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Fashion’s Next Big Opportunity in China: Older Shoppers

An obsession with youth may be costing fashion and beauty brands a slice of China’s $880 million silver economy.
'Fashion grandmas' model Wang Nianwen attends a fashion show at Yizhuang town on October 26, 2017 in Beijing, China. Getty Images.
'Fashion grandmas' model Wang Nianwen attends a fashion show at Yizhuang town on October 26, 2017 in Beijing, China. Getty Images.

Grace Han’s videos on Douyin, China’s version of TikTok, have amassed more than two billion views. Her lifestyle — which features frequent breakfasts at Shanghai’s five-star Bulgari Hotel, events for high-end brands, and a bold fashion sense — is aspirational to her hundreds of thousands of social media followers.

What makes Han, affectionately known as Auntie Han, even more of an inspiration to her fans is her age. At 74, she is one of a growing cohort of “silver-haired KOLs” (or key opinion leaders, as influencers are commonly called in China) who are gaining traction in the world’s most populous country.

“I wanted to be a model when I was 17 but I didn’t get on the stage until I was 71,” Han jokes, still seemingly incredulous about her own online popularity.

“Whatever I recommend, it will be sold out,” she said. “In April I posted a video that had 3.5 million views and the outfit sold 5,000 pieces.”

On Douyin, there is now a phalanx of senior citizen influencers like Han, including one of the most high-profile, 79 year-old Wang Biyun who has amassed more than 20 million fans on her social channels using the handle @GrandmaWangWhoOnlyWearsHighHeels. Famous for dancing and singing pop songs while wearing form-fitting dresses and heels, Wang’s content is popular largely because of her lack of self-consciousness.

It has also helped drive sales for her regular livestreams, one of which sold 15 million yuan ($2.32 million) of merchandise in a single session.

Fashion influencer Grace Han is 74 years-old. Grace Han.

Refusing to Fade Into Obscurity

A self-styled collective called ‘Fashion Grandmas’, who have 23 core members in Beijing and a rotating group of affiliate members around China, aged from their late-50s to mid-70s, recently came to prominence with street style videos showing members dressed in glamorous outfits, striding through Beijing’s streets as though they were catwalks.

The women have since monetised their popularity on Douyin by jumping on China’s boom in livestream commerce and promoting messages about universal beauty and age being no barrier to happiness and success. It flips the traditional script for Chinese elders to gracefully fade into obscurity once their productive working years have passed.

“I have told my followers that age doesn’t matter,” Han said. “As an old person, we are an example for the youngsters, we need to [show them] how to handle life.”

The rise of older influencers isn’t a phenomenon confined to China; in the West, the movement has been growing for years as fashion influencers like Lyn Slater, 66, (known on Instagram as Accidental Icon) gained fame and older models started securing campaigns for brands like Celine and Saint Laurent.

“When you show an older woman in a campaign, not only does she have the power to inspire a younger person, but also the power to inspire her generation,” says Ari Seth Cohen, the American founder of Advanced Style, a blog and Instagram account devoted to capturing the “sartorial savvy of the senior set.”

But the increased attention these pension-age KOLs are receiving in China comes at a time when the country’s focus is fixed on the challenges associated with a rapidly ageing society.

Opportunity in a Demographic Problem

Last month, Chinese authorities released the results of the country’s once-in-a-decade census, which confirmed a declining birth rate and increasing average age in the country. They also announced that the two-child policy will change, as couples are now allowed to have up to three children. However, demographers are sceptical that enough people will take up the opportunity to reverse the tide.

It’s very tough to convince [fashion brands] that this is a huge opportunity, in spite of all the signals we are seeing.

The country’s workforce has shrunk by 40 million people over the past 10 years to 880 million, a trend which will put pressure on China’s ability to pay and care for an ageing nation. The share of the population aged 65 and older accounted for 13.5 percent of the 1.4 billion population in 2020, far higher than the 8.87 percent registered in 2010. According to United Nations estimates, mainland China’s population will peak in 2030 before declining.

What does all this mean for fashion brands that have been voraciously chasing the country’s youngest consumers, the Gen-Z and Millennial generations (Post-90s and Post-00s in the local parlance)?

According to SawGin Toh, a managing partner at Incite Consulting, it suggests that brands of all kinds need to re-evaluate the relative importance of China’s older consumers to their business, and devise specific strategies to meet their unique needs.

Toh recently authored a report that identified “satisfying silvers” as one of the seven key strategies to accelerate business growth in China, though she is the first to admit that it hasn’t been easy convincing brands — especially fashion brands — to get on board.

“Especially with fashion and luxury brands, it’s very tough to convince them that this is a huge opportunity, in spite of all the signals we are seeing,” she said.

Those signals include projections that China’s “silver economy” will reach 5.7 trillion yuan ($881.63 million) by 2021, an increase of 16 percent from 2020, according to iiMedia Research.

Older consumers are increasingly engaged in digital life, making them easier for marketers to target than in the recent past. According to data from the China Internet Network Information Centre, the proportion of China’s internet users aged 60 and above rose from 4 percent at the end of 2016 to 10.3 percent in June 2020.

