Japan's aging society is transforming the infant care industry.

The global trend of population aging is intensifying, with countries like Japan and other Asian nations facing a demographic crisis. Japan's declining birth rate and rising proportion of elderly population are impacting pensions and healthcare systems. The increase in the elderly population is driving growth in the market for adult incontinence products, prompting Japanese companies to adjust their production strategies. Africa is expected to be the only region with an elderly population proportion below 15%.

Japan Faces Unprecedented Population Aging Challenge

The world's population is aging, a phenomenon the United Nations describes as an "irreversible global trend," driven by longer lifespans and smaller family sizes. According to a report released by the United Nations last year, the global population of those aged 65 and older is expected to more than double by 2050, reaching 1.6 billion.

In Japan, this shift is threatening one of the world's largest economies as the proportion of elderly people increases and fewer couples are having children. In early June, Japan reported that the number of births had declined for the eighth consecutive year, hitting a record low of 727,277 in 2023, the lowest since Japan began keeping records over 120 years ago.

A few months earlier, Japan announced that one in ten people were aged 80 or older, making it the oldest country in the world. Last year, nearly 30% of Japan's population was aged 65 or older.

Japan's Aging Population Spurs Shift in Diaper Market

In June 2023, Japanese Prime Minister Fumio Kishida unveiled a multi-billion-dollar package aimed at encouraging families to have more children. Japan is striving to address its demographic crisis as a shrinking workforce and growing elderly population place increasing demands on pensions and healthcare.

The rise in the elderly population is also transforming the consumer goods market. Demand for adult diapers in Japan has been rising, while demand for baby diapers has been declining. According to market research provider Euromonitor International, the global market for adult diapers was valued at $12.8 billion in 2023 and is expected to reach nearly $15.5 billion by 2026. In Japan, the adult diaper market was valued at $1.7 billion in 2023 and is projected to grow to $1.9 billion by 2026, accounting for more than 12% of the global total.

Oji Holdings, a Japanese manufacturer, exemplifies this adaptation. In March, the company announced it would stop producing baby diapers for the Japanese market later this year, shifting its focus to adult incontinence products. The company stated it would continue its overseas baby diaper business, with sales still growing in China, Indonesia, and Malaysia. Despite the domestic market slowdown, Oji Holdings' sales of adult diapers in 2023 were 7.3% higher than those of baby diapers.

Other Japanese companies are already adapting to the shift. According to its website, electronics giant Panasonic has been researching and developing products aimed at the elderly population since 1990.

Japan is not the only place in Asia struggling with aging. South Korea has the lowest fertility rate in the world, with 0.72 babies born per woman in 2023, down from 0.78 in 2022 and a new low. Birth rates are also falling in Hong Kong, China and Taiwan.

By 2100, Africa is expected to be the only region where older people make up less than 15% of the population. According to UN projections, older people in Europe, North America, Latin America and the Caribbean are likely to cross the 30% threshold by then.