SME

By Kawal Preet | July 19, 2024

As Asia’s population ages, businesses are waking up to the purchasing power of the silver economy. Find out how your business can tap this important segment and understand their consumer preferences and habits.

• APAC’s rapidly aging population has given rise to an older consumer demographic that businesses will be smart to consider.
• Armed with considerable wealth and more free time than younger consumers, affluent seniors are a lucrative target audience for SMEs.
• Discover ways to tap the silver economy and understand what makes older consumers tick.

Picture your target customer. When developing products or services, which demographic do you hope to reach? Is there a specific demand you’re trying to meet?

Across the dynamic markets of the Asia-Pacific region (APAC), an important demographic shift is underway. The emergence of the silver economy, driven by an aging population, creates a wealth of opportunities for businesses of all kinds.

Think about a society – entire communities, even – skewed in favor of older citizens. Growing numbers of people approaching or occupying retirement age have led to the reshaping of consumer landscapes.

Of course, specialist businesses have always existed to cater to older audiences – particularly in healthcare, consumer goods, and personal mobility. But can smaller enterprises and e-tailers tap into a lucrative, underserved market segment without changing their business model or excluding younger consumers?

To find out whether the silver economy represents a real opportunity for your business, it’s important to understand the nuances and habits of this fast-growing consumer base.

APAC is leading the global aging phenomenon

APAC isn't just a powerhouse of economic growth; it's also home to some of the fastest-aging populations on the planet. Currently, about 60% of the world’s elderly population - that is, roughly 630 million people, reside in this region. By 2050, this number is forecasted to reach 1.3 billion.

So why does this group of consumers wield such economic heft? Crucially, they occupy a sweet spot: older generations don’t just have money; they hold substantial chunks of time to spend it. Leisure time, travel, socializing, investments, and hobbies: these all come with a price tag, representing revenue flowing into different businesses' pockets.

Improved healthcare infrastructure and major advances in medical research and technology have led to increased life expectancy. This also means a more active and engaged older population, with seniors looking into products and services that cater to their evolving needs and lifestyles.

4 hotspots for the silver economy in APAC

This demographic shift presents social challenges, but also opportunities. More and more, corporations and businesses are recognizing the serious purchasing power of the silver economy. Current hotspots include:

Japan: Famously home to one of the world's oldest populations, Japan is a hotbed for silver economy opportunities. From innovative healthcare solutions to senior-friendly tech products, businesses in Japan are tapping into the silver market with tailored products and services.

Thailand: Known for its hospitality and respect for elders, businesses in the tourism and hospitality sectors are capitalizing on this trend, offering senior-friendly travel packages and accommodation.

Singapore: As a global financial hub, Singapore boasts a thriving silver economy ecosystem. From financial services to lifestyle products catering to active retirees, businesses in Singapore have long been embracing the silver market.

Hong Kong: Another market with a noticeably elderly population is Hong Kong. From the growing industry of at-home care to transportation, investments and insurance, businesses here are accustomed to meeting the needs of older citizens.

Why businesses should target the silver economy

Consumer behavior and demand patterns are changing, and the benefits for small businesses and e-tailers continue to stack up. There are compelling reasons to consider these potential customers:

1. Untapped market potential

Despite its rapid growth, the silver economy remains overlooked by many businesses, particularly those who are focusing on Gen Z. That means there’s still white space for businesses to get a head start in catering to this demographic.

2. Loyalty that sticks

Senior shoppers are loyal consumers. They’ll typically cultivate deep brand affiliations, preferring not to take chances or experiment later in life. By tapping into the silver market, you're not just gaining customers; you're building relationships that can engender repeat customers.

3. Surprisingly diverse interests

With silver shoppers, you’re dealing with a complex demographic. Expect a diverse range of interests and preferences spanning healthcare, leisure, technology, and more. This broad range opens doors for businesses to innovate, tailoring products and services to meet many different needs.

How to engage and market to older consumers

Depending on what your business offers, there are several ways to develop a successful, silver-friendly engagement strategy. Consider these six tips for appealing to the elderly generation:

1. Customer experience matters

Seniors appreciate good old-fashioned customer service. To cater to both young and old consumers, businesses can provide both offline and online dedicated support channels, including hotline assistance and live chat.

2. Audience segmentation and personalization

Segment customers based on factors such as lifestyle, preferences, and purchasing behavior. Leverage data analytics to personalize communications and offerings. Personalization is key when it comes to wooing the silver market.

3. Make digital platforms senior-friendly

What can surprise some businesses is that many seniors are tech-savvy and digitally connected. According to the Singapore Digital Society Report, more seniors are adopting online payments, increasing from 38% in 2018 to 78% of the aging population in 2022. E-commerce platforms are the perfect playground for reaching and engaging them.

But you must make sure your e-commerce platforms are senior-friendly, with larger fonts, intuitive navigation, and clear instructions. Focus on accessibility so seniors can browse and buy with ease.

Remember, seniors often get targeted with fraud. Depending on your business, you might want to share proactive tips for how they can stay safe online.

4. Build a sense of community

Foster a sense of belonging by organizing events, workshops, and online forums that facilitate social interaction with peers. Encourage user-generated content and testimonials to give customers a platform to share their experiences.

5. Get smart with partnerships and collaborations

Forge strategic partnerships with local healthcare providers, retirement communities, and senior organizations to extend the reach of your products and services. Seniors are most likely to be influenced by people of their own age. Collaborate with older influencers and thought leaders to build credibility.

6. Make shipping simple

Seniors value convenience. Work with a reliable logistics partner like FedEx to offer seamless shipping options, including doorstep delivery, tracking services, and hassle-free returns for a smooth shopping experience.

Now’s the time to explore the silver economy

The rise of the silver economy in APAC represents a major paradigm shift for society as well as the economy. It has the potential to change the social-economic fabric of small communities, in particular, with different implications for urban and rural areas.

SMEs that target the silver economy may be able to tap new revenue opportunities. And ultimately, the more this demographic is considered, the more diverse, inclusive, and accessible our society will become, for people of every age and level of mobility.