One of the many elements to the senior care industry I have really come to respect and love is its emphasis on taking care of people and an elevated perspective on human dignity, even during periods of life when keeping these front and center can be easy to lose sight of. For all the market entry strategy work and studies on what Chinese consumers want and are willing to pay for, it can be easy to overlook the many elderly Chinese who will not be able to afford senior care. Most of these families hope the Chinese government will step up and offer the necessary services; however, as Zhanlian Feng has pointed out in his research, the market in China is so vast and the need so great, the government alone is unlikely to be able to meet all the need. A healthy non-profit sector will also need to emerge. The operational insights western operators have to offer a Chinese non-profit are no less critical than they would be with a for-profit partner. Obviously the difficulties American and European senior care companies are having monetizing their operating expertise in China does not get any easier if your potential partner is a non-profit. At a minimum understanding what the non-profit sector in China is doing, and how their care model is evolving is worth following given the lessons it provides for western operators in the higher-income market segment.
For the last several months, I have had the pleasure of learning more about a non-profit in Chengdu that I believe is worth understanding in more detail as an insight into how the non-profit senior care sector in China is developing. Led by Yuan Xiao Yuan (Wendy), a former P&G executive in Guangzhou and a management team member with the Golden Sunset Nursing Home, the Western Elderly Nursing Association of Chengdu (WENO) was founded in 2009. Since then, WENO has opened its first community assisted living home. WENO takes care of those unable to access government services or pay for private care themselves, as well as those seniors who were displaced after the 2008 earthquake. WENO generates much of its funding through what we might think of corporate philanthropy. One of their major corporate sponsors is INTEL who has a major chip manufacturing plant in the area, employing well over 3,000 people.
Over the course of the next year, WENO plans to open a day care facility and expand into independent living with attached rehabilitation nursing 
centers. Grants from the China Foundation for Poverty Alleviation have already provided the resources to train a total of 200 senior care workers, and the British Embassy provided a grant to allow WENO to learn more about the UK approach to community care centers. Looking at this from the point of view of industry, what can we take away from this? First, keeping tabs on an organization like WENO allows us to understand how China is trying to solve its aging problem. Yes, their approach – in particular given this group is serving the under-privileged – may seem to not be worth following given limited bandwidth you have as a management team to follow all that is happening in the sector. But, as they say, “necessity is the mother of all invention,” and WENO has all kinds of necessity! What a group like WENO does show is how someone with limited resources solves questions about fostering community, making people feel valuable, greeting aging Chinese where they are with all the cultural factors brought to bear by those who know the culture best. Second, be careful downplaying the opportunity for non-profit organizations like WENO to figure out how to deploy senior care cost effectively, and then branch into the for-profit middle-income market segment. This would not be the first time a Chinese entity started out on the low end of the spectrum, foreign firms started out on the high end, only to find that the Chinese firm was able to move to the lucrative middle market segment faster and more efficiently than their foreign counterparts. This precise market dynamic has happened in retail, in consumer goods, in financial services and will likely happen in senior care as well. Third, finding a non-profit partner in China might be an easy way to get a local management team built up for your business, even if all you are able to do is extract a nominal management fee. Talent development is a major issue for our industry, and being able to seed your management team by some sort of partnership with a non-profit might be an easy way to find and train talent.
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