Ageing and Generations | Japan Market Entry

Japan’s Seniors’ Market: Deeper Look Reveals Ample Opportunities

The so-called “seniors’” market continues to inspire innovative products and services that materialize in ways which far surpass the common theme of robotic solutions for nursing shortages. CarterJMRN has been following these trends for over two decades now; a few key facts show how the sheer size and longevity of this market segment is inspiring a variety of industries to explore ways to nurture this loyal customer base for years to come.

It’s not just about “wheelchairs, canes and crutches”

We reported in 2008 that 20% of Japan’s population was aged over 65, with estimates for 30% by 2025. By 2017, that number had already increased to 27.7%, confirming we are well on our way to meeting, and perhaps exceeding, the government’s earlier projection.

Our position has always been that this increasing percentage of over 65-year-olds in Japan represents unlimited potential for marketing practically any product or service imaginable.

In part, that’s because Japanese seniors aren’t just living longer lives; they’re living healthier lives, too. Japan has the highest life expectancy of any country (80.1 years for men and 86.4 years for women), but it also holds the record in terms of healthy adult life expectancy (in 2016, 72.6 years for men and 76.9 years for women, according to WHO). This distinction is important: life expectancy (LE) means living longer inclusive of disabilities and/or poor health. Healthy adult life expectancy (HALE) means exactly what it says – a longer, active, healthy life.

Seniors are contributing an important share of consumer spending

Savvy companies know that Japanese seniors are much more than a projected burden on society. Based on available consumption and disposable income data, we know that those in older age groups raise their consumption levels considerably compared to their earlier years, and continue to spend at a much higher level throughout retirement. By exploring the richness and diversity of Japan’s dynamic senior market, businesses can gain deeper insights for creating innovative opportunities that both increase revenues and expand a loyal customer base for years to come.

The wealthiest consumers in Japan turn 70 this year, and they’re very different consumers than their parents.

The “Dankai Generation,” born during Japan’s first baby boom (1947-1949), began retiring in large numbers in 2007 (with the eldest turning 70 this year). This generation is particularly interesting because they entered the workforce at a time that represents Japan’s years of high economic growth (1962-1971). As a result, the “Dankai” have ended up being much more affluent than their parents.

The Dankai (and the age groups between 50-65 that follow them) are distinct from their elders in that they have more leisure time, more money and avid interests. They are more active and spend more on personal interests and convenience; they’re also more open-minded to foreign products. The longer-living, healthy seniors of today are more inclined to enjoy outdoor activities such as hiking, golf, and gardening. Their interest in fitness, hobbies and personal development translates to gear, clothing and accessories. They go to concerts, attend events and frequent restaurants. And they travel.

Japan’s senior market represents a spectrum rather than a segment

Japan’s older consumers make up a vast group that is both multifaceted and dynamic. To put it simply, 70-years-olds are not the same as 85-year-olds. Needs and behavior change greatly with aging in terms of mobility and frailty, efforts to maintain youthfulness and easing isolation. Companies that work to understand the nuances presented by different types of older consumers will be able to position themselves to meet the increasing needs and wants of these older consumers, regardless of stage.

There is more to the seniors’ market than just “kaigo robotto”

Assistive technology such as kaigo robotto (care robot) is quite prominent in the media and is often cited as both a vital need for aging Japan and a market that will help restore the national economy. Other healthcare-related solutions abound, with everything from digital wearables (for both individuals and those who care for them), to monitoring and analysis devices for incontinence, to telemedicine. But the older Japanese consumer base represents much more than a market segment for care assisting technology.

Reimagining markets for the older consumer

The wide range of healthcare-related products and services that are relevant to seniors (i.e., health supplements; pharmaceuticals; mobility, hearing and visual aids; etc.) represent only part of the dynamic senior market. The truth is that ALL sorts of businesses are finding new ways of approaching seniors with relevant “non-healthcare-related” offers.

For example, Aeon has renovated outlets across the country to offer earlier opening hours and services that encourage asatomo (morning friend get-togethers) designed to enhance both the social and fitness needs of older adults, including exercise spaces with a 180-meter walking track. By 2017 the retailer reported a 10% increase in the number of visitors and is planning another 100 outlets focused on older consumers by 2025.

Japanese seniors have also shown an increasing demand for luxury travel and spa resorts – both domestic and international. Maritime shipper Nippon Yusen recently announced its order of a second luxury cruise ship to be ready by 2020. Meanwhile, both East Japan Railway and West Japan Railway introduced luxury sleeper trains in 2017 that are difficult to book despite their high cost.

Convenience stores have been quickly adapting themselves into service centers in their micro-communities, offering everything from dine-in counters to bill payment and package delivery, and the ratio of older customers has expanded. In Kansai, several major convenience store operators are experimenting with stores located in semi-public housing developments. In addition to providing easy access to food and daily necessities, these stores are experimenting with new ways to appeal to the older customer base – by adding areas for relaxing and even entertainment such as karaoke.

Benry Corporation offers handyman services; Rakuten’s O-Net offers senior matchmaking services; Takutake offers its popular Ayumi shoe designs; Platinum Guild offers its Legacy line-up of home furnishings that do double-duty as investments that last. The opportunities are endless!

The dramatic phenomenon and pace of aging in Japan – the most advanced in the world – literally makes Japan a “laboratory” in which the numbers work for new product and service innovation across a wide range of categories.