The success logic of the 200 billion yuan entertainment/education market for the middle-aged and elderly: customer acquisition, operation, and monetization

More and more middle-aged and elderly people are rediscovering the dreams of their youth, which has generated a large demand for "self-liberation consumption" and "dream-fulfilling economy". The commercial potential of cultural and entertainment education for middle-aged and elderly people will also explode.

At present, there are two major consumption opportunities in the domestic middle-aged and elderly market:

The first category is the elderly consumer goods market, especially opportunities in the e-commerce field for middle-aged and elderly people. We have previously analyzed the case of pure online shoes for middle-aged and elderly people, which quickly achieved an annual revenue of 200 million yuan through large e-commerce platforms: Taobao/Pinduoduo and social sharing.

The second category is the entertainment/education market for middle-aged and elderly people, which mainly focuses on time consumption experience and has a relatively high average order value, such as modeling performances, art education, etc.

The baby boomers born in the 1950s and 1960s are entering retirement. They have plenty of free time, stable income cash flow, and good health, so they have a lot of free time that needs to be filled with various activities.

At the same time, their life status is also facing a period of transition, that is, switching from putting family first and suppressing themselves to "letting go of themselves" after retirement. There is an opportunity to pursue the dreams of youth again, which generates a large demand for "self-liberation consumption" and "dream-fulfilling economy", which is the driving force behind the opportunities in the elderly entertainment market.

Through front-line research, we have seen a number of middle-aged and elderly entertainment/education entrepreneurial projects on the market, which specialize in providing cultural and art courses other than traditional senior universities for middle-aged and elderly people aged 50-70, and have also made many groundbreaking explorations and attempts in business.

Inventory of middle-aged and elderly education projects:

In 2017, there were about 106 million elderly people in Chinese families with a monthly household income of more than 4,000 yuan, of which 16 million had a monthly income of more than 10,000 yuan. In the social context of an increasingly complete medical insurance and welfare system, the daily expenses of the elderly will shift more toward living consumption, cultural and entertainment areas.

Around 2000, Japan entered the stage of an aging society. The elderly in Japan have also been upgrading from saving as much as possible to pursuing quality life and spiritual experience. Currently, Chinese elderly people are also experiencing this transformation.

The difference between the two markets is that after more than ten years of development, the Japanese market has a very rich supply of cultural and entertainment services, and the market share of cultural entertainment and tourism and leisure is basically balanced. However, the proportion of cultural entertainment in China's elderly consumer market is seriously low, less than 1/20 of that of tourism and leisure, and there are large gaps in product content.

At present, there is a serious shortage of high-quality entertainment services for the middle-aged and elderly population in the Chinese market. On the one hand, the market selectively ignores the middle-aged and elderly people who have stable incomes and plenty of free time;

On the other hand, there are great regional differences among the middle-aged and elderly population. Their ages, regions, interests, hobbies, and personality traits are different, and their demands for cultural and entertainment services are also very diverse. Every link needs to be carefully polished. This is not an industry that can make quick money.

Below we will analyze the industry status and business model of middle-aged and elderly education from three aspects:

1. To acquire customers, what methods can be used to efficiently gather middle-aged and elderly users?
2. Operations, how to formulate various online and offline operation strategies?
3. Monetization: What kind of strategy can achieve efficient business conversion?

Customer acquisition: Online entertainment content is the most efficient way to attract middle-aged and elderly users

Before the massive migration of middle-aged and elderly users to mobile Internet in 2016, TV stations had long been the center of cultural and entertainment life for Chinese elderly people. After 2016, with the rapid popularization of WeChat among the middle-aged and elderly groups, a trend of rise and fall occurred:

TV shopping sales fell 10% in 2017 compared to 2015, while the number of middle-aged and elderly WeChat users increased sevenfold from 7.68 million in September 2016 to 63 million in September 2018.

As China's 400 million middle-aged and elderly users aged 50 and above gradually migrated from television to mobile Internet, thematic online content has become the most efficient and lowest-cost means of attracting middle-aged and elderly users.

Even if only 1% or 2% of people are interested in any specific topic, there may be millions or tens of millions of potential users.

