Ogilvy & Mather urges marketers to take note of China’s senior citizens

SHANGHAI - Mainland China’s 143 million senior citizens, a group larger than the entire population of Russia, have been largely left out of mainstream marketing and communications efforts, despite a combined annual income of between 300-400 billion renminbi. “Embracing Change, Realizing Dreams,” the latest study by Ogilvy & Mather Greater China’s consumer insight and trends unit Discovery, takes an empathetic view of their lives, their views about the changes in Chinese society over the last 20 years, how they have adapted to change and embraced modernity, and attempts to understand the relevance of various products and services to this demographic segment which is forecast to grow by 3% every year, doubling by 2025.

Combining ethnographic and quantitative methods, Ogilvy Discovery launched the study in
March 2008 in the megalopolises of Beijing and Shanghai, the relatively big city of Chengdu
and Foshan, a small town in Guangdong province. Responses were collected in equal
proportions from 1,100 men and women between the ages of 60-75, and 12 seniors in Beijing,
Chengdu and Foshan were filmed over two days each. The 52-minute documentary and photo
CD that accompany this release are available upon request.

O&M says the findings have strategic business implications for brands in obvious sectors such as healthcare but also for travel and leisure, financial services, technology, food and beverage and retail brands.

“We invested in this research because we realize that the more we understand about Chinese
consumers and the Chinese market as a whole, the more effective and culturally sensitive our
campaigns will be,” said Shenan Chuang, CEO of Ogilvy & Mather Group China. “We wanted to take a forward-looking approach to this topic because we believe seniors are an often overlooked demographic that is vital to the future success of many of our clients’ businesses in China.”

“As the per capita spending power of senior citizens is expected to rise from US$1,620 in 2005 to US$4,112 in 2015, it is imperative that companies understand what drives their needs, aspirations, and ultimately purchase decisions,” said Chuang.

Notably, the study finds that:

• 85% of senior citizens surveyed keep in touch with their friends through email.

• Their monthly spend on telecommunications ranks fourth after food, daily needs and
payment for utilities – higher than their medical expenses.

• Seniors have almost completely embraced modern retail formats, especially in Shanghai
and Beijing, with 84% and 96% respectively shopping at supermarkets and hypermarkets. However, in smaller cities such as Chengdu (50%) and Foshan (47%), that number is significantly lower.

• Seniors invest a lot in taking care of their health and taking preventive measures. 76%
do some form of regular exercise and 39% take dietary supplements and/or vitamins.

• 57% of those surveyed believe that western cultures have had a positive impact on
Chinese society, allowing China to internationalize, its citizens to learn from advanced
technology, and enabling an upgrade in living standards.

• At the same time, they worry about young people ‘embracing all things foreign’. 43%
believe that society becoming ‘too open’ is not such a good thing.

• 26% of the seniors we spoke to are agreeable to the idea of living in a retirement home,
seeking the companionship of other seniors over their family.

Kunal Sinha, Executive Director – Discovery, Ogilvy & Mather Greater China, said, “The lesson for us is evident: old people in China have changed faster than our beliefs about them. There is immense opportunity in the way they currently lead their lives.”

In conclusion, the authors of the study urge marketers to:

• Shed their bias against senior citizens and plead not to depict them as those who get in
the way of change.

• Create lifetime value for their senior customers, since older people are less fickle with
their brand choices.

• Ride upon the group behavior of senior citizens (as opposed to the individualism of the
youth).

“Brands, corporations and government agencies can either choose to treat aging as a problem, or they can view the optimism and adaptation capacity of this generation as an opportunity,” added Sinha.

About Ogilvy & Mather Group China
Ogilvy & Mather Group China is the largest marketing communications network in China. It
offers the full range of marketing communication disciplines including advertising, direct
marketing, interactive media, database management, public relations, graphic design, and
related marketing disciplines. As Brand Stewards, the agency works to leverage the brands of its clients by combining local know-how with a worldwide network, creating powerful campaigns that address local market needs while still reinforcing the same universal brand identity. Ogilvy & Mather integrates these communications disciplines using its proprietary 360 Degree Brand Stewardship process, which holds that every point of contact builds the brand. Ogilvy & Mather Worldwide (www.ogilvy.com) is one of the largest marketing communications network in the world, operating 497 offices in 125 countries. Ogilvy & Mather Worldwide is a member of WPP plc (NASDAQ: WPPGY), one of the world’s leading advertising and communications services groups.

About Ogilvy Discovery
Ogilvy Discovery is the consumer insights and trends unit of Ogilvy & Mather Greater China.
The Discovery team tracks changes in consumer culture, the evolution in influences on the
choices that people make – both in their lives and brands, and the social context of
consumption. In the last three years, the Discovery team has done large scale studies on
consumers and branding in China’s 2nd and 3rd tier cities, consumers and brand opportunities in the 4th-6th tier cities, the value of creativity in China, perceptions of Chinese corporations and brands in the developed and developing economies, Chinese nationalism and its impact on brands, China’s senior citizens, the nature of online influence on the millions of China’s netizens, and ethnographic comparisons between the social influences on decision making among the middle class in India and China. Ogilvy Discovery also develops a monthly digital newsletter called “Cool Path” that tracks and reports cutting-edge trends in China.