Summary 

• The world is fast aging, particularly in developed economies such as the US, EU and Japan. The growing number of the elderly represents a large consumer base for Hong Kong exporters.

• The aged of today have accumulated much more wealth than earlier generations. They are relatively less affected by the current economic downturn.

• To sell health-related products, it should be noted that suppliers need to go through tedious, time-consuming and costly procedures to become qualified manufacturers.

• Non health-related products for the elderly which incorporate new designs on traditional products appear to be a cost-effective option for companies that are already experienced players in the traditional industries.

The world is fast aging. According to the United Nations, there are currently more than 610 million people aged 60 or above, accounting for 10% of the world's total population. By 2050, this proportion is projected to increase to 22%. In Hong Kong's major traditional markets, namely Europe, the US and Japan, the aged population as a whole is estimated to increase from some 250 million today to 380 million by 2050, which represents a large consumer base for Hong Kong exporters.

There is a general perception that the aged are the poorest group of consumers with low incomes and a lack of drive to spend. Contrary to this belief, the aged of today have accumulated much more wealth than earlier generations. Assuredly, the financial tsunami of 2008 has become an economic crisis and the global economy is expected to be stagnant for a period of time. Consumer sentiment, in general, is weak. However, in a relative sense, elderly consumers should be less affected.

First, as they are retirees or are approaching retirement, they have accumulated some wealth and are better prepared for not having a steady income. Secondly, the elderly tend to be less aggressive and thus should experience less investment loss during the deleveraging process. Finally, the overall spending of elder consumers is less sensitive to the economic climate than other consumer groups as they spend a higher proportion on necessities such as healthcare products.

Hong Kong exporters are thus advised to look at the opportunities available in the silver market, i.e. the market for the elderly. Although many have argued that the silver market does not comprise a single, homogeneous mass of consumers, aged consumers, in one way or another, do share some common characteristics and perceptions, which will be useful for identifying marketing potentials, designing products and services, and developing marketing strategies.

In terms of products, the silver market can be classified into two broad categories, namely health-related and non health related. To sell health-related products, it should be noted that suppliers need to go through tedious, time-consuming and costly procedures to become qualified manufacturers. Companies should play defence amid the current economic recession. However, since the healthcare industry is in an expansionary phase, Hong Kong companies should continue pursuing market opportunities in this industry by utilising their strengths and existing capacity in OEM.

As for non health related products for the elderly, the entry barrier is lower since, unlike medical equipment, it involves less technology skills but more on new designs of traditional products. Thus it appears to be a cost-effective option for companies which are already experienced players in the traditional industries, for example, in the clothing industry. However, while the entry barrier is low, competition is keen. To be successful, the products have to be innovative. On the other hand, as the designs may not involve very high technological content, others may copy their designs easily.

For Hong Kong SMEs, the institutional silver market is more difficult to crack. Government agencies and hospitals normally require more sophisticated health equipment and demand more professional products from larger international manufacturers. Hong Kong SMEs may not have the necessary skills to produce these products and, hence, they are recommended to concentrate on the household silver market.

To play safe during the current recession, Hong Kong SMEs are recommended to establish partnerships with local importers, agents or retailers. However, this does not mean that they cannot have a hand in sales and marketing. For some products like health foods or products with new features, face-to-face or direct sales can be a very effective way of promotion. Prompt after-sales service, cost-effective maintenance, repair, and replacement are also important for certain products.

To establish networks with overseas buyers and agents, exporters and manufacturers can participate in relevant overseas exhibitions such as the Medica held in Düsseldorf, Germany and the International Toy Fair held in Nuremberg, Germany; and local exhibitions organised by HKTDC, including the Food Expo, the Hong Kong International Tea Fair and the International Conference and Exhibition of the Modernization of Chinese Medicine and Health Products, the Hong Kong Electronics Fairs, and the Hong Kong International Medical Devices and Supplies Fair.

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