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Surge in China's elder products market and opportunities for foreign companies


Surge in China's elder products market and opportunities for foreign companies

China's rapidly aging population has spurred significant growth in the elder products market, with a particular focus on addressing the lifestyle needs of seniors. We summarize the key trends, major players, and government policies, based on the Dezan Shira & Associates' latest report on China and the emergence of robotics in elder care within the Chinese market.


The elder products market in China encompasses a wide range of offerings, including assistive technologies, home modifications, specialized clothing, personal care products, and nutritional supplements. This market is driven by the evolving lifestyle needs and preferences of the aging population, which seeks solutions to maintain independence and improve quality of life.



Foreign investment and government policies


The Chinese government has implemented policies to foster the growth of the silver economy and attract foreign investment in the elder care sector. Favorable policies include tax incentives, regulatory reforms, and the facilitation of foreign-owned elder care institutions. These measures aim to address the demographic challenges posed by an aging population while promoting economic growth and innovation in the elder care industry.


In 2014, the Chinese government issued the Elder Care Foreign Investment Circular, which granted elder care institutions with foreign investments the same preferential tax policies as domestic ones. The 2015 Implementing Opinions on Private Participation in Elder Care provided further benefits such as tax exemptions, administration levy reductions, and increased allocation of state lottery welfare funds to support the elder care sector.


Moreover, in 2016, the government announced plans to fully open the elderly care market to foreign investment by the end of 2020. This was followed by the removal of elder care institutions from the Special Administrative Measures (Negative List) for Foreign Investment Access in mid-2018, allowing foreign investors to establish wholly foreign-owned elder care institutions.


In October 2021, the Chinese government released its Development Action Plan for the Smart Elder Care Industry (2021-2025), which outlined specific smart products and services required for elderly care. This plan included initiatives such as wearable devices, rehabilitation robots, smart care products, telemedicine solutions, and comprehensive health management solutions.


Additionally, the Ministry of Commerce issued the 2022 Catalogue of Encouraged Industries for Foreign Investment, which encouraged foreign capital to invest in various sectors of the elderly care industry, including manufacturing intelligent health and elderly products, providing elderly services, and offering professional education related to senior care services.


These legislative reforms have created a favorable environment for foreign companies to enter the Chinese market. For instance, Columbia Pacific Management, an American-based company, partnered with Temasek, a Singaporean investment fund, to establish a joint venture named Columbia China. This joint venture operates senior living facilities and hospitals in China, with a portfolio that includes a hospital, two clinics, and three senior living facilities. They have further expansion projects underway, demonstrating the opportunities available for foreign investors in the growing Chinese elder care industry.


Emergence of robotics in elder care


As China's elderly population continues to grow, there is a pressing need for innovative solutions to address the shortage of care workers and meet the rising demand for elder care services. Robotics has emerged as a promising solution, with companies developing robots for rehabilitation, companionship, and nursing tasks.


There are already around 100 Chinese robotics startups specializing in rehabilitation, companionship, and nursing robots. Despite the potential benefits of robotics in elder care, challenges such as high costs and limited funding hinder widespread adoption. Many nursing homes struggle to afford robotic technologies, limiting their accessibility to seniors in need.


Case study: Hangzhou Lewan Science and Technology:


Hangzhou Lewan Science and Technology illustrates the opportunities and challenges facing foreign product companies in China's elder care market. Despite offering innovative solutions like food delivery robots, affordability remains a barrier for many nursing homes. However, with the right approach and investment, foreign companies can address these challenges and establish a strong presence in the Chinese market.


Conclusion


China's elder products market is experiencing rapid growth driven by demographic shifts and evolving consumer needs. With the emergence of robotics in elder care, there are opportunities to address the challenges posed by an aging population and enhance the quality of life for seniors. By fostering innovation and investment in the elder care sector, China can pave the way for a more sustainable and inclusive future for its aging population.



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