According to Tmall Global, women over the age of 55 increased purchases of imported goods by 59 percent year-on-year in 2020, with a particular uptick in categories such as beauty, health, smart devices and outdoor products.

Many are retired or approaching retirement age (most Chinese workers retire by the age of 60) and are the first generation of older consumers in China, Toh says, who are acquiring a new level of “lifestyle appreciation” after a working life spent accumulating significant capital.

Toh believes that the image of older consumers in China as being particularly price-sensitive is somewhat outdated as new entrants to the senior citizen cohort increasingly look to quality as the top priority — marking a shift that would seem to bode well for higher-priced, non-essential consumer categories like fashion and luxury.

With such compelling data to support a seemingly attractive opportunity, why then are brands slow to shift some of their attention away from the youth demographic?

For one, luxury consumers in China skew young; a recent report by Tencent and BCG estimates that the average age is just 28, a full ten years younger than their counterparts elsewhere. But that’s not all.

Brands Still Reluctant to Associate With Seniors

“A lot of clients would say, it’s great that it’s an opportunity but I don’t want my brand to be a brand for the silver generation,” Toh explained, adding that brands from global sportswear giants to top European luxury houses remain hyper-focused on the association with youth, freshness and cool to attract young consumers and are hesitant to give up any ground they have made with that important cohort.

However, some fashion and luxury brands have begun opening up their marketing campaigns to include at least a few influencers or models who are not in the fresh-faced idol template.

In July 2020, for example, Gucci invited people aged 61 to 87 to participate in its Accidental Influencer campaign in China, a move which was well-received on Weibo, with commenters focused on the “adorable” older faces and their appealing and aspirational joie de vivre.

Domestic lingerie brand Neiwei, a company leading the way when it comes to broadening the representation of beauty in Chinese advertising campaigns, made waves last year by appointing Faye Wong, 51, as its global ambassador. And just last month, Dior added a more senior appointment to its celebrity line-up in China, announcing that transgender celebrity dancer and television personality Jin Xing, 53, would be the face of a high-profile fragrance campaign.

In moving even marginally away from the well-worn youth-obsessed formula to incorporate older faces in their marketing, these brands have actually managed to inject a feeling of freshness into their campaigns, one that has the added benefit of appealing to Chinese consumers of all ages.

For fashion and luxury brands hesitant to change their branding or image to be more age-inclusive, Toh says it isn’t actually necessary to utilise older faces in campaigns, when what this demographic finds desirable are messages about quality and heritage combined with close and personalised service, rather than seeing themselves reflected in billboards.

“What is important is the tonality and how you communicate… that’s more critical than who you use [as a model, influencer or ambassador],” she said.

The Biggest Opportunity Lies Ahead

According to Daniel Zipser, senior partner and head of McKinsey & Company’s consumer and retail practice in Greater China, the biggest opportunity for fashion and luxury isn’t actually today’s silver generation. Rather it’s the elderly of tomorrow.

Though there is a great deal of wealth tied up in China’s current population of over-55s, Zipser said this generation is often more focused on investing which means their money is more likely to be spent on real estate, education and gold than on consumer goods like fashion and beauty categories.

“[The silver generation] has not been a great source of growth for luxury brands or consumer goods in general but that is changing and in five to ten years, I see it as a massive opportunity, in terms of the then older generation being excited about luxury and consumer goods,” he said.

The real game-changers will be the cohort that comes into this older age range next. Zipser points out that consumers who are today in their 40s, meaning those born as China began its opening up to the outside world and extraordinary economic ascent, are the country’s first true “consumer generation.” But as their lives slow down, that desire to consume isn’t likely to go anywhere.

I treat myself like a queen and I think every woman should do the same.

“It pays to be there early,” Zipser said, adding that even this cohort isn’t widely targeted in fashion and luxury marketing and communications in China.

“It does pay to position yourself so you’re not just a Gen-Z brand,” he said. “It’s not like the luxury brands are focusing on those aged 35 to 45 either, you do have a very young focus in the communications.”

Even though most luxury brands have collections full of products that suit older customers, their lack of care and attention at the marketing level suggests that the opportunity is underexploited.

Grace Han, for one, has noticed that gap and decided to take full advantage. Her own fashion brand focused on “quiet elegance” and exclusivity for stylish older women like herself will launch later this year.

“[Most brands] don’t understand the figure of old ladies,” said Han. “I treat myself like a queen and I think every woman should do the same.”

时尚与美容

FASHION & BEAUTY

Inside a Saucony Inc. shoe store, a brand owned by Xtep International Holdings Ltd., in Shanghai, China. Getty Images.

