Chinese elderly love the internet, but why hasn't any vertical app succeeded?

Silver-haired entertainment is the second most popular internet application area for the elderly, following e-commerce. Vertical apps, WeChat public accounts, mini-programs, and silver-haired influencers on Douyin and Kuaishou have emerged one after another over the past decade.

In 2015, a batch of apps focusing on the elderly began to appear, such as Tangdou, which focuses on square dancing, Meipian, which emphasizes graphic editing, and Caishi, which specializes in video editing, all of which were born in that year and subsequently received tens of millions to over a hundred million yuan in investments from well-known VCs and leading internet platforms.

In 2016, a large number of public accounts targeting elderly content emerged, with the most common themes being pension increases, health and wellness, loneliness among single elderly individuals, societal biases against the elderly, and stories of leaders and celebrities. These contents filled the leisure time of the rapidly increasing silver-haired internet users at a time when the mainstream internet focus was on young people in 2016. Elderly individuals actively shared and forwarded these articles, leading to a surge of 100,000+ viral articles and a matrix of public accounts with millions of followers.

In 2017, with the launch of WeChat mini-programs, some apps and public accounts transitioned to mini-programs, focusing on features such as photo albums, mini-games, novels, and short videos, quickly attracting a large number of silver-haired users.

By 2019, the growth of young users on Douyin and Kuaishou began to slow, while the proportion of silver-haired users started to rise rapidly. A group of unique and open-minded elderly individuals began to explore on their own or with the help of MCNs to become silver-haired influencers, creating various funny skits and outfit change videos. Their follower counts surged rapidly, with some silver-haired influencers amassing three to five million followers and establishing a presence on short video platforms.

The following will analyze the experiences and lessons of silver-haired entertainment on the internet from three aspects: functional needs, traffic dividends, and commercial monetization.

1. Refine specific functional needs to lock in highly engaged silver-haired users

The most well-known apps in the silver-haired internet sector initially targeted a strong demand in a specific area for the elderly. For example, Tangdou focuses on video, learning, and communication for square dancing; Meipian emphasizes an easy-to-use mobile graphic editing tool; and Caishi focuses on the shooting, editing, and sharing of short videos.

The more rigid and sticky the targeted demand is, and the better the product functions meet this demand, the less likely the initial silver-haired users are to easily churn, thus becoming seed users that play a key role in the next stage of development.

Of course, for individual projects to succeed, they cannot merely satisfy the functions that others have, as there will be many similar competitors in every track. This is true for square dancing, graphic tools, audio-visual albums, and various emerging tracks. However, most silver-haired internet projects are similar, simply replicating existing functional modules, enlarging icons and fonts, which do not leave a deep impression on the silver-haired demographic, ultimately leading to a fate of being used and discarded.

The aforementioned projects do indeed have distinctive product features. For instance, Tangdou developed a green screen feature to help square dance KOLs create cool videos from the perspective of the elderly, allowing dancers to be placed in various preset backgrounds such as parks, squares, and mountains, and even enabling the duplication of a single dancer into three, five, or even seven or eight, presenting a group dance effect on screen. This feature was launched at least in 2019, while mainstream video apps only introduced similar features years later For example, Meipian has designed a material library that provides high-definition images, high-definition videos, and music to facilitate content creation for the elderly, and has made this a paid membership feature. In contrast, WeChat public accounts, despite years of development and significant influence, only offer editing functions in the backend, while creators still need to source image materials themselves.

These innovative features reflect a deep insight into the elderly demographic, which determines whether the product is user-friendly, whether it truly addresses the pain points of the elderly, whether it can establish a unique user mindset among the elderly, whether the elderly will use it and then discard it or will want to stay, and whether it can stand out among a plethora of homogeneous products and reach the next decisive point.

II. Seizing the Traffic Dividend and Taking Off

The rise of a batch of public accounts focused on elderly content after 2016 can be largely attributed to the role of the traffic dividend.

Before every elderly person in China had a smartphone, their main channels for receiving information were television, newspapers, and magazines, with the primary sources being official media. However, as the penetration rate of smartphones among the elderly increased and reached a critical point in 2016, many elderly people began to migrate away from traditional media platforms, developing a growing thirst for internet content. At this time, mainstream internet platforms were still focusing on young people, resulting in a significant lack of content for the elderly.

A group of keen content entrepreneurs then shifted their focus to the elderly demographic, concentrating on themes that easily resonate with them, such as pension increases, health and wellness, the loneliness of single elderly individuals, societal biases against the elderly, and stories of leaders and celebrities. They did not need to create original content; by simply integrating and editing materials from across the internet, they could continuously produce viral articles that the elderly would eagerly share.