• WeChat official accounts and mini-programs have been the preferred platforms for middle-aged and elderly content entrepreneurs in recent years. For example, the theme of Le Tuizu is fashion and dressing, which is quite popular among middle-aged and elderly women.
• The nursing housekeeper has set up an online senior university with 1 million minutes of audio and video courses, mainly targeting the 60-70 year old cultural seniors;
• Mochi plans content and courses around online calligraphy and Chinese painting, and has attracted many middle-aged and elderly male users.

In the planning and operation of content, it is not only necessary to conduct a comprehensive exploration of the topic itself, but it is also particularly important to accurately grasp the psychology of the target users. For example, each issue of Le Tui Clan, in addition to its signature fashion and dressing content, also often plans some topics that hit the inner feelings of the elderly, arousing strong resonance among the elderly.

For example, a recent article titled "Should I find a companion when I get old? This article has a very thorough analysis...”, which directly hits the loneliness and emotional needs deep in the heart of the elderly. The number of readers exceeded 100,000+ an hour after it was posted on the morning of the day. The user comments at the bottom of the article were also very enthusiastic, forming a lively "speech square" atmosphere.

These companies also increase users' social depth and usage time, and bring users closer to the platform by linking online communities, mini-games, music albums and other functions on the WeChat platform.

After 2018, the WeChat public accounts and mini-programs targeting middle-aged and elderly people have also fallen into a period of stagnant fan growth. However, this does not mean that there are no opportunities for content entrepreneurship targeting middle-aged and elderly people. We believe that the opportunity lies in the trend of middle-aged and elderly users migrating to new media platforms and new communication channels.

Our incubator AgeSpaseX has settled in a project - Lao Yang Faner. Initially, it created graphic and text products with the theme of elderly fashion on WeChat, Weibo, and Toutiao platforms. The number of fans and reading volume hovered at a low level for a long time. After switching to Douyin and launching the "Fanfan's Niece" short video product line focusing on the fashionable lifestyle of elderly women, it accumulated 380,000 fans in just 3 months.

This actually shows that there are already quite a few middle-aged and elderly users on Douyin, but there is a lack of content specifically created for them. This "content hunger period" is a new entrepreneurial opportunity.

Operation: Education for middle-aged and elderly people has strong operational attributes, and online and offline operations require overall operations

After online content successfully gathers middle-aged and elderly users, the road to commercial monetization still requires strong support from offline operations. The income obtained from online monetization alone is very limited.

For example, the online course "Yinling Academy" under Le Tui Zu has the best-selling course "Taiwan Model Tutorial for Middle-aged and Elderly People", priced at 199 yuan, with 1,112 paying users and revenue exceeding 200,000 yuan.

Mochi has the highest income from a single online course. The course with the highest number of buyers was "Teacher Wang Yajun's Precision Copying of Regular Script, Running Script and Cursive Script", with 11,444, 5,468 and 5,174 participants respectively, with a total income of approximately RMB 700,000.

Of course, there is still a big gap between online income and offline income:

Judging from the tuition fees for offline courses, the average customer price is much higher than that for online courses. The tuition fee for the "Zero-Based Model Class" launched by Le Tui Zu is 1,380 yuan per person, and the membership price is 1,080 yuan per person, with 20 class hours. If the 5-day and 4-night training class includes accommodation and sightseeing, the price will rise to two to three thousand yuan or even higher.

The recently launched "Master Series of Courses: Wang Yunsheng's Classical Charm Shaping Course" by Meihao Shengnian has a total of 18 classes, with tuition of 2,400 yuan per person.

Judging from the interviews, the significance of online courses is more to provide users who have completed offline courses to review at home, or to give some users the opportunity to try the experience for the first time at a low price.

Therefore, for start-up companies, the current focus of operations is mainly on offline courses and various activities, competitions, and performances. The elderly care manager, which has always positioned itself as an online university for the elderly, has recently begun to explore models of cooperation with offline B-ends.

