Nielsen has published a piece on the marketers dilemma for an ageing China. No real news here but at least it’s good to see companies identifying the issue.
Here’s summary of Neilsens suggestions for marketers:
- A mix of brands targeted to different demographic groups, or those that work well in India or other less-developed nations, may struggle in China. Large families with children, typically the biggest market segment available in the less-developed world, are nonexistent in China. Very few households have more than two children and those with one greatly outnumber those with two.
- As the Chinese population ages, household sizes will continue to shrink and the share of households that have children will continue to fall. This means less variance in the buying rate for products that rely on use by multiple family members for volume. Gaining new users and the retention of current users will be far more important strategies than seeking to grow volume within existing users.
Lessons marketers learn in the more-developed world about targeting older consumers should pay dividends in China. By around 2038, there will be as many persons older than the age of 65 in China as there are younger than the age of 20. After 2038, older consumers will outnumber younger ones. Marketers who can tap these older generations could do very well:
- Marketing across the Generations: Previously compiled advice for marketers seeking to target members of the US Baby Boom (ages 45-63) and Greatest (64-plus) generations may also prove helpful for marketers targeting China’s aging population.
- Greatest Generation: Freebies and senior discounts to appeal to their value orientation. This means special products addressing aging issues and special packs for smaller households. Stores should offer better signage, more forgiving package design, on-shelf or on-cart magnifying glasses.
- Keep big spending Boomers happy with monthly or quarterly cash-back savings programs that reflect spending levels. Pursue the upsell into prescription medications, insurance, gifts for grandkids and kids, entertainment and travel.
These are sweeping generalizations and should be treated as ‘starters for ten’ only.