Moreover, a single public account clearly could not capture all the elderly traffic. By establishing dozens or even hundreds of public accounts to form a matrix and direct traffic among them, organizing exclusive reader communities for these accounts, and encouraging elderly members to share and forward content to their own groups and social circles, further viral growth could be achieved.

These contents inherently possess a high potential for virality, and when combined with the fact that many elderly individuals have ample free time, wish to demonstrate their presence through sharing, and indirectly "hint" to their children to care about them, it ultimately leads to exponential dissemination. Additionally, at that time, the cost of traffic on WeChat was very low, making it very cost-effective to invest in purchasing fans, resulting in many public accounts gaining hundreds of thousands or even millions of followers in just a few months.

The rise of mini-programs after 2017 exemplifies the successful capture of the elderly traffic dividend. For instance, the app Xiaoniangao, which focuses on audio-visual albums and short videos, was initially launched in 2014 but remained lukewarm. In January 2017, WeChat mini-programs were introduced, and by the end of May that year, Xiaoniangao launched its mini-program, binding it to its public account and enabling seamless traffic flow between the two, rapidly expanding its user base. Within a month, Xiaoniangao's user count surged from 10 million to 20 million. By 2019, the number of middle-aged and elderly users of Xiaoniangao had reached 110 million, accounting for over 80% of its total user base There are many similar mini-programs. According to the TOP 100 mini-program list released by Aladdin Research Institute, starting from August 2017, Xiao Niangao and Kawa Electronic Album entered the list, followed by other graphic production mini-programs like Meipian. From the second half of 2018 to 2019, many imitators and traffic players entered the market, and the mini-program rankings published by Aladdin often featured unknown companies taking turns to appear.

The operation of these mini-programs is very simple; album-type mini-programs can directly change templates with one click. The templates change with holidays and time, and during holiday periods, these album-type mini-programs become instantly popular, bringing in a large amount of traffic.

Starting in 2019, driven by the rapidly rising short video platforms Douyin and Kuaishou, traffic players shifted to the short video field, and various short video mini-programs began to emerge in concentration from 2019. The content of these mini-programs mostly comes from various video platforms, with some videos still bearing watermarks from Tencent, Xigua, and Huoshan. Moreover, these new entrants laid out a large number of mini-programs and public account matrices with the same themes and content, with the simple and direct goal of maximizing traffic to prepare for the next step of monetization.

In the development process of the aforementioned vertical apps, traffic dividends also played an important role, but the scene occurred in the mobile application market, and the time window was relatively short. Industry insiders revealed that from 2015 to 2017, advertising placements for square dance apps in the application market had customer acquisition costs of only 1.5 to 2 yuan, which supported the rapid growth of a few leading square dance apps and led to significant financing. However, as the advertising costs in the application market gradually increased, this model became unsustainable, and user growth began to stagnate, further exacerbated by the siphoning effect of Douyin and Kuaishou, resulting in significant user loss.

III. Where is the monetization path?

Monetization is the third hurdle that the silver-haired entertainment sector must pass after going through the product and traffic stages. Let's take a look at the monetization paths that silver-haired entertainment has traversed and how they have performed.

Advertising

The traffic-oriented silver-haired entertainment projects mentioned above generally have very small company sizes, with teams consisting of only a few people. However, because they control a large amount of elderly traffic, they can achieve net profits of hundreds of thousands of yuan per month through advertising monetization at peak times. The key to the success of this model lies in two factors: first, the traffic cost must be very low, and second, there must be a continuous stream of advertisers willing to pay high advertising fees.

However, advertisers who have the ability and willingness to pay high advertising fees are a scarce resource, and there are often unregulated health products, cosmetics, and even scam groups hidden among them, posing significant legal risks for silver-haired entertainment projects. Therefore, once traffic costs rise or platform regulations tighten, it becomes very difficult for this model to sustain.

Representative apps like Tangdou and Meipian claim to have over 100 million users, with Tangdou reporting over 200 million middle-aged and elderly users in 2020, and users aged 55 and above accounting for over 50%. Meipian reported over 120 million registered users in 2019, with over 65% being middle-aged and elderly users. However, they have not disclosed any data on advertising revenue, leading to speculation that these figures may not be as impressive as imagined Knowledge Payment / Membership Rights

Meipian launched a memoir for the elderly priced from 29.9 yuan per book in 2019. According to official claims, during the Double 11 shopping festival in 2019, it reached 6,000 orders per day, with transaction volume exceeding one million.

Caishi's revenue figures are also not publicly available, but media reports indicate that membership rights can account for 50%, with paid users in the hundreds of thousands, including two plans priced at 68 yuan for 3 months and 198 yuan per year. Benefits include membership identification, video production privileges, social function privileges, and more.

