2030.
The annual value of the provided care services and products for elderly in China is under 100 billion RMB, while the demand implies a massive potential, estimated at one trillion RMB. Moreover, the ratio of elderly dependency, meaning the number of elderly people out of every 100 working people, is expected to rise from 13.7 to 46.7 by 2050. Thus, the inability of young people to take care of the large aging population will create a huge demand for the nursing home industry and different senior care providers. Elderly care receives support from government promotions as the growing number of people who need long-term care and people with chronic diseases create future challenges for the nation. Nevertheless, the “young-minded” Chinese elderly are becoming the newest consumers creating further business opportunities.
According to Daxue Consulting’s project manager Hu Yuwan, in earlier times, the aging society didn’t even consider going to nursing homes, especially in China, but this kind of thinking is changing now, one reason is the transformation of many from poor to middle class in China. However, pricing is still one of the most important elements to influence peoples’ choice.
Case description: Elderly Care Service in China
Daxue Consulting has an excellent background in the healthcare industry. Our market research team has carried out projects for different clients overseas, seeking to enter the Chinese market, including the leading provider of nursing homes in Europe. The client approached our well-experienced team to provide an assessment of the high-end nursing home market regarding size, demand, and supply as well as a comprehensive competitor analysis, including pricing and business models throughout the nation. Therefore, Daxue Consulting prepared a market-entry project comprising the following steps of the market research:
Phase 1: Desk Research
As a first step, our research team executed an extensive desk research to gather preliminary information about the market segment in China and obtain a comprehensive database. Therefore, Daxue Consulting conducted online research comprising national offers, such as pension platforms, industry relevant websites, BBS (Forums specialized on healthcare), blogs, WeChat, Weibo, and much more. Then, Daxue’s team filtered the collected information to narrow the scope considering the type, price, fees, services, facilities and medical care. The final list of well-selected high-end nursing homes was the base for further investigations.
Phase 2: Competitors’ analysis & Mystery visits
To gain a clear understanding of the business model, pricing, and its corresponding services, Daxue Consulting performed a detailed competitors’ analysis. It encompassed, for instance, the evaluation of the market position in the service and medical care, location, pricing, commercial partners, and cooperative operations in China. Moreover, our research team collected relevant keywords of communication during the competitor’s benchmark.
Daxue Consulting, additionally, performed mystery visits and mystery calls targeting nursing homes with specific guidance. Thus, our team could fill the missing gaps and complete the information, such as general outside situation, personnel, and discount negotiation.
Phase 3: Final Report & Recommendations
After Daxue had finalized the information, our market research team cross-analyzed the data and prepared the findings. The final report included a comprehensive overview of the industry and highlighted local competitors’ strengths and weaknesses in the high-end nursing home market in China. Additionally, our team provided a mapping of the supply of nursing homes across the country. Daxue Consulting also gave recommendations concerning the design of our clients’ entry strategy comprising successful business models and strategies considering, for instance, price, positioning, services, and offers.
To know more about the elderly industry in China, please don’t hesitate to contact us.
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