Guojin Securities: The Yinfa Economy ushered in a period of opportunity, and policies helped promote diversified industrial development

The Zhitong Finance App learned that Guojin Securities released a research report saying that China is facing a significant trend of population aging. The population aged 60 and above has reached 310 million, accounting for 22%, and the next 5-10 years will usher in a second-generation baby boomer population entering large-scale old age, providing a huge potential audience for the Yinfa economy. Policy support, deepening online channel penetration, and supply-side innovation have jointly promoted the high-quality development of the silver hair market. The needs of the silver hair community showed diverse characteristics, spawning various segments such as smart nursing and scooters for the elderly. Overall, driven by aging trends and policies, the Yinfa economy has broad market prospects, and the industry is showing diversified development trends.

Guojin Securities's main views are as follows:

With the help of aging trends+policies, the silver hair economy has great potential

1) Potential audience: The proportion of the elderly population continues to rise, and second-generation baby boomers are about to enter old age. In 2024, China's population aged 60 and above reached 310 million, accounting for 22% of the country's population. The average number of births between 1962 and 1975 exceeded 25 million, and a large number will enter the retirement stage within the next 5-10 years. 2) Intent to spend: The willingness of new bankers to spend has increased. The post-60s and post-70s grew up during the dividend period of reform and opening-up, accumulated sufficient income and wealth, and strengthened their ability to pay; they also generally had a good physical condition, and their overall willingness to spend increased. 3) Ability to pay: Long-term care insurance+pension reduces the burden of care. The total economic cost of failure in 21-23 was approximately $1.35 trillion, accounting for 1.1% of GDP in '23. In order to solve the problem of long-term care coverage for disabled people, China has begun exploring a long-term care insurance system. As of 3M22, 145 million people in 49 pilot cities have participated in long-term care insurance, with a cumulative total of 1.72 million beneficiaries; for the first time, 7M25 supports care services for the disabled elderly in the form of consumer subsidies at the national level, effectively reducing the burden of family care for disabled people. 4) Supply innovation: Policy support to accelerate the high-quality development of the Yinfa economic market. Since the 14th Five-Year Plan, policies related to the elderly have been intensively introduced to promote the development of multi-level and diversified old-age services. The six departments of 11M25 jointly issued the “Implementation Plan on Enhancing the Adaptability of Consumer Goods to Further Promote Consumption”, incorporating elderly products into the “three trillion level” and “ten hundred billion level”, and using systematic, standardized, and intelligent product supply to solve the current pain points of old-age care. 5) Scenario transformation: Increased penetration of online channels and expanded consumption scenarios for silver-haired people. In 2017-2024, the number of Internet users aged 60 and above in China increased from about 36 million to nearly 160 million. The active penetration rate of mobile shopping among the silver-haired population reached 82%, and the number of monthly active users of silver-haired people on Taobao and Pinduoduo platforms exceeded 150 million. 6) Impact results: The market size of China's Yinfa economy continues to grow. In 2023, China's banking economy reached 7.1 trillion yuan, and the market CAGR reached 13.2% in 2019-2023.

Silver hair groups present diverse needs, spurring diversified development of the industry

The differentiation characteristics of the silver hair group are obvious, and their needs are diverse. This diversity mainly stems from two levels: 1) Starting from individuals, as the Chinese economy moves from rapid growth to a stage of medium to high quality growth, consumption not only satisfies the basic needs of clothing, food, lodging, and travel, but also needs to pay attention to additional emotional value and emotional value. 2) Heterogeneity within the silver hair community has given birth to diverse needs. China's “silver hair people” have experienced drastic social changes and institutional gaps in their lives. Elderly people of different generations, regions, educational backgrounds, and career trajectories have shown unprecedented diversity in terms of health status, wealth accumulation, values, and digital literacy.

Investment advice

Analysis of the Yinfa Consumer Goods and Service Circuit: 1) Smart Elderly Care: Aging and digitalization coexist, and smart old-age care has become a development trend. Before the advent of nursing robots, smart cameras and smart wearable devices were already used in the field of nursing care. Through automation and intelligent technology, robots help the elderly improve their quality of life, enhance their independence, and reduce the burden of old-age care on families and society. Furthermore, smart toilets are highly convenient to meet the needs of the elderly. Their penetration rate has reached a high level in mature markets such as Japan, the US, and South Korea, and there is still room for improvement in our country. 2) Scooters for the elderly: The elderly are still very willing to travel. They need casual tricycles with high safety, easy operation, and excellent comfort for short trips on a daily basis. 3) Pet food supplies: Empty nesters account for more than half and need emotional companionship and spiritual support. Pets not only provide emotional comfort, but also increase activity and socialization, and help promote the physical and mental health of the elderly. 4) Convenience supermarkets: Convenience supermarket products are mainly in high-frequency demand categories, and the offline ecology is more in line with the consumption habits of the elderly. 5) Prepared ingredients: The aging population and the downsizing of households have increased the demand to make food less difficult to cook. 6) Health products: Ageing+young people's sub-health drive increased health awareness, and demand for health products is becoming more and more obvious. 7) Adult incontinence: According to the US CDC, 50.9% of people aged 65 and over have urinary incontinence or accidental fecal incontinence. China's adult incontinence care products industry started late, but there is plenty of room for growth. 8) Integrated medical care: Integrated medical care combines medical resources with pension resources to maximize the use of social resources and provide a cost-effective solution for the transfer of family pension pressure.

Recommended attention: [Smart Elderly Care] Chongqing Department Store, Xiaomi Group-W, [Pet Food] China Pet Co., Ltd., Guibao Pet, [Health Products] Ling Rui Pharmaceutical.

Risk Alerts

The spending power of the elderly population falls short of expectations, online channels add barriers to the consumption of the elderly population, and inadequate market access mechanisms and supervision have led to uneven supply.