Analysis of the Prospects of Digital Transformation in the Funeral Services Industry and Response Strategies for Traditional Enterprises

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China’s funeral services industry is in a period of profound structural transformation. According to data from the National Bureau of Statistics, China’s death toll reached 10.41 million in 2024, exceeding the number of births for the first time; the proportion of the population aged 60 and above has reached 22%, and it is expected to exceed 400 million by 2035 [1]. However, the industry is characterized by “growing total volume, collapsing structure” — despite the continuous expansion of funeral demand, traditional business models are facing severe challenges.

As an industry leader, Wang Jisheng, President of Fushouyuan International Group, frankly stated: “The funeral industry cannot be called an industry, it can only be regarded as a sector, and it is still in a fragmented development pattern. External speculation puts Fushouyuan’s domestic market share at 2%, but it may not even reach 2%” [2]. This statement reveals the fundamental characteristics of the industry:

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The newly revised Funeral Management Regulations, which came into effect on March 30, 2026, mark a new stage in industry supervision. The core changes of the regulations include:

Policy Dimension	Key Content
Strengthening Public Welfare Attributes	Places “strengthening the public welfare attributes of the funeral industry” as the top legislative objective; newly established funeral service institutions shall be run by the government as non-profit organizations
Transparent Pricing	Separates management of basic and non-basic projects; prohibits charging for items not listed in the price list
Improved Supervision System	Establishes a comprehensive supervision system covering the entire chain of funeral activities
Promotion of Eco-Friendly Burials	Encourages burial methods such as sea burial, tree burial, flower burial, and lawn burial

During the 2025 Qingming Festival, a total of over 54.33 million people were received for on-site memorial ceremonies across the country, and about 66% of people chose green and low-carbon memorial methods; more than 1,500 online memorial platforms across the country served 927,500 people [3].

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Digital technologies are reshaping the form of funeral services from four dimensions:

In January 2022, Fushouyuan took the lead in the industry to launch the digital immersive funeral ceremony space “Digital Memorial Hall”, creating an immersive farewell experience through technologies such as multi-wall projection and ground interaction. It has now expanded to 12 physical locations, covering Shanghai, Chongqing, Jiangsu, Anhui and other provinces and cities, and completed 677 digital ceremonies in 2024, a year-on-year increase of more than 100% [4].

Fushouyuan’s latest version of the “AI Memorial” video service can use large AI models to animate static photos of the deceased, accurately restoring facial expressions, movement details, and even simulating expressions such as smiling and gazing in specific scenarios. Combined with speech synthesis technology and natural language processing, it can generate voice content that matches the deceased’s personality, supporting customized farewell lines or narration of life stories [4].

Blockchain technology is used to encrypt and store the digital images and video content of the deceased, ensuring data ownership and usage security, and avoiding the risk of abuse.

The self-developed Version 4.0 Cemetery Management System of Tianjin Yongan Cemetery Group realizes full-process digitalization from tomb selection to memorial ceremonies. Users can send virtual offerings online through the official WeChat account platform and choose to have physical offerings delivered to their homes [5].

The funeral consumption concepts of the younger generation are undergoing fundamental changes:

Indicator	Post-90s/Post-00s Group	Traditional Concepts
Funeral Expense Budget	62% keep expenses within RMB 15,000	Relatively high traditional expenditure level
Concept of Cemetery	Consider traditional tombs “land-occupying and overpriced”	Deep-rooted concept of “peace in burial”
Preference for Burial Methods	Significantly increased acceptance of eco-friendly burials	Dominated by traditional burials
Consumption Priority	Allocate more expenses to elderly care	Prioritize expenses for posthumous affairs

The proportion of eco-friendly burials reached 11.4% in 2025, and young people are forcing the transformation of the funeral industry through their consumption choices [6].

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The popularity of the “Dead Yet?” App provides a typical case for understanding how internet thinking can enter the funeral-related field:

• Development Cost: Over RMB 1,000 (only server and basic development fees)
• Development Team: Three people, all post-95s, collaborating remotely
• Development Cycle: Less than one month
• Launch Time: Initiated in mid-2025, has been online for half a year
• Profit Status: Achieved profitability within less than one month of launch
• Valuation Expectation: Plans to sell 10% of shares for RMB 1 million, corresponding to a valuation of RMB 10 million [7]

A lightweight safety tool designed for people living alone. Users set emergency contacts and check in daily. If they fail to check in for consecutive days, the system automatically sends an email notification to the emergency contact the next day. The product price was adjusted from the initial RMB 1 to RMB 8 to cover the costs of third-party services such as SMS notifications [8].

