HOW TO SUCCEED WITH WELFARE EXPORT TO CHINA?

Lisa Lin Halskov

First question – Why China?

Process reaction of Danish companies going to China

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Attractive Overwhelming

Struggling …

Content

• Welfare Sector opportunities in China

• Will Chinese in fact pay what it cost?

• Challenges

• Reference case – Aalborg Care Consortium

Welfare Sector opportunities in China

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China's demographics are significantly changing Longer life and power of the one-child policy

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Source: Global AgeWatch index 2014

100 million more elderly in 2025

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Young Chinese are under extreme stress Unbearable for many couples in their 30s

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0-15 year

30-40

50-65

Care plan from the authorities (2025)

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3% on

nursing

home

8,4 mio. pers.

7% on

Care station/

Day care center

19,7 mio. pers.

90%

Care at home

254 mio. pers.

• There must be 30 nursing home beds per 1,000 elderly (over 60)

• Planned capacity by 2025 is 8.4 million beds in nursing homes (2011-level was 2 million beds)

• There are approximately 1 million carers (2011), where only 10% are professionally trained, demand is 10 million

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Subsidies per bed in

nursing home

No tax as operator

Free land development

Fast project approval

Free cable installation

Lower electricity, water, gas

prices

Lower land price

Support schemes from the local Chinese government

Will Chinese in fact pay what it cost?

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Consultancy and knowledge is difficult to sell. Physical product which can see and touch, with a

bit of technology and a good design will have a good chance.

For example, assistive equipment for supporting daily living at home.

Chinese consultancy in nursing industry

Bao mu’s salary has been increased triple for the last two years. I hope

there is a technology like robot can replace Bao mu

Home care customer / middle to

high income family

A technology can be used also for other family members. Medical supply importer

I have seen many Danish welfare technologies

which design for improving live quality of

elders and care giver condition , the meaning

is very good and inspirational. We will try to source similar Chinese welfare product for our

nursing home, the Danish products are too expensive, in case there

is a problem with the product, we are not sure where to find the service.

CEO of Chinese nursing home

operator

Danish welfare products have good quality and

guarantee for 10 – 15 years. But in China, we don’t need such a long time guarantee, 3-5 years guarantee is good

enough.For example, a good lift system or a wheel chair, you don’t expect to

pass on for next generation.

Medical chain supplier

What do Chinese say about Danish welfare product?

Source: McKinsey Global Institute China Consumer Saving Behavior Survey

China's savings population - precautionary savings

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Challenges

Chinese‘s needs and expectations?

We look at Chinese with Danish eyes A big culture challenge

Challenge 1 - Mentality and behavior difference

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Think it their way & Go behind the words

Personal visits to the best nursing homes in China

• Guangzhou Youhao Nursing Home & Hospital Project

• Chengdu Sunset Nursing Home

• Hebei Yanda Golden Age

• Chengdu No. 2 Social Welfarecenter

• Chongqing Medical University,Qinggang

• Relevant authorities

Often real estate project more than nursing home

Low-grade material, and designs reminiscent of hospitals

Sporadic training, personnel coming without education

Designed as hospitals, Chongqing Medical University Nursing Home Project, Qinggang

Youhao nursing hospital project, Guangzhou

19 Good facilities can be founds in some good nursing homes, even in Church.

Mega- project in Hebei, Yanda Medical City

Challenge 2 : Language barrier

Lost in meeting and conversation

= Lost opportunities

Challenge 3 : Afraid of being copied

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RMB 678/pc RMB 1257/pc RMB 14/pc

Copy products search from Taobao website

Case study

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AACC offers a one-stop shop to a Chinese client who is interested to enter senior living industry

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Jinan Hot Spring and Senior Living Project

Our tasks

• Set a benchmark for building Danish inspired senior living home

• Investigate the needs of local elders

• Overall planning, design of physical building and affiliated service

• Design business model

• Provide care service and run care operation

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What is missing from AACC solution?

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AACC Consultancy

Care operation

team

Welfare technology providers

Senior living

One-stop shop is in demand

“One dragon Service” is what Chinese want in the eldercare industry. They want solutions, not simply products and service. Each consortium player has different contributions to the solution.

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一条龙服务

• Solution build on extensive knowledge used to configure the right solution for customers and are

difficult to copy.

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• Focused on delivering complete solutions

TO SUCCESS

What we have learned from our process

• Keep distance short - Communication efficiency and accurate

• Always follow up

• Customer service

• Being in the same boat – need to help them to solve their problem first

• Be flexible and adapt quickly

• Pass on and share information among the consortium

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No short cut No cheap and simple

CHINA

GERMANY

China is not for everyone!

You Dare or You Don’t

Thank you

Lisa Lin Halskov Innovation Consultant Copenhagen Living Lab