China's 220 Million Seniors May Reshape the World

Health care is another industry that may be transformed. Unlike Japan and Western Europe, China is aging before it has grown rich enough to develop the institutions — such as nursing homes — needed to sustain a large senior population. Increasingly, the private sector is stepping in. For those who can’t afford to travel overseas, private preventative care is becoming much more common. Elsewhere, companies are developing “smart care” products, in which internet-connected devices track the health of customers. Beijing is expanding a program that uses a discount shopping card to monitor seniors while applying data analytics to anticipate their needs.

Nestle clearly understands these trends. At the launch of its new senior milk powder, a company official told the press: “As an old Chinese saying goes, ‘Diet cures more than the doctors.’” Long-term, that attitude — combined with investments in health-focused artificial intelligence and big data by companies such as Alibaba Group Holding Ltd. and Baidu Inc. — may well reshape the health care industry, both in China and globally.

But the area where China will have the biggest influence on the market for senior services will likely be housing. As of 2015, China had an average of only 26 nursing beds for every 1,000 seniors. Over the coming decades, it’s unlikely that the government will be able to build — much less staff — nearly enough facilities to meet the demands of its growing elderly population. As a result, it will need to develop new and more creative models for senior care.

That might mean more automation (there’s at least one robotics pilot program in Hangzhou). It could mean home care that’s supported by a network of internet-dispatched delivery services (especially for food). And it will surely mean an expansion of smart monitors and technology to interpret the data they collect. Given the size of the potential market, there’s reason for optimism that the China’s entrepreneurs can figure out low-cost models that work at home — and quite possibly overseas.

For China’s current generation of seniors, having come of age at a time of global isolation and domestic hardship, that’s a level of influence few could have imagined in their youth.

— Read Genworth Beats Earnings Expectations in Q1 on ThinkAdvisor.