The time is ripe for foreign investors to break into the Chinese senior care market and build their brand, but that doesn’t mean they’ll have an easy path to widespread cultural acceptance.
A couple different American investors and senior living providers are currently working on some senior care projects in China, including a joint venture between U.S.-based Emeritus and Columbia Pacific Advisors, Cascade Healthcare, which opened its first senior care center in Shanghai in October.
However, there are cultural barriers that need to be overcome in order to achieve success, says a China Daily article.
Traditional values hold that families care for their elderly in the home, rather than move them into a designated senior housing or care community. That may be changing, though, due to China’s “one child” policy and a world-wide surge in the senior population.
Chinese children are feeling pressured by what’s called the “421” family structure, says the article, where they’re responsible to take care of not just their parents, but also their grandparents. Many households are also dual-income, providing more budget flexibility and the ability to pay for senior care rather than provide it themselves.
The “real crunch” of this situation will come after 2015, according to Qu Qin, a lawyer with Shanghai Co-Effort Law Firm and editor of China Senior Housing and Care Newsletter—making now the “optimal time for foreign investors to enter the market,” says China Daily.
“The timing at present is ripe for foreign investors to enter the market and build their brand,” Qu says.
Foreign—especially U.S.—senior care brands may enjoy better success in China because of a positive perception among middle-class families who can afford to pay for quality care, the article says.
However, because the nation’s current crop of senior care facilities have largely been government-sponsored and geared toward low-income families, there is a perception that assisted living communities are a sign of luxury—and that’s another cultural barrier foreign companies would have to cross.
If senior care companies want the private market to grow, they’ll have to convince younger generations that putting their parents into a senior living community isn’t necessarily a bad thing, Serena Xie, managing director of Cascade Healthcare, said in the article.
While China has a staggering 181 million seniors, foreign healthcare providers providing high-end, private pay services may only be able to target a small portion of those: About 90% of seniors are expected to “age in place” by remaining in their own homes or living with their children, and another 7% are expected to live in communities—usually government-funded—geared toward low-income seniors. That leaves only about 3% of the market, or 5.4 million Chinese seniors.
Written by Alyssa Gerace