China Demographics: With Challenges Come Opportunities

Slowing population growth, coupled with a decline in the labour force

Growth in China‘s population is set to slow down in the long run, as birth rates remain low. A dwindling workforce will put upward pressure on labour costs and affect China‘s competitiveness, while the risk of labour shortage represents an opportunity for industrial automation technologies.

A strong expansion in the elderly consumer segment

China’s consumers are getting older, with one in every six persons being aged over 65 by 2030. Rapid population ageing poses a threat to China’s pension system and undermines labour productivity and market growth potential. Nevertheless, the growth of elderly consumers will create new business opportunities, particularly in the elderly care, health, wellness and home appliances sectors.

More than two-thirds of Chinese will live in cities by 2030

Despite some recent slowdowns, the rural-urban migration trend continues in China, with strong expansion expected for lower-tier, mid-sized cities. Urbanisation will lead to changes in household size and lifestyles, while supporting middle class expansion and fuelling consumer demand. Urban infrastructure is under growing pressure, but this also gives rise to new business models.

Consumers suffer from increasing health risks

Chinese consumers enjoy higher life expectancy, but also encounter more health problems, such as diabetes, obesity and high blood pressure. To mitigate health risks, consumers are increasingly embracing healthier living and eating lifestyles.

With challenges come opportunities

Despite major demographic challenges, China continues to represent a fast-growing consumer market with vast opportunities for businesses. The country‘s increasingly-urbanised consumer landscape with an expanding middle class and changing family/household structure is creating new consumer trends, which will shape the ways businesses create and market their products in the future.