Background to Today's Post
In our previous post, we examined how Toyota, a Japanese car and robot manufacturer, is capitalizing on the fact that Japan's population is aging faster than it's growing.
Today, we'll examine how Japan's aged are treated in families and where your company can fit into the Japanese family-setting.
The Japanese labour statistics for January 2009 show that 65.5% of Japanese persons between 55-64 years old work, whilst 19.6% of persons over 65 years old, still work.
In Japanese society, your age determines the size of the salary you take home, with salary increasing with age.
Although the official retirement age in Japan is 60, some elderly persons for health, social and economic reasons decide to still work after retirement, even though their salary is substantially reduced after retirement age.
(With an aging population, the Japanese government restructured pension systems in 1986 with less benefits going to retirees, hence the high number of these people who are still working).
Where Does Your Company Fit in in the Japanese Family?
According to article:"Elderly people in Japan", Wikipedia.org:
"In the 1980s, there was a major trend toward the elderly maintaining separate households rather than co-residing with the families of adult children. The proportion living with children decreased from 77% in 1970 to 65% in 1985, although this rate was still much higher than in other industrialized countries.
The number of elderly living in Japan's retirement or nursing homes also increased from around 75,000 in 1970 to more than 216,000 in 1987. (This figure rose to 400,000 in October 2007).
But still, this group was a small portion of the total elderly population. People living alone or only with spouses constituted 32% of the 65-and-over group. Less than half of those responding to a government survey believed that it was the duty of the eldest son to care for parents, but 63% replied that it was natural for children to take care of their elderly parents.
However, the motive of co-residence seems to have changed, from being the expected arrangement of an agricultural society to being an option for coping with circumstances such as illness or widowhood in a postindustrial society."
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Now, both these trends: 1) the rise in elderly single-family households and 2) the fact that a majority (over 60%) of Japanese elderly still live with adult children and their families, represent interesting opportunities for companies wishing to gain a foothold in the Japanese market.
With the 12th largest disposable income in the world (2005 figures) and with a disposable income of US $12,076 for non-elderly workers' households with two or more family members (2005 figure), Japan is ripe for companies who want to increase their market share among the elderly in Asia.
The Statistical Handbook of Japan - Chapter 13 Family Budgets and Prices: "Figure 13.5 - Average Monthly Income and Expenditure (Non Working Elderly Households) 2008", shows the monthly disposable income of elderly households in 2008 being 189,829 yen (US $2,148.95)...or having an annual disposable income of 2,277,948 yen (US $25,187.7).
Yet these households had an average monthly deficit of 60,622 yen (US $670.31) due to their monthly consumption expenditure being 250,451 yen (US $2,769.28) versus monthly incomes of 222,731 yen (US $2,462.78).
[Annually, these figures were: an average deficit of 727,464 yen (US $8,043.70), due to annual consumption expenditure of 3,005,412 yen (US $33,231.4) versus an annual income of 2,672,772 yen (US $29,553.3)].
A closer look at these households' consumption expenditure show that 1/5th of their consumption expenditure was on "Social Expenses", 1/5th on what is classified as "Others" and "Culture and Recreation" and 1/10th on Communication and Transportation.
Thus elderly households in Japan (in 2008) spent 50% of their cosnumption expenditure on entertainment or activities of a social nature.
This shows the importance of these activities to the aged in Japan.
However, the debt of non-working, elderly, single-family households, while presenting a problem to these households and to the Japanese government, begs for a solution from financial management companies and hence is an opportunity for these companies to target and tailor products for this market segment.
...as Japanese elderly who live alone or with spouses, need to learn how to curtail their spending so as to get out of debt.
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With an increasing number of Japanese elderly being put in or choosing to live in retirement or nursing homes, this represents an opportunity for companies who can provide recreational activities to these elderly who are still mobile and who will probably want to go on excursions, tours, just for a change of scenery from the nursing/retirement home setting.
This is backed up by Figure 13.5 of the Statistical Handbook of Japan -Chapter 13 Family Budgets and Prices, where we see that social and recreational activities for the elderly are important to them and accordingly, they will spend on these activities.
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With nearly 60% of elderly Japanese living with adult children and their families, these social activities, will enevitably include younger children.
This is great for both the child and elderly family member as both provide well needed balance (kinkou) to each others' lives:
Children learn important values from elderly grandparents. Grandparents get tremendous pleasure from helping to nurture and from spending time with their grandchildren.
Companies that can provide entertainment and recreational activities and products, that allow both the elderly and their grandchildren to interact e.g. movie and shopping complexes, play/opera houses, video game and video game console manufactures, stand to benefit greatly from this trend.
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For elderly persons who live in single-family households this interaction with grandchildren will be greatly diminished. This may be the reason that 1/10th of their expenditure goes towards transportation and communications.
....They have a need to visit and communicate with their younger relatives.
If your company can provide surrogate and other arrangements where Japanese children and the aged can interact in a mutually beneficial and safe environment, your company's revenue base will be the better for it.
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The above examples prove that there are an abundance of opportunities for your company, where Japan's aging population is concerned.
To capitalize on these opportunities, however, you need to take a 360-degree look at the needs of the Japanese elderly and find ways of tailoring and/or creating product and service solutions that can improve these elderly persons' lives, whilst bolstering your company's profit margin.
Gillian
Sources Include
1) Article, "Japan - VALUES AND BELIEFS" by Ronald E. Dolan and Robert L. Worden, via US Library of Congress, accessed July 9, 2010
2) Table: "List of countries by per capita personal income" Wikipedia.org, accessed July 8, 2010
3) Article, "A Brief Introduction to Japanese Society" by Monika D. Wood, Department of Sociology, Anthropology and Criminal Justice, Rutgers University, accessed July 7, 2010
4) Statistics Bureau of Japan's Table 2, "Population of 15 years old or more by labour force status, agri-/non-agriculture, status in employment (employee in non-agricultural industries by number of persons engaged in enterprise), age", accessed July 6-7, 2010
5) Statistics Bureau of Japan's, Table 5, "Population of 70 years old or more by labour force status, agri-/non-agriculture, status in employment (employee in non-agricultural industries by number of persons engaged in enterprise), age", accessed July 6-7, 2010
6) Article, "Japanese family" via Wikipedia.org, accessed July 4, 2010
7) Article, "Elderly people in Japan", Wikipedia.org, June 2009
8) Article, "Waiting list for nursing homes put at 400,000", Kyodo News, via The JapanTimes Online, January 27, 2009
9) Book Review, "Modern Japanese women: dealing with sex, lies and the dried-flower syndrome", by Jeff Kingston, The Japan Times Online's Entertainment Section, January 27, 2008
10) Statistics Bureau of Japan's Statistical Handbook of Japan - Chapter 13 Family Budgets and Prices, 2008
11) Article, "A Comparison of Japanese and American Work and Family Values", by John W. Engel, October 1984
12) Article, "The Care for the Elderly in Sweden and in Japan", by Kazunori Yamanoi
I agree,Toledo OH RetroFoam,
Thanks much for sharing!
Gillian
Posted by: Gillian Campbell | May 01, 2012 at 06:41 AM
Companies that can provide enjoyment and activities and products, that allow both the older people and their grand babies to communicate e.g. movie and shopping things, play/opera homes, movie gaming and movie gaming gaming system produces, stand to benefit significantly from this pattern.
Posted by: Toledo OH RetroFoam | April 24, 2012 at 03:20 AM