The Asia-Pacific region is undergoing profound and rapid population changes - all countries in the region are in the process of aging at an unprecedented pace. By 2050 more than one quarter of the region’s population – or 1.3 billion - will be 60 years or older.
This trend will be most evitable in East and North Asia with over a third of the population expected to fall into this age group. In Japan, one of a few super-aged societies worldwide, 24% of the population was 65 years or older in 2012. By 2025 the figure is expected to reach 30%, and by 2060 to be almost 40%.
Moody’s projects the number of ‘super-aged’ societies (defined by the UN as populations with more than 20% of the population aged 65 and older) to increase from three in 2014 to 34 by 2030 including Japan, Hong Kong, Singapore, and Korea. China, Thailand, and Sri Lanka will be aged societies by 2030, with those aged 65 and older accounting for at least 14% of the population.
Analysis by Deloitte shows that those in Asia over 65 years of age will be the largest and fastest growing market in the world: by 2042 there will be more over-65-year-olds in Asia than the total populations of the Eurozone and North America combined.
This trend has created the so-called silver economy, a term that captures the economic opportunities associated with the growing expenditures of those older than 50. Senior citizens are increasingly recognised as a new and powerful consumer class. According to the Boston Consulting Group, the silver economy will not only dwarf the market opportunity presented by the period of the baby boomers, but also be far more long-term.
Asia is leading digital transformation, but senior citizens left out
In parallel with this demographic shift, Asia leads the world in digital transformation with technology penetrating all aspects of daily life, often far more deeply than in Europe or the US. The most prominent example for this is Tencent’s multi-purpose messaging, social media and mobile payment app WeChat which had around 1.08 billion monthly active users in the third quarter of 2018.
As information, knowledge and data become more widely available, the ongoing digital transformation has the potential to spur innovation, enhance productivity, and improve well-being.
But as it stands now, not everyone is benefitting from the opportunities linked to digitalization and there is an increasing understanding that access to digital networks does not ensure effective use.
A recent study by Pew Research Center shows that the young and well-educated lead the way in internet usage and smartphone ownership and that there are significant differences between advanced and emerging economies:
- In Asia’s advanced economies, the age gap in smartphone ownership is closing rapidly. In Japan the smartphone ownership rate among the 50-and-older age group has increased from 15% in 2015 to 44% in 2018. In South Korea it increased from 74% to 91%.
- In India, Indonesia and the Philippines the rate is still low at 8, 13, and 27% in 2018 respectively.
The Centre for Aging Better warns that those not using the internet, such as senior citizens, are at risk of being left on the wrong side of the digital divide, as more services and information move online. It argues that the meaning of ‘digital inclusion’ will shift and become less about whether you are online or not and more about what online activity you are carrying out and how. Research funded by the Centre for Aging Better draws a granular picture of why senior citizens may not fully benefit from the digital transformation:
- Some seniors may have made an informed and reasoned choice to be offline. Others may access online services and information through family, friends and other trusted intermediaries.
- Barriers to using the internet are complex and range from low confidence and misunderstanding of the internet (e.g. perceived value of going online and concerns about security of personal and financial information) to personal circumstances (e.g. crises such as losing a job or a deteriorating health condition can affect the need and interest). For many, ‘basic digital skills’ may neither be the problem nor the solution.
Asia’s unconnected senior citizens – an untapped market
With information and services increasingly becoming digital, senior citizens stand to benefit significantly from going online. Especially for those with limited mobility or at risk of social isolation, going online can help stay connected with friends and family, access services and goods (e.g. through shopping online), or pursuing hobbies and interests.
While it is well known that senior citizens can benefit substantially from being connected and that they constitute a segment with clear market potential, consumer companies are only slowly building a more nuanced understanding of senior consumers.
A company leading the way in the region is Visa. In Singapore – where the government has plans to move towards a cashless society - Visa conducted a study on the use of digital services by senior citizens and partnered with People’s Association (a statutory board of the Government of Singapore) to provide hands-on IT and digital payments training as part of the Seniors for Smart Nation program.
The Visa Digital Inclusion Study 2018, based on face-to-face interviews with 200 Singaporean consumers aged between 50-80 years old, analyzed senior citizens’ digital access, literacy and participation. The study distinguished between younger seniors (50-64 year olds) and older seniors (65-80 year olds) for more nuanced findings. The study found that for both groups, access to connectivity, mobile devices and mobile apps were not barriers to online activity. Key challenges impeding use of digital payment options were relatively low ownership of credit and debit cards, heavily ingrained use of cash, and concerns about fraud and cyber security.
Studies like these demonstrate that while digital technologies can provide important benefits, they are not a means in themselves. There are inherent barriers that prevent certain disadvantaged group from benefitting from these technologies that need to be addressed.
It is promising to see a growing interest by key players in the digital ecosystem to help address some of these barriers. US-based EverSave addresses the increasing risk of fraud and diminishing cognitive capabilities in older seniors by offering a solution that carries out daily bank account analysis and if necessary sends an alert to a relative. Doro 8035, an easy to use smartphone developed for seniors by Swedish telecom company Doro, has loud and clear sound and remote access capabilities, enabling friends and family to assist the user if difficulties occur.
In Asia’s aging societies - many of which will continue to face immense challenges related to lacking healthcare and education infrastructure as well as economic dependency of elderly - digital technologies hold vast potential to increase the medical, social, and economic wellbeing of senior citizens. This provides opportunities for consumer facing companies from various sectors to tap into technological innovations to address the needs of this rapidly growing consumer segment. To successfully tap into Asia’s silver economy, companies need to adopt more granular strategies based on richer sources of insights and more detailed customer portraits.