Demand Exceeds Supply

According to the research done by China National Committee on Aging, the amount of aging people is estimated to skyrocket to 487 million, which is about 35 percent of the population in 2053. In 2013, Shanghai, as the first city in China to transformed into aging society, has a population of more than 4.4 million senior citizens above 60 years old. Although Shanghai is regarded as a developed city in China, nursing home industry is still lack of effective government policy to instruct and sufficient space to accommodate elder people. The total number of beds could be provided to accommodate elder people is only 102 thousands, among those, merely 36 thousands in the central city and rest of nursing homes are located in the suburb cities because of the scarce land resource. The huge discrepancy between supply and market need disappoints a lot of Chinese who expect to send their elder parents to nursing home.

The Current Situation of Chinese Nursing Home Industry

At present, most of the nursing homes in Shanghai are operated by state-owned companies or NGO firms. Compare to NGO firms, state-owned companies are more welcomed and preferred by people because of its lower price. Nevertheless, all of them are trapped into an embarrassing situation of deficit whatever NGO firms or state-owned ones. The fee charged by nursing home is strictly regulated by government within a standard. Take Shanghai No. 1 Nursing Welfare Institution as an example, a single senior person is required to pay 500 RMB for attending fee, 480 RMB for accommodation, and at least 150 RMB for nursing fee. This nursing home institution is merely capable of providing 190 beddings to the public. Therefore, nursing home organization is limited by government in respect of pricing and non-profitable purpose so that it is helpless to expand its scale to recruit more elder people. As for average people, spending 2300 RMB for an elder person a month is mostly acceptable and affordable. While, the present situation faced by those people is nowhere to find a suitable nursing home to enroll in.

French Company Targets at China

As the second largest company in Nursing Industry in France, Colisee Patrimoine Group is specialized in attending elder people who are unable to take care of themselves. M.Brunelet, CEO of this group, expressed that China is a huge and potential market for them. He told in the future Chinese elder men may need much more assist from nurse than women since two reasons; this gender group of people is lack of ability to take care of themselves; also a census shows that the amount of male that is over 70 years old exceeds that of female at the same age level. In January of 2013, Colisee Patrimoine Group cooperated with CITIC Trust to launch a nursing home project in Yun Nan province and shows great interest and confidence to be a drive in China.

Written by Limo from Daxue Consulting & Market Research

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