For our monthly insights digest
If the world did not already know, COVID-19 has restated the challenges of an aging population. Early data from the pandemic showed that elderly citizens, especially those with underlying health conditions, are especially at risk to the coronavirus.
Although the world is still battling COVID-19, the pandemic will force governments, healthcare and financial services providers, brands, retailers and educators to rethink the provision of products, services, work and leisure activities for senior residents.
In Asia, demographic structures are changing especially fast. Larger elderly cohorts will require a balancing of medical and social care and financial support with initiatives to promote social inclusion and help pensioners contribute to society.
Japan is often cited as a benchmark of an aging population. In March 2020, nearly 29 percent of its almost 126 million population was over 65. But it is not alone. Across Asia, people are living longer and fertility rates are falling.
In Singapore, 60 percent of the workforce is now aged 40 or above. South Korea, Hong Kong, Indonesia, Thailand and Vietnam are also preparing for greying demographics. The world’s two largest populations, China and India, are forecast to peak by 2050 with steep declines thereafter.
Here are five key factors for business leaders to consider as Asia confronts long-term socioeconomic shifts.
For many years, Japan’s government has invested heavily to research the array of challenges its society will face as the population matures. It has incentivized firms and entrepreneurs to undertake ground-breaking technological, transportation and consumer product research. Healthcare, including medical devices, pharmaceuticals and consumer health, is a critical area of focus.
By pushing the boundaries of medical science and technologies like artificial intelligence, robotics and wearable devices, Japan is seeking solutions to treat and alleviate the symptoms of varied forms of illness and incapacity. For example, a new lightweight robotics suit is equipped with “electric muscles” powered by tiny motors to boost a patient’s physical power and intelligent care robots can anticipate bedside needs.
With more people living longer, the range of later life medical challenges will diversify. Medical products makers will invest considerable resources to better balance advanced technology and healthcare delivery not just in hospitals and care homes, but also in people’s own homes and via virtual telemedicine platforms.
“What will elderly people spend their money on?” Traditionally, this was relatively easy to answer. Essential purchases such as food, housing and medicines were prioritized. Local transport is often subsidized, while home appliances need replacing from time to time. Family gifts, dining out and small luxuries to enjoy at home also contribute to discretionary spending.
But shifts may occur. For example, more products are available to rent or share ownership, rather than buy outright. In Asia, and worldwide, retired people have been prolific overseas travelers. COVID-19 may impact this, not just through a fear of flying or contracting the virus, but because of higher travel insurance premiums and, probably, flight tickets. This may create new opportunities to innovate in senior travel products and retail services aimed at older consumers in domestic environments.
Companies must be agile and alert to prepare for changes in consumer demand and spending patterns. The rise of the “silver society” will impact the entire value chain, from product research to production, marketing, distribution and after-sales service.
In general, older Asian consumers were less engaged with eCommerce and digital payments than Gen Z and Millennials. Throughout their lives, shopping has been partly a social experience for many retirees. Making physical contact with products and bartering on the price before buying was a part of the process.
COVID-19 lockdowns have evoked a mindset shift. Consumers of all ages turned to safety and security, rather than time-saving convenience, of shopping via smart devices. This may endure now that older consumers have become used to swiping to buy. Other home-based consumption trends may also evolve. Online gaming services targeting retirees are emerging in some markets as streaming platform iQiyi released a video app with content curated especially for the senior generation.
People in their advanced years who spend more time at home will demand a greater range of consumer choices. For example, travel agents in China are seeing fewer seniors travel with their families during the school holidays, and therefore seeking alternative ways to consume, relax and travel vicariously at home.
Staying physically and mentally agile is just a part of the package for active seniors in some Asian markets. Delaying the physical signs of aging enables those who can afford it to enjoy a boost in social confidence and self-esteem.
Advances in medical aesthetics are not only targeted at youthful TV stars and influencers and socialites. More affluent middle-aged and senior citizens are utilizing non-surgical body treatments and intimate wellness to look and feel a little younger. Dentists are noticing an uptake in cosmetic treatments and teeth whitening among older clients, while sales of hair dyes and hair care products are proving ageless.
Elderly consumers are looking far beyond vitamin supplements and pharmaceuticals. Aesthetic treatment brands are curating campaigns for older generations, while diligent dietary care may increase demand for natural foods. Staying active for longer means designers of aerobic gear and athletic equipment are creating bespoke lines for advanced year fitness fans.
Japan has been rolling out social policies to support its elderly citizens and help them lead active, meaningful lives. Meanwhile, Vietnam will begin a phased increase of the retirement age in 2021 to mitigate the impacts of an aging population and enable citizens to stay economically active for longer. From Japan to the Philippines, companies are being encouraged to employ retirees in part-time roles.
Living life to the full in later years is creating another discernible trend. Senior key opinion leaders are gaining fame on social media and older ad models are appearing in campaigns targeting like-minded consumers. For example, a Japanese grandfather gained Instagram celebrity for modeling fashions against ordinary daily backdrops and a Vietnamese woman hosts a popular YouTube vlog depicting rural family life.
Work-life balance is not a concept widely applied to the retiree generation, but that may change. As the working life age is extended and people seek to earn a supplementary income after retiring, the marketing and positioning of products they consume will transform.