Here Is Another “One Billion Consumers”: The Over 55s

Business, China, Company Strategy, Economics, Europe, US

New-Old-1950-Oct15a

By John Richardson

FOR too many years people have shuffled from one board meeting to the next, and one conference to the next, in order to talk meaninglessly about “the rise of China’s middle classes” and “one billion Chinese consumers”.

Why the talk has essentially been meaningless is because firstly, people bother to try and understand that what it has always meant to be middle class in China, and the rest of the emerging world, is vastly different from what it means to be middle class in the West.

And secondly, whilst yes it is of course true that China has one billion and more consumers (all you have to do to work that one out is to look at the country’s population), China is very sensibly not putting this vast army of spenders entirely into the service of overseas companies. Its government is instead doing the absolute maximum to ensure that it is Chinese companies and investors that will in the future gain the most from all the tremendous opportunities. It will, for example, be local companies like Alibaba, that gain the most from the huge growth in Internet sales and not Amazon etc.

Board meetings must therefore be more challenging, with discussions that focus on all these “grey areas”. So must every single conference paper.

And before anyone else thinks of the catchy slogan, and disappears to write some wholly misleading research paper or book on this theme, here is another one billion people to think about: The one billion who will become “New Olders”,” thanks to the increase life expectancy of the Babyboomers, between 2000 and 2030.

The above chart, based on UN Population Division data, in more detail, shows that:

  • The number of people in the New Old 55+ generation is rising from 250m in 1950 to 1.8bn by 2030.
  • In terms of total world population, their numbers will double from 11% to 22% over the same period.

You can just imagine the slickly put together, visually stunning PowerPoint slides showing armies of these people populating luxury retirement communities in Florida etc. playing endless rounds of golf and glowing with the “best that money can buy” good health.

But sadly, anyone who takes a sensible look at the next 15 years and more knows that many of this generation will struggle to get by on their pensions, and that government budgets across the developed world will struggle to cover rising healthcare costs. So the biggest opportunities for chemicals companies, and for other manufacturers, will centre on affordability and reliability –  and not luxury.

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