Anchor Rewards

Multiple apps have successively launched video live streaming and anchor rewards. It is understood that Caishi's live streaming revenue share can account for 50% during peak periods, with active users spending around fifty to sixty yuan per month. Meipian once revealed that the monthly reward flow across the entire platform reached tens of millions in 2018.

However, there are not many knowledge anchors and grassroots anchors specifically targeting the elderly demographic; instead, income contributions from attractive anchors are significantly higher. This seems more like a mature anchor team that, after penetrating the youth platform, chooses a new, untapped elderly platform to continue making money.

Travel and Living

Travel and living have been relatively successful among various monetization methods in the elderly entertainment sector. In 2019, before the pandemic, several public accounts with millions of followers were able to generate travel and living income in the tens of millions. Additionally, a retirement living platform located in Shanghai, operating through television programs, public accounts, live streaming, senior newspapers, and offline activities, reportedly has over one million elderly members, with travel income reaching several hundred million yuan in 2019.

How to Open Up Monetization Paths

The above analysis is sufficient to illustrate that most monetization methods in elderly entertainment have not yet been successfully implemented. Models like travel and living, which have been validated, have also faced setbacks due to the pandemic in the past few years and will require some time to recover.

The difficulty in monetizing elderly entertainment can be explained by a simplified equation: monetization income equals user scale multiplied by average user income. Generally, a super-large user scale matched with low average user income or a medium-low user scale matched with high average user income can both achieve ideal revenue. The former represents internet advertising that takes a small cut, while the latter represents heavily monetized games.

Coincidentally, in the past decade of development, elderly entertainment projects have often matched medium-low user scales with medium-low average user income, which is unrelated to the two situations mentioned above, resulting in naturally low monetization income.

In terms of user scale, elderly entertainment projects, after experiencing high user growth from initial traffic dividends, will soon be squeezed by similar competitors and emerging platforms, making it easy for user growth to slow down and lead to significant losses.

As mentioned earlier, Tangdou had over 200 million elderly users in 2020, but the number of monthly active users with actual commercial monetization value is certainly significantly lower than the total user count. Moreover, after facing competition from short video rivals like Douyin, Kuaishou, and WeChat Video Accounts, this number will undoubtedly decrease further.

According to QuestMobile data, in August 2022, Tangdou's monthly active users among the elderly population were only 3.118 million. This figure is significantly lower than the monthly active user scale of leading short video platform square dance KOLs during the same period. According to QuestMobile, in August 2022, the monthly active user scale of elderly users among typical square dance KOLs, such as "Xiao Shuai Fitness Square Dance." With 9.467 million, "Huazhou Min'er Square Dance" has 7.264 million, and several other KOLs have monthly active users between 3 million and 4 million.

The video production platform Caishi is also facing strong competition from new rivals. According to QuestMobile, in August 2022, Caishi ranked fifth in the monthly active user scale among video tool apps for the elderly demographic, with only 580,000 monthly active users, while the top-ranked app is Jianying, launched in 2019 by Douyin, with a staggering 8.48 million monthly active users.

Although there is a large number of public accounts and influencers focused on the elderly demographic on WeChat, Douyin, and Kuaishou, most of their follower counts are concentrated in the range of three to five million, lacking competitive advantage against major accounts with tens of millions of followers that compete for advertising revenue. If they choose to engage in live commerce, their professionalism pales in comparison to major beauty and fashion accounts, which can achieve annual sales of over 100 million with just a million followers, relying not only on follower count but also on mastery of product design and supply chains.

Regarding average user income, as previously outlined, in most cases, elderly paid users can contribute income ranging from tens to a couple of hundred yuan for online services, and the proportion of paid users among the entire elderly user base is not high.

The reason online revenue is not increasing is that most apps, public accounts, mini-programs, Douyin accounts, and Kuaishou accounts primarily focus on content creation and dissemination, lacking deep offline interaction with elderly users. Elderly users tend to leave after viewing content, and there is a lack of emotional connection and trust between the two parties, making it impossible to form strong stickiness and sustainable monetization capabilities.

Therefore, for elderly entertainment projects to successfully establish a monetization model, there are essentially two paths: one is to expand the user base, initially relying on traffic and content dividends to accumulate a large number of elderly users, and then decisively and swiftly target all age groups, especially the middle-aged and young populations, similar to how Bilibili and Xiaohongshu initially focused on post-90s young users and then quickly expanded to include post-80s and even post-70s users, earning advertising revenue through a massive user base.

The other path is to deepen user trust, initially accumulating a large number of elderly users online, and then decisively strengthening offline operations, driving both online and offline efforts to deepen the elderly users' trust in the platform, and then monetizing through high-ticket products.

In fact, the only situation that can elevate average user income to thousands or even tens of thousands of yuan, without relying on illegal health products or financial fraud, currently appears to be providing travel and residency services for the elderly, which is likely to become the mainstream monetization method for elderly entertainment in the future