Japan’s Aging Trends Provide Marketers with Stable, Large-scale Opportunities for Years to Come
By: Debbie Howard
One of the most important and far-ranging areas to consider when marketing any product or service in Japan is the sheer power represented by the huge and growing demographic of its aging society.
For example, in addition to the 28 million consumers who are already aged 65 or older, there are 7 million “dankai generation” members who began turning 60 in 2007 and will all be aged 65 or older by 2014. The dankai group has been estimated to hold combined financial assets of 130 trillion yen (US$ 125 billion), or 10% of total individual financial assets.
Meanwhile, another important older group recently receiving attention recently is the “arafifs” (those aged from 47 to 52, or “around 50”), representing 9 million consumers. And right on this group’s heels are the “arafos” (primarily females aged 35–44, or “around 40”), representing approximately 1.3 million people).
It is important to note that sandwiched just between the arafifs and the dankai generation is a group that is currently aged 54 to 59 — a heretofore unnamed group representing some 4.5 million consumers who will begin reaching the age of 65 by 2020. Let’s just call them “arasix,” so as to distinguish them from the dankai generation.
Looking at the oldest three of these “sub-segments” of the aging society (i.e., silvers, dankai and arasix), it is easy to see the sheer size and duration of the aging society trend in Japan. And of course, there is a correspondingly large opportunity for marketers of virtually every product and service category imaginable.
Based on available consumption and disposable income data, we know that those in older age groups — beginning in the mid-fifties — raise their consumption levels considerably compared to their earlier years, and continue to spend at a much higher level throughout retirement.
We also know that even into retirement and beyond, the three older segments — silvers, dankai and arasix — will continue to have sizeable financial assets per household, demonstrating their value as affluent consumers.
Next, looking at the change in total financial assets over time, we can see the amount of total financial assets held by silvers starts at a sizeable amount in 2009, and then steadily increases as other segments become silvers. For example, in the year 2014, when all dankai will be aged 65 or more, total silvers financial assets will be some 450 trillion yen. And in 2020, this figure will rise again to over 500 trillion yen, as all three segments will have begun to merge.
It is also interesting to look at the percentage of younger and active seniors included in the silvers group. Once the dankai merge with the silvers in 2014, they will make up nearly 20% of all silvers. But by 2020, dankai and arasix will make up over 40% of the silvers group — and that percentage will continue to increase over the next 5 years as the remaining arasix become 65.
This is significant because dankai and those that follow them are distinct from older generations in that they are more active, spend more on personal interests, and are more open-minded to foreign products. Looking at silvers with a more careful magnifying glass trained on these sub-segments will allow companies to more carefully hone their marketing strategies with not only products and services, but also with communications.
Debbie Howard is Chairman of CarterJMRN and President Emeritus of the American Chamber of Commerce in Japan.
Originally Published in Nikkei Weekly, 11th May2009
CarterJMRN is a strategic market research agency that has been helping clients with consumers and businesses in Japan and beyond since 1989.
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