The significance of offline operations lies in three aspects:

First, from the perspective of course learning, offline courses are more interactive. The teacher teaches on-site in person, which provides better learning effects for middle-aged and elderly people. Moreover, from the perspective of the psychological needs of the elderly, one of the main purposes of their participation in courses is to relieve the loneliness in daily life. Offline courses are precisely the best social scene for making friends and resolving loneliness.

Second, from the perspective of customer acquisition, serving old customers well is far more important than constantly developing new customers. As the WeChat dividend is gradually disappearing, online traffic is becoming increasingly scarce. There are still many elderly people who are beyond the influence of smartphones and WeChat. It is necessary to tap more traffic from middle-aged and elderly users from offline scenarios. Good offline operations can often produce a powerful social fission effect. From what we have learned, for companies with rich offline operation experience, such as Le Tui Zu and Kuaile 50, bringing in new customers is the primary source of their customers, followed by methods such as door-to-door sales and flyers.

Third, from the perspective of the operation system, online operation is the best way to deliver product information at any time and maintain contact with users around the clock. Offline operations contain more touchpoints for improving user experience and building trust. They are the key to breaking through the psychological barriers of middle-aged and elderly users and increasing repeat purchases and high-value business conversions.

Of course, offline operations also face some problems. One is that in first- and second-tier cities where the elderly have strong spending power, the rental costs are also high. If you add in decoration, purchase of art teaching aids, etc., the initial investment is quite large. If you cannot quickly acquire customers and achieve positive cash flow, it is easy to be dragged down by losses.

Regarding this issue, you can consider cooperating with educational complexes/tourist cities, using their already renovated art classrooms equipped with complete teaching aids to offer senior citizen courses, and then share the course income with the educational complex.

This can greatly reduce the financial pressure on enterprises. According to simple estimates, there are currently thousands of education complexes across the country. The income-sharing model is conducive to the rapid expansion of elderly education enterprises across the country.

Monetization: A strong experience that triggers spiritual motivation is the key to high-value monetization

Judging from the current state of the industry, the startups that have been relatively successful in monetizing senior education companies are all providing derivative services beyond courses, such as modeling and talent-themed travel.

This shows that the commercial value of entertainment education for middle-aged and elderly people exists at two levels:

• The first is product value, which is the revenue from users purchasing courses. This part of income is suppressed by the low prices of traditional senior citizen universities. At the same time, middle-aged and elderly people have just started to get in touch with art education and have a low level of acceptance. It is difficult to significantly increase the average customer spending in the short term, so the income growth rate is relatively slow.
• The second is traffic value, which is the key to high-value monetization. When a company establishes a solid sense of trust and a strong emotional connection with middle-aged and elderly users through continuous and systematic operations, and then converts these users into customized modeling and talent-themed tours, the revenue generated far exceeds the course revenue.

In 2018, Le Tuizu organized a Japan Cruise Art Festival with more than 800 participants. In the one year since its establishment, Meihao Shengnian has organized more than a dozen overseas tours, with 25-30 people in each group. Both have revenues in the millions.

During the operation, the core of the successful monetization of the two companies is to create a strong experience that continuously triggers spiritual motivation around the three spiritual needs of the middle-aged and elderly groups: belonging, respect and self-realization.

In this process, the elderly regain a sense of belonging and respect. In their eyes, they are no longer old men and women who have nothing to do after retirement, but "trendsetters" who are at the forefront of fashion trends.

What’s interesting is that “old men” who are traditionally believed to have nothing to do with fashion are increasingly appearing in modeling courses and competitions.

At the final of the 2018 Beijing Middle-aged and Elderly Fashion Week hosted by Le Tuizu, 30 elderly men with an average age of 65 appeared on the catwalk.

When a company provides middle-aged and elderly users with a strong and lasting "peak experience", it means that a business closed loop has truly been established.

The cultural and entertainment education industry for middle-aged and elderly people is still in its infancy, but more and more entrepreneurs and companies in fields such as children's education and knowledge payment are rushing into the market, showing a clear accelerating trend.

When more middle-aged and elderly people rediscover the dreams of their youth and their inner passion for life is rekindled, the value of life will be realized at a higher level, and the commercial potential of cultural and entertainment education for middle-aged and elderly people will also explode.

Source: AgeClub (ID: AgeClub)