Many Chinese couples whose only child has left home plan to travel widely

China is witnessing the emergence of a new consumer group – the working ‘empty-nesters’. They are usually 40 to 64 years old and had their child when relatively young. Once the son or daughter leaves home, their disposable income makes them a fast-expanding consumer market.

These households often have already paid off their mortgages and purchased household goods such as cars, washing machines and flat-screen televisions. In terms of discretionary spending, they are moving from buying things to purchasing experiences, not least travel.

This new social group is mostly located on China’s wealthy and aspirational eastern seaboard

This new social group is mostly located on China’s wealthy and aspirational eastern seaboard. They are the largest, fastest-growing consumer market globally, according to some demographers. The number of over-40s Chinese households with earnings of between USD20,000 and USD125,000 is projected to grow from 99 million in 2016 to 220 million in a decade.

While many companies still focus on the tech-savvy, brand-conscious under-25s, this market is now actually on the decline as a percentage of the total population.

The empty-nesters, however, are moving upmarket and becoming more brand-conscious. They travel more and, with the children gone, are spending on their homes: they want better kitchens and air-conditioners or new tiles for the bathroom, for instance. As tourists, they are ready to try more exotic destinations in Europe or Australia. And these ageing empty-nesters will spend far more on healthcare, too.

The empty-nester phenomenon is common in the West but is new to China, where the single son or daughter was the focus of most household spending. Now their cherished child has left home, the house is paid for, and there’s a nice car outside to impress the neighbours. But they want more. They are on the look-out for better homes, healthier lifestyles and a ticket to see the world.

It’s a different story elsewhere in Asia, where the pace of urbanisation is slower and rural consumers remain a powerful force in countries like Indonesia. However, urbanisation is growing slowly in India, rising from 36 per cent in 2016 to a forecast 39 per cent in 2026. Affluence is thus growing in Indian cities, while rural areas remain home to an increasing number of poor people with insufficient education to enable them to escape. So, within this rural-urban divide, social customs are changing.

Elsewhere in Asia, female participation in the labour force varies significantly. The rate remains below 50 per cent in Indonesia, Thailand and Malaysia but is nearly 70 per cent in Thailand and more than 80 per cent in Cambodia. This could be because of the high number of children per household or result from cultural or religious reasons, but it means a high dependency ratio that acts as a brake on growth in household income.

But these countries elsewhere in Asia are making many of the goods bought by China’s empty-nesters.

This research was first published on 5 June 2017.
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