Chinese Sportswear Giant Taps $129 Million Funding for Global Push

Sportswear manufacturing group Xstep International will receive a HKD $1 billion ($129.4 million) capital infusion from private equity firm Hillhouse Capital, which will go towards promoting its foreign brands including K-Swiss and Palladium internationally. Last year, Xtep’s profit dropped 30 percent on the back of the pandemic and growing competition from homegrown rivals Anta Sports and Li Ning. While all three firms are listed on the Hong Kong Stock Exchange, both Anta Sports’ and Li Ning’s market capitalisations have grown at least 30 percent this year; the firms are worth HKD $435.8 billion ($56.1 billion) and HKD $190.2 billion ($24.5) respectively, while Xstep lags behind at HKD $29.9 billion ($3.9 billion). (BoF)

Chinese Netizens Still Haven’t Forgiven D&G

In the video for Hong Kong actress and singer Karen Mok’s new song, “Woman for All Seasons,” she wears a Dolce and Gabbana robe, swimsuit and accessories. Commentators in China quickly criticised her for supporting the brand, with some calling for a boycott. Mok responded in an interview that there was no ill will behind the styling choices, but she and her team were “definitely in the wrong,” promising to be more careful in the future. Many netizens have since accepted her apology, but the same can’t be said for the luxury brand, which remains in the doghouse. (BoF)

科技与创新

TECH & INNOVATION

Tmall's turnover in the first hour of 618 was up 100 percent year-on-year. Shutterstock.

China’s 618 Shopping Festival Rakes in Big Sales for E-Commerce Giants

China’s 618 sales festival, which started life as an anniversary sale commemorating the founding of JD.com on June 18, has become the most important promotion season for brands and e-commerce players in the country, after Singles’ Day in November. By 2pm on June 18, JD.com said its 618 gross merchandising volume (GMV) reached 305.6 billion yuan ($47.48 billion). Douyin, a relative newcomer to the e-commerce battlefield, hasn’t released its latest sales figures, but previously revealed it had amassed more than 1.4 billion yuan ($217.5 million) in GMV on the first day of its 618 campaign. The latest data from Tmall, the e-commerce platform owned by the Alibaba Group, showed that its turnover in the first hour of 618 was up 100 percent year-on-year. (BoF)

Luxury Brands Jump Into WeChat’s New Xiaohongshu Collab

WeChat’s mini-programmes, a tool many of the world’s fashion, beauty and luxury brands already use as part of their direct-to-consumer e-commerce operations in China, are now accessible via the Xiaohongshu social commerce platform. Followers of official Xiaohongshu accounts for luxury brands such as Louis Vuitton, Gucci, Celine, Saint Laurent and Givenchy, can now directly click through from Xiaohongshu to those brands’ WeChat mini-programmes to purchase and pay for goods. The move marks the beginning of a shift in China’s social media sphere, which has long been made up of separate closed ecosystems, to a more open and collaborative environment. (BoF)

消费与零售

CONSUMER & RETAIL

Harrods, The Residence, Shanghai. Harrods.

Harrods Opens Second China Outpost

The British luxury department store institution has opened its second iteration of The Residence, as it calls its invitation-only culture, events and personal shopping spaces in China. The new outpost, in Beijing, is located at The Opposite House hotel, and has its own private restaurant. It plans to offer exclusive products such as haute couture, high jewellery and watches, as well as social events for its local clientele, Harrods said. The department store has been doubling down on China for some time. In 2019, it held a three-day pop-up The Residence experience in Shanghai, and then set up a permanent version last year. This marked the first time the company had expanded its private shopping service outside of London. (BoF)

Chinese Cross-Border E-Commerce Grows 46.5% in Q1

According to Chinese customs statistics, China’s cross-border e-commerce imports and exports reached 419.5 billion yuan ($65.57 billion) in the first quarter of this year, up 46.5 percent year-on-year. Last year, China’s cross-border e-commerce imports and exports reached 1.69 trillion yuan ($264.17 billion), up 31.1 percent over 2019. Incoming cross-border e-commerce in China has boomed as consumers wish to access more international brands from home as international travel, and its accompanying shopping sprees, have come to a halt. According to estimates from iiMedia Research, 211 million people in China used cross-border platforms in 2020. (BoF)

政治,经济与社会

POLITICS, ECONOMY, SOCIETY

Cargo container terminal, Hong Kong. Shutterstock.

China’s Worse-Than-Suez Ship Delays Set to Widen Trade Chaos

When one of China’s busiest ports announced it wouldn’t accept new export containers in late May because of a Covid-19 outbreak, it was supposed to be up and running again in a few days. But as the partial shutdown drags on, it’s further snarling trade routes and lifting record freight prices even higher. Yantian Port now says it will be back to normal by the end of June, but just as it took several weeks for ship schedules and supply chains to recover from the vessel blocking the Suez Canal in March, it may take months for the cargo backlog in southern China to clear while the fallout ripples to ports worldwide. (Bloomberg)

China Retail Sales Rise 12.4% in May, Miss Expectations

China’s retail sales rose 12.4 percent in May, according to data released by the country’s National Bureau of Statistics (NBS), missing expectations in spite of a bid to boost spending, particularly around the Labour Day holiday at the beginning of May. Analysts had expected retail sales to rise 13.6 percent in May from a year ago, when China was beginning its re-opening from lockdowns and restrictions imposed during its initial battle with Covid-19. May 2021 retail sales came in 9.3 percent higher than the same month in 2019, prior to the pandemic. (BoF)

China Decoded wants to hear from you. Send tips, suggestions, complaints and compliments to our Shanghai-based Asia Correspondent casey.hall@businessoffashion.com.

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