Mr. Guo, the founder, believes the app’s viral popularity stems from three points:

1. Entertainment Attribute of the Name
   : The unique naming sparked social media discussions and dissemination
2. Real Social Pain Point
   : The strong demand for personal safety protection among people living alone in first- and second-tier cities
3. Online Dissemination Conditions
   : Developed internet infrastructure provides conditions for fission-style dissemination

Downloads increased by more than 100 times compared to before, and the growth was completely “organic” with no special marketing promotion carried out by the team [7].

The success of the “Dead Yet?” App reveals the applicability of internet thinking in funeral-related fields:

Dimension	Traditional Funeral Enterprises	New Internet Entrants
Startup Cost	Heavy asset (land, facilities, personnel)	Light asset (technology development, cloud services)
User Acquisition	Relies on offline channels and word-of-mouth	Social fission, viral dissemination
Product Iteration	Long cycle, slow response	Rapid iteration, continuous optimization
Marginal Cost	High (service capacity limited by physical constraints)	Low (digital services can be infinitely replicated)

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As an industry leader, Fushouyuan International Group has formed a full-scenario digital life service system, with four core functions including:

• 270° panoramic visual effect, creating an immersive atmosphere through the combination of software and hardware
• Supports professional scene switching for remote memorial ceremonies
• Deeply integrates AI digital human technology to realize intelligent interaction with the deceased’s images and voices

• Animates static photos to restore facial expressions and movement details
• Uses speech synthesis and natural language processing to generate personalized memorial content
• Integrates multi-modal large models to automatically generate coherent memorial storylines

• One-stop after-sales comprehensive service platform
• Integrates functions of digital humanistic memorial halls, life memoirs, and digital ancestral halls
• Currently covers 16 physical locations, with a total of 117,000 registered users and approximately 12,000 online orders completed [4]

• Covers more than 40 cities across the country
• Has recorded 2,475,622 visits and 50,055 registered users
• Has a total of 520,054 memorial halls created, with the number of online memorial ceremonies exceeding that of most physical cemeteries [4]

Based on the work practice of the National Industry-Education Integration Community for Smart Funeral Services, the digital transformation of the industry shows the following trends:

Transformation Field	Specific Measures
Talent Cultivation	Build digital funeral memorial halls and virtual simulation training systems; students need to master cross-disciplinary skills such as video editing and digital resource production
Industry-Education Integration	65 enterprises and 15 institutions across the country participate, providing more than 5,000 internships annually
Service Innovation	The “99 Funeral Service Platform” provides online funeral services and builds an industry-education integration space
Technology Application	Tools such as CAD and digital modeling are used for tombstone design and cemetery planning

Liang Xiaohua, Associate Professor of the Funeral Service College of Changsha Social Work College, pointed out: “Digital memorial halls are gradually replacing traditional memorial halls. In addition to mastering traditional etiquette knowledge, students also need to have cross-disciplinary skills such as video editing and digital resource production, and be able to produce life microfilms and design interactive sessions based on image materials provided by families” [5].

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Facing the impact of internet platforms, traditional funeral enterprises should build competitive barriers from the following dimensions:

• Physical assets (land, facilities) and license resources
• Long-accumulated professional service capabilities and industry experience
• Existing customer base and brand trust
• In-depth cooperative relationships with government departments

• Focus on the mid-to-high-end personalized service market
• Strengthen humanistic care and emotional value
• Leverage the irreplaceability of offline scene experiences

Wang Jisheng, President of Fushouyuan, clearly stated: “The top priority is digital transformation, which also includes the exploration of AI digital human business” [2]. Traditional enterprises should:

1. Digitalization of Infrastructure
   : Establish customer relationship management systems and digital service process platforms
2. Product and Service Innovation
   : Develop differentiated services such as digital memorial halls and AI memorial services
3. Online-Offline Integration
   : Build a closed loop of “online customer acquisition + offline service”
4. Data Asset Accumulation
   : Accumulate user data to support precise services and product iteration

The business model of traditional funeral enterprises is transitioning from a “land economy” to an “emotion economy”:

Traditional Model	Transformation Direction
One-time cemetery sales	Subscription-based continuous memorial services
Standardized service products	Personalized customized services
Dependence on physical space	Parallel operation of physical and digital channels
Regional operation	Online services break through regional restrictions

As stated in Fushouyuan’s strategic vision: “Transform into products and services with 20% physical attributes + 80% spiritual attributes, and use a new digital life memorial system to enable the value, meaning and emotions of life to be inherited for a longer time” [4].

