Chinese TV shopping channels a big hit with older consumers

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When Zhang Xiurong first found the CNR Happiness Home Shopping channel on her TV, she called in to buy a cellphone. That was six years ago, when the TV channel had only just begun to broadcast in China, with a lineup of energetic personalities pitching products.

Ms. Zhang was instantly hooked. She kept watching as CNR increased its live broadcast from six hours a day to 17, and she kept buying, too: clothes, a jade bracelet, wine and a German cooking pot – thousands of dollars in total.

"I rarely go shopping. It's so inconvenient," she said. "Once I turn on the TV and find something that's exactly what I need, it just takes one call to bring it to my door. No hassle at all."

China's online shopping craze has built some of the world's biggest edifices of digital commerce. But in the urban compounds and rural villages that house the country's greying population, another retail boom is playing out, this one on television.

From 2007 to 2015, China's TV shopping sales grew at an average pace of 24.5 per cent per year, driven by people like Ms. Zhang, 60, who want nothing to do with the complications of buying online. "People at my age don't dare," she said. Only 4 per cent of buyers on Taobao, the biggest Chinese online mall, are older than 50.

Money spent on TV shopping remains a small fraction of what Chinese shoppers spend online – and Chinese TV shopping channels are dwarfed by their U.S. counterparts. But where U.S. TV shopping sales are falling, they continue to roar in China.

At CNR, which joined forces with American giant QVC International in 2012, sales were up about 30 per cent last year alone, reaching nearly $2-billion (U.S.). In part, that's because every year China is home to more of the people who form its buying group, middle-aged women and men up to the age of 65.

The Chinese Academy of Social Sciences has forecast that by 2030, China will be the greyest country on Earth. Its over-60 population is expected to grow to 240 million in 2020 from 200 million today – an increase of 20 per cent in five years – and crest 300 million 15 years from now.

By 2050, the United Nations predicts that China's median age will reach 48.7.

It's a demographic shift with profound consequences for the way China delivers social services, builds cities and manages the economy.

For companies like CNR, however, "an aging society is actually an opportunity," executive vice-president Yu Feng said. "Old people are already used to watching TV, and it's easy for them to tap into the kind of products we sell."

On Friday, President Xi Jinping called on the Chinese government to support new businesses aimed at the elderly, saying the "old-age business" had bright prospects.

CNR occupies 10 storeys in a television and film production development that sprawls over a city block in the south of Beijing.

On a recent afternoon, its main-floor studio was taken over by Nina Leonard, an American clothing brand once pitched in the United States by fashion designer Lenny Feinberg.

"It enhances the bust and minimizes the waist," an American brand representative said on set as she shows off a long blouse, her smile brilliant in the TV lights. "You can travel all over the world to get our products. But in China you can only get them at CNR."

The Chinese host stepped in. "Order now. Do not leave your home," she said. "No woman can resist the temptation of these beautiful styles."

Several floors above the studio, workers sit at the 260 narrow desks that make up the call centre. On the walls, screens with colourful pie graphs provide live updates of goals and performance.

Today, Nina Leonard is doing well for an afternoon time slot, selling about $20,000 (Canadian) worth of product per half-hour. So the call centre workers have been given 120 seconds to complete each call, down from the normal 180, said Li Yingying, who leads the call centre. They make a sale about 70 per cent of the time – and at peak hours, from 8 to 10 p.m., a good product might sell at a rate of $200,000 an hour.

A surprising number of the callers – nearly a third – are men. They are drawn in by one of the peculiarities of Chinese TV shopping, which is barred from selling only three product categories: medicine, cigarettes and sex toys.

That leaves no restrictions on selling alcohol, which is good news for Deng Jun, 55, who sold men's clothes before retiring. "I have bought imported red wine and baijiu [the potent Chinese white liquor]," he said. "It's a bit addictive. I flip on the shopping channel every day to have a look."

TV shopping has a checkered history in China. A decade ago, regulators shut down hundreds of channels that had suckered unwitting customers into buying all manner of fakes, including medical equipment.

But companies have sought to win back trust by offering quality guarantees and generous return policies. It has worked for Mr. Deng. He has tried Internet shopping, but he feels that TV shopping has "more credibility" – he can, after all, see the person promoting what he wants to buy.

And people like Mr. Deng often struggle to find what they want online. Matthew Crabbe, the director of Asia-Pacific research at market research consultancy Mintel, recently surveyed Chinese Internet sellers for products aimed at an elderly market. He found a fashion shop "with clothing for older ladies" but it targeted only those up to age 40, he said. In Japan, cosmetics companies sell to 50-year-old women. In China, they sell products to fight aging – but have little for those already aged.

In China, most retailers "are still generally ignoring that older demographic," Mr. Crabbe said. "They're still fixated on youth, despite all the evidence that not only are elderly people spending a lot more money on themselves – on holidays, clothes, nicer things – but they also influence their family spending patterns."

Turn on the TV, though, and you can step into a whole world of shopping designed just for older people.

Sometimes they participate, too. CNR occasionally invites its most loyal customers to come on air, which is why Tian Hongqi, 54, was recently waiting for his turn on a show that would feature hair dye, honey, beef and red wine. It was his job to convince the audience that what they saw on TV was real.

"We are members, but we're also customers. We can prove with our eyes that it's real, so people can buy without worries," he said.

A barber by trade, he was particularly excited about the hair dye. "Particularly at our age, we have grey hair. So these are the kinds of products we are interested in," he said.

With a report from Yu Mei