Counseling for the elderly is developing rapidly in China

China’s population is rapidly aging, creating a promising and fast-growing market for companies offering leisure classes and activities—from yoga to African drumming and smartphone photography—to the middle-aged and older middle classes.

The industry’s growth potential contrasts with the decline of the after-school private tutoring industry in the wake of a 2021 government crackdown aimed at boosting record-low birth rates by lowering education costs.

“The education industry is transforming into a silver economy,” said Qiu Peilin, Beijing head of senior learning company Sunset Mama, which has opened five centers in the Chinese capital since its founding in April 2023.

Consulting firm Frost & Sullivan predicts that China’s advanced learning market will grow at a compound annual growth rate of 34% by 2027, from US$3.8 billion in 2022 to US$16.8 billion.

This is a numbers game.

Over the next decade, approximately 300 million Chinese will enter retirement—nearly the entire population of the United States. Euromonitor estimates that by 2040, one in every two people over 65 in the Asia-Pacific region will live in China.

While China’s demographic crisis is threatening its industrial base, government finances and poverty alleviation efforts, some investors see a growing elderly population as a given.

Sunset Mama, which offers 20 different classes to thousands of Chinese over 50, is in talks with domestic investors to expand to 200 franchise centers across the country over the next three years, by which time it hopes to open in Hong Kong Listed on an exchange.

Quantasing, China’s largest online senior learning provider listed on the Nasdaq, plans to hire more Tai Chi and traditional medicine instructors to add to existing courses ranging from memory training to video editing, according to Frost & Sullivan.

The company also plans to leverage its customer base to sell products such as moxa sticks or Chinese liquor used in traditional medicine.

In the fourth quarter of last year, Quantasing’s revenue increased by 24.7% year-on-year to US$136.2 million, and as of the end of 2023, its total number of registered users increased by 44.6% year-on-year to US$15.8 million.

“This is a real sunrise industry,” said Matt Peng, the company’s chief executive.

The Chinese government is also getting involved, announcing tax incentives and financial support for products and services for seniors in January. Premier Li Qiang pledged in March further efforts to develop a “silver economy” but did not elaborate.

As part of a poverty alleviation program, the Hebei provincial government provided land and space for Sunset Mama’s Cangzhou branch.

However, some analysts warn that if China cannot make the leap that other aging societies have done, first escaping the middle-income trap, then heavy investment in industries targeting the elderly may be a little too hasty.

Analysts say low retirement income and insecurity related to basic needs such as health care will limit the industry’s potential in a society where many older adults rely on their children for financial support.

Euromonitor research manager Rachel He said China’s elderly population is a promising consumer group, but it is questionable whether it can match the importance of the Japanese and Korean markets in the short term.

She cited “significant income inequality” and more conservative attitudes among China’s elderly, who are less willing to spend money on themselves.

Average monthly pensions in cities range from around US$422 in less developed provinces to around US$845 in Beijing. Nomura Securities estimates that 160 million Chinese receive rural pensions of only about US$14 per month.

A class at Mama Sunset is $7-$8, while a 36-class package is $278. At Quantasing, plans for one to three months range in price from $278 to $520.

Cui Chunyun, a 60-year-old retired accountant in Beijing, took Sunset Mama dance classes to stay in shape to keep up with her five grandchildren and delay entering a nursing home.

“I want to be able to move, even people over 70 can still dance, we have to move to live.