Traditional enterprises can respond to internet competition through the following methods:

• Cooperate with Technology Companies
  : Acquire digital capabilities (e.g., Fushouyuan and the Hong Kong University of Science and Technology jointly established “Lingjing” Company)
• Cooperate with Universities and Research Institutions
  : Participate in industry-education integration communities to obtain talent and technical support
• Cooperate with Peers
  : Wang Jisheng stated, “If any peer seeks assistance in enterprise development, I am very willing to share my experience” [2]
• Cooperate with Platforms
  : Use internet platforms to expand reach, rather than treating them as pure competitors

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1. Continuous Tightening of Supervision
   : The implementation of the Funeral Management Regulations will accelerate the standardization of the industry
2. Accelerated Digital Penetration
   : More traditional enterprises will launch digital transformation projects
3. Increasing Number of New Internet Entrants
   : Products similar to “Dead Yet?” will continue to emerge
4. Increasing Proportion of Eco-Friendly Burials
   : Land-saving eco-friendly burials will become the mainstream choice driven by policies

1. Increased Industry Concentration
   : Leading enterprises will expand market share through mergers and acquisitions
2. Deepened Technology Application
   : Technologies such as AI, digital humans, and the metaverse will be more widely applied in funeral scenarios
3. Service Model Innovation
   : Extend from single funeral services to full-life-cycle memorial services
4. Accelerated Internationalization
   : Chinese funeral service enterprises will begin to expand into international markets

1. Implementation of the “Silicon-Based Life” Concept
   : The deceased will exist in virtual space in digital form
2. Blurred Service Boundaries
   : Funeral services will be deeply integrated with fields such as elderly care and health management
3. Global Integration
   : Services such as cross-border memorial ceremonies and transnational memorials will become possible

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Digital transformation in the funeral services industry is an irresistible trend, but this transformation is not simply “going online” or “moving to the cloud”, but a deep-seated reform involving technological applications, business models, consumption concepts, and even concepts of life and death.

• The impact of internet platforms is both a challenge and an opportunity. Light-asset new entrants cannot replicate the core resources and capabilities of traditional enterprises in a short period of time
• Digital transformation should focus on enhancing rather than replacing existing advantages, using technology as a tool to improve service quality and customer experience
• The key is to find the balance between “physical attributes” and “spiritual attributes”, expanding digital memorial spaces while maintaining physical service capabilities

• The case of the “Dead Yet?” App shows that internet thinking is applicable in funeral-related fields, but attention must be paid to combining it with industry characteristics
• Pure tool-based products are easy to replicate; sustainable value creation requires deeper service precipitation and emotional connection
• The development of the industry requires reverence for life and humanistic services, rather than just pursuing traffic and commercial returns

When death is no longer a business, funeral services will eventually return to their essence — not a profiteering machine that creates anxiety, but a warm harbor that bears the dignity of life. In this transformation, only those who keep pace with the times can survive.

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[1] The Paper - Worsening Aging Cannot Save the Funeral Industry? (https://m.thepaper.cn/newsDetail_forward_31750604)

[2] Phoenix Net Finance - Exclusive Interview with Wang Jisheng, President of Fushouyuan: The Funeral Industry is about “Preservation”, Digital Transformation is Following the Trend (https://finance.ifeng.com/c/8YV0m2A8RRY)

[3] The Paper - The Newly Revised Funeral Management Regulations Announced: What Are the Important Changes? (https://m.thepaper.cn/newsDetail_forward_32347910)

[4] Jiemian News - Four Core Functions, Fushou Online Exceeds 100,000 Users: Fushouyuan’s Exploration of Digital Life Services Achieves Initial Results (https://m.jiemian.com/article/12545579.html)

[5] Hunan Daily - Digital Empowerment for “The Last Journey of Life”: The National Industry-Education Integration Community for Smart Funeral Services Explores New Paths for Talent Cultivation (https://m.voc.com.cn/xhn/news/202511/30958484.html)

[6] The Paper - Worsening Aging Cannot Save the Funeral Industry? (https://m.thepaper.cn/newsDetail_forward_31750604)

[7] Sohu - Founder of “Dead Yet?” APP: Development Cost Over RMB 1,000, Team Consists of Three Post-95s (https://www.sohu.com/a/974782546_121347613)

[8] Eastmoney - “Dead Yet?” APP Downloads Surge, Netizens Argue! Founder: Development Cost Only Over RMB 1,000 (https://finance.eastmoney.com/a/202601113615042459.html)