China’s silver economy is not only attracting attention from within the country, but also from abroad. By 2050 nearly 25% of the population will be above 60 years old; hundreds of millions of elderly will need to be provided for – creating both challenges and opportunities in China’s nascent elderly care market.
There will be an increasing demand for rehabilitation and assistive devices, home care services, elderly care facilities and financial (e.g. insurance) services. In this article we will focus on the opportunities the elderly care housing sector provides to foreign manufacturers of rehabilitation and assistive devices.
Don’t forget to read our previous articles about key developments in the Chinese elderly care and rehabilitation market and public and private elderly care institutions in China.
At this moment there are several European and American facilities being developed in mainly China’s coastal regions.
The common approach of foreign elderly care facilities in China has been to establish luxurious elderly care facilities, mainly focusing on the top segment of the market. According to Michael Qu, Partner at LawView Partners and specialized in the Chinese elderly housing sector, these facilities bear a resemblance to luxury hotels and provide a high quality of care to their tenants and generally use foreign equipment.
An example is Cypress Garden Senior Living in Hangzhou, a premium nursery home being developed by U.S.-owned China Senior Care Inc.
“Our facility and most of the foreign operated facilities are using foreign brands for all their rehabilitation equipment. My understanding is that most Chinese-owned facilities purchase domestic brands…“ – Mark Spitalnik, President & CEO of China Senior Care Inc.
In terms of location, most foreign facilities are being developed in the richer coastal areas and first-tier and second-tier cities, where people enjoy higher standards of living.
”The development in the sector is currently being driven from the major cities: Beijing, Tianjin, Shanghai and Shenzhen although there is quite a lot of activity starting in second tier cities such as Guiyang, Chengdu, Chongqing, Hangzhou, Nanjing, Qingdao etc. Also, Hainan Island is proving a popular location for lifestyle retirement developments” – Roger Battersby, Managing Partner of PRP architects
It is still too early to say whether providing luxury turnkey facilities will prove to be the most successful strategy. The services provided in these facilities are of high quality and therefore perceived as worth the investment; however, the market for such luxurious care is significantly smaller than the medium-segment of the market. A high-end facility can charge a monthly fee of 10,000- 50,000RMB a month for one bed, whereas a mid-range facility charges in the range of 3,000-9,000 RMB a month.
Many experts foresee a change in the future, meaning the development of more mid-range facilities to support the growing middle-class.
How do you think the market will develop?
This article is part of a series on the elderly care and rehabilitation devices market in China. Stay tuned the coming weeks to learn more about how to sell in the Chinese elderly care and rehabilitation market and subscribe to our newsletter to receive our free sector report about the rehabilitation and assistive devices market in China.
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