Clothing retailers Abercrombie & Fitch and Uniqlo might want to think about moving beyond their recent focus on the young hipsters in Asia. The region is already home to over half of the world’s over-60s. And that figure is only going to increase as the global number of elderly residents passes one billion by 2017, according to research firm Euromonitor.
Aging populations in East Asian powerhouses like China, South Korea and Singapore could fuel spending. Du Peng, a professor of gerontology at Renmin University in Beijing, told China Radio International that China should shift from a youth-focused services industry to one that targets older people, and specifically their savings. “By the end of this year, we will have more than 200 million old people. The big size itself will create many opportunities for the so-called ‘silver economy,’” he said. Like Japan, he suggested, China could develop more shopping, medical devices, and products for its elderly. Over-55s are expected to drive over half of the growth (paywall) in personal spending in developed markets over the next 20 years.
But there are risks to this trend. The fastest-growing pockets of elderly citizens are in emerging markets, not developed economies, and some of the drawbacks to having an increasingly silver-haired citizenry are more pronounced. China has an underdeveloped social welfare system; local government finances are already stretched; and the one-child policy means many working-age Chinese are the sole providers for their parents and grandparents. In a study last month, the US Federal Reserve said China’s aging population could mean slower growth in the long term as the workforce begins declining in 2020.
Moreover, because countries like China and Singapore have aged faster than those in Western Europe, they have had less of the “demographic dividend“—a phase in industrialization when a country’s working-age population is large and mostly unfettered by family responsibilities, note Rafal Chomik and John Piggott of the University of New South Wales in an article for the East Asia Forum.
In France, it took four centuries for the population over 60 to reach 14% from 7%. Countries like China, Singapore, and Brazil will take only two decades to reach a similar proportion. China, Japan, South Korea, and Singapore will see the ratio of elderly to working-age residents reach between 58% and 70% by 2050, according to Chomik and Piggot. “A key difference between advanced economies and emerging Asian nations… is that the speed of Asia’s demographic transition means many countries risk growing old before getting rich,” they write.