By: Debbie Howard
It’s no secret that there are a number of pressures forcing needed debate in Japan regarding further needed change. Not the least of these is the “rapid aging of Japan” — the most accelerated among all developed countries.
As has been widely reported, the government forecasts that by the year 2025, about 30% of Japan’s population will be aged over 65 — that’s compared to 20% right now. For the sake of comparison, in the United States, which is suffering from an aging phenomenon itself, only 20% of the population will be aged over 65 in the year 2025 (compared to 12% right now).
The demographic tidal wave that has made Japan the most aged society in the world is already straining social systems such as pensions and healthcare, and represents a foundational shift affecting the overall economic and social fabric. It has also placed Japan center stage as other countries watch carefully to see just how Japan grapples with it.
The lack of infrastructure to deal with the increasing numbers of elderly (i.e., in nursing homes and with at-home care, to name just two areas) is frightening considering the numbers. However, this situation is creating an emergence of new businesses, such as at-home nursing care services, home delivery of catering and neighborhood day care for the elderly. It is also feeding the growth of already existing businesses, including nursing homes, funeral services, and so on.
But I always like to point out that the aging of Japan is not just about “wheelchairs, canes and crutches” . . . nor those aged over 65. As in the U.S., the growing number of those aged 50 to 65 also represents terrific potential for marketing everything from financial and investment products to preventative health and nutritional products to hobby-related sports and travel — practically any product or service imaginable.
The so-called “Dankai Generation,” typically defined as those born during Japan’s first baby boom from 1947 and 1949, began retiring in large numbers in 2007 and are expected to spur consumption in markets such as health care, travel and home reforms. This demographic segment represents nearly 7 million consumers or 5.4% of the total Japanese population, evenly divided between males and females. They are expected to receive approximately 50–60 trillion yen in retirement allowances, and their collective financial assets are estimated to rise to 174.9 trillion yen by 2009.
Quite different from previous generations in their thinking, many plan to continue working after 60 years old, either at their current company or in a different job, or even in their own entrepreneurial enterprise. Also unlike past generations, this generation represents individualistic consumers with greatly varying needs. Products and services marketed toward “older people” as a group have not found traction. Perhaps most importantly, many want to use their money before they pass on.
Finding the right tone for communicating with Japan’s aged regarding products and services that fulfill their needs will be a growing challenge, but one that should be well worth the effort.
Debbie Howard is Chairman of CarterJMRN and President Emeritus of the American Chamber of Commerce in Japan.
Originally Published in Nikkei Weekly, 4th February 2008
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