| BUSINESSWEEK ONLINE : JULY 17, 2000 ISSUE | ||||||||
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| INTERNATIONAL -- ASIAN BUSINESS
These Oldies Look Golden to Japan Inc. (int'l edition) Companies finally start targeting the aging population Infrared sensors can follow Shizue Ozasa's every move as she maneuvers around her room. Chips in her shoes can trigger locks should she try to leave. A database can record everything she does. It may sound Orwellian, but this is Big Brother at his most benevolent--and potentially most lucrative. Ozasa, 89, is spending her final years at NAIS Care Owada, a nursing home in Osaka, where she and 44 other residents are part of a focus group testing new ''electronic minders'' for the elderly. The gadgets are just a few of the devices, products, and services for Japan's aging population making their way into the Japanese marketplace. Japan Inc. is just beginning to wake up to the potential of this market. The so-called Silver Generation, age 65 and up, is Japan's most rapidly growing demographic group. Currently 17% of the population, the elderly are projected to reach 25% by 2015. For years, companies targeted teens and middle-age salarymen--those with disposable income and a willingness to spend. But these consumers, battered by a long recession, have been holding back. In these circumstances, the elder market looks too big to ignore. So companies are jumping in and spending large amounts to set up new businesses in hopes of recouping investments down the line. ''There's a collective realization that this is a valuable market,'' says Debbie Howard, president of Japan Market Resource Network, which tracks consumer trends. ''More companies are starting to aggressively market to the elderly.'' The potential is definitely there. The over-65 crowd is sitting atop almost half of Japan's $11.3 trillion in savings. Projections have them spending nearly $95 billion a year on new products, home care, and home renovations to make their lives easier. In a country where families would rather care for the aged at home than send them to a nursing home, in-home care alone is expected to be a $37.8 billion business this year--and to double by 2010. Construction companies are doing a booming business modifying homes, and recent government guidelines will require 40% of new homes to be built with wheelchair-accessible hallways and elder-friendly fixtures. The ''reformed homes'' feature auto-flush toilets, lights that help house-bound occupants maintain their circadian rhythms, and home elevators. Sales at Mitsubishi Electric Elevator Products, which sells such an elevator for $22,500, rose 30% last year. Oddly, one of the biggest sectors to plunge into marketing to the elderly is the utility industry. These companies have staff that visit homes regularly to collect gas, electric, and water data, and have a structure in place to capitalize on the new market. Tokyo Electric Power Co. (TEPCO), set up a subsidiary devoted to the elderly and is expanding staff. The result, Tokyo Living Service, offers two options: For $14.25 an hour, a helper will do shopping, laundry, and chores; more comprehensive home help costs $38 an hour. Likewise, Osaka Gas Co. has helper services, offers $65-an-hour physical therapy, and runs an old-age home in Kobe. GROWING PAINS. Sounds promising, but developing this market is turning out to be a slog. Tokyo Living Service loses money on each home visit and doesn't expect to break even until 2003. Nursing homes, such as NAIS Care Owada, which is run by electrical equipment manufacturer Matsushita Electric Works, require millions in capital spending on equipment, from motorized wheelchairs to adjustable beds. Until all those Silver Generationers without relatives to care for them are ready to take advantage of the new facilities, homes will remain half full--and profits limited. NAIS Care Owada, which requires a $281,000 deposit and a $2,200 monthly fee, is less than two-thirds full. Another home-care company, Comsn, also is going through growing pains. It expects to lose $94 million this quarter. But Japanese companies still hope to cash in, setbacks or no. And more and more exotic high-tech devices are showing up in the geriatric ward. Among Matsushita Electric's 2,000 products is a $95,000 Care Wet Call wireless diaper system that alerts staff when residents' adult diapers need changing. The company also makes a $190,000 virtual horse that allows riders to view a large screen showing various scenes while the horse exercises back, side, and leg muscles. Matsushita uses NAIS Care Owada to try out most of these products before taking them nationwide. Shizue Ozasa doesn't seem to mind trying new things. ''It's a very warm place,'' she says. ''I feel right at home.'' That's what the makers of elder products are hoping. By Ken Belson in Osaka _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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