A $1 Trillion Worth ‘Silver’ Lining For Entrepreneurs
Considering that India’s elderly are the biggest spenders, this is an opportunity waiting to be tapped.
If you think developing products for Gen Z or ‘Zoomers’ is complex, there is another age group that is ready to present exciting new challenges.
India’s elderly population (aged 60 and above) is projected to touch 194 million in 2031 from 138 million in 2021, which is a 41% increase over a decade. This is a group comprising the wealthiest citizens, often called the ‘silver’ economy. And these seniors are ready to spend on quality products. In fact, it is estimated that these individuals would spend $1 trillion by 2030, making a big contribution to the $5 trillion Asian seniors market. For the country’s 76 million-plus entrepreneurs, this emerging market presents unique opportunities.
Business owners could also take examples from the United States where the home care market is expected to grow from $100 billion in 2016 to $225 billion by 2024, on the back of a rising elderly population. The market size of retirement communities alone in the US is estimated to be $73.5 billion in 2022. In India, it is negligible.
This is an opportune moment for India’s budding entrepreneurs to start working on product development, be it health, wellness, or even assisted living for the elderly.
So, why seniors? For starters, this age bracket has a higher disposable income so a higher number of financial products can be pitched to them. Apart from these, leisure products can be developed depending on the personal interests and health conditions of their senior clients. And finally, business owners also get an opportunity to do a deeper need-based analysis because high-risk-low-return products wouldn’t be suitable for this generation.
Contrary to popular belief, financial services aren’t the only places seniors want to invest their money. The seniors of today also look at retail, wellness/pharma, and real estate as sectors where they wish to spend their funds. And this is where the country’s entrepreneurs ought to play.
Here’s a glimpse into the window of opportunity for the country’s established and emerging businesses as India’s senior citizen numbers grow:
Financial services
The 138 million boomers in the country need access to financial services. For entrepreneurs and their product teams, this offers a chance to develop one-click solutions that are accessible, high-assistance led, and simple to understand.
For example, a do-it-yourself digital KYC could be easy for millennials or Gen Z. But the same process would not be suitable for senior citizens. In their case, sending a bank officer home to complete the KYC would be a better option. And hence, the design of the startup should be such that this service is built into it.
Even presentation matters. Businesses need to be cognizant of the fact that financial brochures, forms should be uncluttered with large fonts and simple graphics. The digital barrier should also be kept in mind before offering a service on a mobile application. While senior citizens are equally digitally savvy, a one-size-fits-all approach wouldn’t work.
On the other hand, products like insurance would need to be designed differently keeping in mind the age of the prospective customer. Retirement products, enhanced illness-linked health insurance, and pension plans are what seniors would be looking for, rather than term plans with long payment tenures.
Unlike millennials or Gen Z who could be open to new forms of lending and market products, seniors are better suited for products that have guaranteed returns. Hence, it is also important to gauge the risk appetite of elderly customers before designing investment solutions linked to concepts like cryptocurrency and virtual assets.
The advantage of discovering seniors and catering to their specific needs is that they will be repeat customers, unlike the younger generation that switches brands regularly. This means that the elderly population can significantly contribute to the company’s revenues. So long as the companies are listening.
Retail and wellness
This is a market that is set to explode in this age bracket. According to a Deloitte report spending by senior citizens is predicted to increase from $100 billion in 2020 to almost $1 trillion by 2030.
And brands have recognised this market. Music company Saregama India’s Carvaan device is specifically targeted at the ‘silver’ generation and has sold over 2 million units so far.
For entrepreneurs, this is a segment where they can experiment with new ideas. This cohort has spare income and is also willing to spend on themselves. So, lifestyle products like handheld music devices, acupuncture shoes, non-touch fitness trackers, health monitors, and lightweight gardening equipment are some of the innovations that the country has seen so far.
Ageing is viewed differently by different age groups. So, while a 30-year-old professional could demand an anti-ageing serum, a 65-year-old retired individual could be simply looking for a fragrance-free moisturizer for dry skin.
Taking a cue, e-commerce websites such as Seniority specifically targeted at this market have been set up. With nuclear families on the rise, personal comfort with minimal technology intervention has been the first priority for seniors. And that’s where the future tasks of our business owners are headed.
An industry that is linked to the retail sector is real estate. Designing weekend homes for those above 60 years requires looking at their individual preferences including access to parks, gardens, walking tracks, open spaces, and assistance like medical facilities and caretakers. For example, compact homes with high-tech equipment meant for bachelors or couples wouldn’t work for senior citizens so it is the job of the niche businesses to make design decisions accordingly.
Taking cues from the US market where intergenerational living complexes are getting popular, Indian businesses could also look at such options where students and senior citizens could be housed together.
Seniors are not ‘boring’
Discretionary spends
An often ignored category for seniors is the area of discretionary spending. Customised travel packages, spa treatments, meditation retreats are just some of the design opportunities for the country’s entrepreneurs.
Compared to the West, India’s rich cultural and religious diversity also means that entrepreneurs’ roles will get more demanding. Developing unique experiences is what will set them apart from the competition.
For example, a senior with arthritis may prefer a tour on a private vehicle while another with no major health history could be keen on an assisted Himalaya trek. The skills and past product design experiences will come in handy in choosing the right fit for the right solution.
In a way, the senior-citizen segment is the sweetest spot to be in for upcoming entrepreneurs. This age bracket exactly knows what they want, why they want it, and they have the will to spend on it. Design the right product and they will be immediate customers.
All that’s left to do is to handhold them through the journey to bridge the demand-supply gap. What’s better? Business leaders could even end up taking life lessons and professional tips from the golden-agers.
“Don’t find customers for your products. Find products for your customers.” These words of American entrepreneur and marketing expert Seth Godin hold true for India’s entrepreneurs targeting the country’s ageing population.
