Elderly.jpg (Photo : Reuters)
Pramerica Fosun Life Insurance Co., Fosun Property Holdings, Shanghai Fosun Pharmaceutical (Group) Co. and other subsidiaries of Fosun Group, one of China's largest private conglomerates, formalized on Wednesday a series of strategic cooperation agreements that could potentially position Fosun for an early lead in China's promising elder-care industry, according to an opinion piece by Liu Tian on the Global Times.
Shanghai-based Fosun is mainland China's largest privately owned conglomerate with business interests extending from industrial operations to asset management, investment and insurance. It also maintains several subsidiary companies in each of its businesses.
With the formalization of the deal, Fosun now joins many of China's largest private companies that have already taken the challenge of investing resources in the country's booming elderly care industry.
Aside from Fosun, giants like China Vanke, China Poly Group Corp and Greenland Group have also established retirement communities in several of China's largest cities, according to Liu. In 2012, insurance giant Ping An Insurance (Group) Co. pledged to invest billions of yuan into a retirement community in Zhejiang Province.
There are more than 200 million senior citizens in China today. By 2050, the elderly population is estimated to reach 400 million, or about one-third of the country's total population. As a result, according to China Briefing, "nursing homes are poised at the frontier of emerging investment opportunities in China."
Alberto Vettoretti of the consultancy Dezan Shira & Associates reportedly predicts that it "will be one of the largest business sectors of the Chinese economy--possibly even larger in size than property" and that the health care sector, which includes elderly care, "in the next 10 to 15 years, health care will take up the helm, or certainly be one of the top three drivers of China's economy."
"If scalable and profitable business models emerge, China could quickly become one of the world's most lucrative markets for senior care companies," according to China Business Review.
Presently, most foreign-funded elder-care facilities in China are aimed almost exclusively at the high end of the market. Fosun may do well to consider aiming at a lower but much broader segment of the market.
