China’s baby boomers are set to retire in the coming years, and they are spending differently than current retirees, the Credit Suisse report said.
These boom boomers, as defined in the report – are more aware of the health care needs of people born in the 1960s, and lead to a “very drastic change” in the country’s attitudes, said Will Stephens, Asia. Pacific quantitative and systematic strategy in the bank.
The impact of the elderly population will be felt in a variety of industries, from healthcare to insurance to travel and e-commerce, according to the report, which surveyed 1,500 middle-aged and elderly consumers in China.
Stephen said the group is “the largest group in history” – or about 245 million Chinese, and he highlighted the differences compared to the current pay generation of retirees.
He said, “I think the main difference here is the sheer scale and size of the current payload of Chinese baby boomers that will retire in the next 10 years.” He told CNBC on Tuesday that the boomer pay generation has emerged in line with China’s trend, which is the biggest growth trend in history. Therefore, they have different consumption patterns, different interests than what they see in current retirees. .
Citing the survey, Stephen said bo %% boom boomers expect existing healthcare social security schemes to not meet their needs.
“There’s definitely a concern in this group around maintaining safety,” he said. “There is a lot of interest in insurance products, and at the same time we see that this is likely to act as a catalyst for further improvement in the social security system in China – possibly things like the transfer of state-owned shares. Lifting equity caps in government pension funds.”
The report says that in the last 10 years, China has become richer with a per capita GDP of $ 2,100 to 10,000 10,000.
“At the rate of the US dollar, the middle class has begun to emerge in China and they have a lot of land to build insurance cover,” the analysts said in the report, adding that China has “one of the biggest security gaps” in Asia. Life and health insurance.
A man is pushed in a wheelchair on a Beijing street.
Wang Zhao | AFP | Getty Images
As a result, they wrote, there is a “huge potential” for the development of commercial insurance, including pensions.
At the same time, the Covid-19 crisis could have “some kind of silver lining” in accelerating the structural costs of health care in China, Stephens told CNBC, which is less than most developed economies.
Quality medical services in demand
Baby Boomers are seeking high quality medical services according to survey findings.
“We believe that the highest, most integrated private hospitals are likely to benefit from an older population that is qualitative,” the report said. In fact, the revenue compound annual growth rate of private hospitals reached 23.9% between 2014 and 2018, with public hospitals surpassing 10.4%.
As such, there will also be a demand for the highest medical consumer goods, such as implants and coronary stents. Orders for large-ticket medical devices such as ventilators, dialysis machines and MRI equipment used in hospitals could also increase, the report said.
The health food sector will be a “key beneficiary”, Credit Suisse said, predicting annual growth to exceed %% over the next few years.
The sector is valued at 40,440 billion yuan (. 8.8.8 billion), or 20% of global sales – up from 17% in 2017, the bank said.
“The adoption of health food by China is in its infancy, but we believe it will follow the trend of developed countries, especially its Asian neighbors, including Japan and Korea, in the long run,” the report said.
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