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February 5, 2018

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Alibaba seeks advice from China’s oldest consumers

WANTED: two consultants 60 years or older. No degree or previous work history required, but applicants must have at least one year of experience shopping online.

What’s this? A job advert targeted exclusively at the older generation in an age when so much emphasis is on young consumers.

Yes. It’s an attempt by Alibaba, China’s largest e-commerce operator, to recruit elderly advisers to help it design and promote a customized platform for older shoppers on its Taobao e-retail site.

The hiring notice has drawn a lot of comment. Some call it a crass marketing gimmick. Others say its overdue attention paid to the growing number of senior citizens in China and their often ignored spending potential.

The campaign comes as traditional online shopping has hit a peak and is slowing. So Alibaba is turning its attention to a generation that often gets sidelined in marketing strategy. For one thing, the company has announced it is upgrading its software to better suit seniors by simplifying the login process and making the purchasing process easier on Taobao.

The hiring notice offered annual salaries of as much as 400,000 yuan (US$62,500). It also said preference would be given to people who have good communication skills and are movers and shakers in their local neighborhoods. In other words, it helps to have community influence.

Since the recruitment announcement was unveiled in mid-January, some 3,000 people have applied. Last week, 10 candidates gathered at the Alibaba campus in Hangzhou to discuss with Taobao workers how to make online shopping more accessible and pleasant for the older generation.

Li Lu, who at 83 is the eldest of the 10 and a graduate of Tsinghua University in Beijing, spoke to the needs of older Chinese shoppers.

“We care about product quality,” she said, “and we exchange shopping experiences in WeChat groups. The opinions of friends and family matter in our shopping.”

Li has been using a computer since 1995, so she doesn’t have any trouble navigating the net. She said she started shopping on Taobao about three years ago.

“Although we didn’t trust online shopping at first because we couldn’t touch the merchandise to size it up before buying, family members persuaded many of us to take the first step,” she said. “I’ve since built up trust toward online shopping.”

Zhang Zhonglin, 71, a native of Sichuan Province, guessed that only about one of 10 of his peers can manage online shopping without problems.

After moving to Hangzhou to be closer to his son several years ago, Zhang gradually began logging into Taobao to purchase Sichuan spices. Many of his friends ask him to place Taobao orders on their behalf, he said.

“Who doesn’t want to get their daily necessities delivered to the door in cold or rainy weather?” he said. “But for many, online shopping and digital wallets require too many complicated passwords or authorization codes, causing people to get stuck at the very beginning of the process.”

Tmall and Taobao boast nearly 30 million registered elderly shoppers, with 75 percent of them aged between 50 and 59, according to Alibaba in a statement last October.

In the first nine months in 2017, shoppers 50 years or older spent an average 5,000 yuan on Tmall and Taobao, with each buyer purchasing an average 44 items on the sites.

Elderly shoppers indeed seem eager to have their voices heard, for example, in what kind of features they want to see on a special edition of Taobao’s smartphone application. Among their suggestions are tailor-made modules focused on services and products most commonly used by senior citizens.

Duan Manting, Taobao’s product manager, admitted that Taobao is eager to tap the purchasing power of senior citizens and draw on their wealth of experience in finding ways to improve the company’s services.

Silver-haired set

The Alibaba jobs on offer involve organizing offline discussion groups, distributing questionnaires to elderly shoppers to get feedback and advising the product team on how to satisfy the needs of the silver-haired set. Obviously, wide social connections in local communities are a recruitment plus.

“The aging population is an inevitable trend in China,” said Rebecca Liu, chief marketing officer of Saatchi & Saatchi China. “The same goes for the ever increasing trend of digitalization in our everyday lives. Digital services providers need to invest time and money in the elderly shopping segment.”

Her company provides communication solutions for international and local brands, including Porsche, Mead Johnson and Mondelez.

“Many elderly citizens have safety concerns when using digital payment systems, and service providers should be more aware of that concern and help them gradually build trust, such as giving out free digital coupons at the initial stage,” she said. “Also, special functions such as voice service, slower processing times and bigger icons would help elderly customers to benefit from new technologies.”

A survey by e-retailer and Southern Metropolis Daily last year found that JD shoppers 56 years or older increased 50 percent a year from 2015 to 2017, and their spending power jumped 86 percent last year alone.

The product categories most patronized by older shoppers include electronic appliances and home decorative items. Some 64 percent of them, the survey found, shopped via smartphones or WeChat/QQ channels in 2017, double the percentage in 2015.

As many as 43.5 percent of respondents spent an average 500-1,499 yuan a month on e-commerce sites.

But old habits die hard.

A 63-year-yold Nanjing resident surnamed Jiang, who lives with her husband and daughter, said she still prefers to shop by walking through a door, where she can examine and handle merchandise before paying for it.

“Although my daughter purchases our daily provisions online and even though using mobile payments for offline shopping is easy enough, I still want to go into shopping malls or grocery stores for myself,” she said.

Internet infrastructure has improved considerably in recent years and many elderly people have no trouble using smartphones, according to Simon Sun, a partner with PwC Strategy&.

Indeed, about 80 percent of the 230 million people in China 60 years or older use mobile phones, according to the Ministry of Civil Affairs.

“Internet companies need to recognize that the elderly consumer group will definitely enjoy higher-than-average growth in the coming years and there’s a huge market opportunity there,” Sun said, noting the general lack of services now tailored to older shoppers.

Consumer electronics and daily necessities such as food and clothing would be an ideal place to start to build up trust with senior shoppers and get them in the habit of buying online, Sun added.


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