What If One Quarter of Your Population is Old?

China’s demographics are doing a flipflop.

In Rudong County, located along China’s east coast, the number of government-funded retirement homes has expanded from one to five. Meanwhile only one elementary school remains from the 14 that used to exist in each village. Shifting from a one-child policy and the concern that there were too many children, now, too many old people is the worry.

One way to look at the demographic switch is through population pyramids. Whereas in 2010, 8.4 percent (113.5 million) of China’s population was 65 and older, by 2020, the projection takes us up to 11.7 percent (167.4 million).

Below you can see the senior citizen bulge move upward until, in 2050, they total 25 percent of the population.

 The Retail Response

My favorite, though, is how markets are responding. In a joint venture with the Chinese, a Japanese company, Longlife, will market disposable adult diapers, water absorption pads, water-resistant sheets and wet wipes.

From: Asia.nikkei.com

U.S. firm Kimberly-Clark has also targeted the Chinese seniors market for its Depends. On the nutritional end, Abbott Labs is accelerating its Ensure marketing and testing new flavors. Correspondingly, internet seller Taobao has a seniors shopping section and a new Smartphone from Hisense has medical alerts and larger flashlights.

You get the picture. But it really is much bigger when we look at aging elsewhere.

Our Bottom Line: Dependency Ratios

Defined as the proportion of the population that needs support from the labor force because its constituency does not work, the dependency ratios of developed nations is skyrocketing as populations age. By 2050, it is expected to plateau at a whopping 50 percent “or one retiree for every two workers.”

From: OECD

And that takes us back to the demographic and product switch from babies to boomers:

From: WSJ