Asia's Diaper Demographics: When A Nation Sells More Nappies For Adults Than For Babies

Japan has just crossed perhaps the most vivid line in the demographic divide. Still, there are other surprises about what may ensure future economic growth across Asia.

A rare baby-spotting in Tokyo...
A rare baby-spotting in Tokyo...
Betty Ng

Japan crossed a threshold this year. Sales of adult diapers are now greater than those destined for babies. Other statistics to do with the aging population are equally surprising. Not only are there a massive number of centenarians in Japan, but the country also accounts for half of Asia's 86,000 “longevity millionaires” -- people who have lived more than a million hours, that is, who are over 114 years old.

However, it’s not just in Japan that sales of nappies for adults are increasing; also in other Asian countries and regions such as China, Thailand and Taiwan. Meanwhile, populations in Indonesia and India are very young so the comparison highlights the diversification of Asia’s demography. The overall trend of an aging population will undoubtedly affect fundamental economic momentum such as demand, output and the labor market. At the same time it will also create driving forces for technologic innovation in the financial markets and various asset sectors.

Japan is certainly not the only country or region that faces an aging population. China, South Korea, Hong Kong, Singapore as well as Taiwan are not spared, but suffer to a lesser extent. In the past five years, Japan’s working population has decreased by 4.3%, and is expected to shrink another 5.1% in the next five years.

As for the other places, fortunately, the total working force is still increasing though the rate of increase is declining. For instance, China’s working population has gone up 4.2% in the past five years, whereas in the next five years this growth will probably come down to 1.2%. As for Taiwan, South Korea and Hong Kong, the work force is likely to start shrinking. In brief, the high-income countries in Asia are aging faster.

It’s the southeast Asian countries, and in particular Indonesia, Malaysia and the Philippines that can boast their demographic bonus. In these countries the working population, particularly the group between the age of 25 and 44, will continue rising in the 20 years to come. This age group is important not only because it sustains consumer demand but also because it sustains the growth of population.

The weight on public coffers

Of course, an aging population can be countered by allowing immigration. For example, the 15-24 demographic in Singapore has increased 22.4% in the past five years thanks to its immigration policy. All in all, Japan is the country that faces the most severe aging population issue.

But while a young population can confer advantages, it does not guarantee success. Productivity and growth also rely on the quality of technologies and the labor force. With the complementarities of superior innovation and advanced workforce training, an aging demography won’t necessarily represent a disadvantage. This is exactly what a lot of these governments’ policies are focusing on. Indonesia, Malaysia and the Philippines, for example, could further boost their growth if they could raise their expertise in education and high-tech.

The discrepancies of age in fact have an even greater direct impact on government spending, social consumption trends, and the technical factors of the financial market. From a fiscal point of view, an aging demography implies more public spending on medical care and social security. As far as consumption is concerned, advanced countries’ aging population groups in general enjoy higher spending power.

Nevertheless, in Asia, retirement and medical welfare account for a relatively lower proportion of GDP. Retirees’ income and consumption are determined by their personal savings so this might go up or down. To say which consumer goods will benefit or be harmed by the changing demography would require more bottom-up analysis in each country.

All in all, the industries where demand may go up, thanks to the aging population, are medicine, incontinence-related products, leisure activities, tourism, food and beverage, as well as anti-aging products. For instance, China’s sales of products that promise to stave off the effects of old age have already surpassed the United States'.

Robots in demand

Over the past decade, due to China’s strong economic growth, overall trade volume within Asia has increased greatly. Consumer demand due to demographic changes is increasingly being satisfied by enterprises from Asia itself. Take Japan for instance, it accounts for 84% of sales of Asia’s incontinence-related products. Besides, it is also leading in the development of robotic products to meet the needs of older persons. Meanwhile, Taiwan is actively seeking to become a robot manufacturing center while Chinese and South Korean total shipments of robots almost rival those of Japan.

An often overlooked factor is that in countries like Japan, an aging population may increase demand for certain types of financial products, particularly for assets that provide a stable revenue. Many retirees in Asian countries rely on their own savings to live on, so assets that preserve and increase value against inflation while also allowing a regular income will become more and more popular.

In the past few years, the financial market has been very volatile. This has motivated a lot of people to seek assets which can bring income. Even if the world’s economy once again returns to normal growth, the factor of an aging demography alone is already providing long-term technical support for financial assets that provide steady income growth. These assets can be physical assets or dividend-paying stocks or bonds giving fixed interest income.

Traditionally, Asians relied on their children to support them in their old age. More and more, Asia’s elderly will have to be capable of taking care of themselves; the lucky few may also manage to leave an inheritance to the next generation.

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7 Ways The Pandemic May Change The Airline Industry For Good

Will flying be greener? More comfortable? Less frequent? As the world eyes a post-COVID reality, we look at ways the airline industry has been changing through a pandemic that has devastated air travel.

Ready for (a different kind of) takeoff?

Carl-Johan Karlsson

It's hard to overstate the damage the pandemic has had on the airline industry, with global revenues dropping by 40% in 2020 and dozens of airlines around the world filing for bankruptcy. One moment last year when the gravity became particularly apparent was when Asian carriers (in countries with low COVID-19 rates) began offering "flights to nowhere" — starting and ending at the same airport as a way to earn some cash from would-be travelers who missed the in-flight experience.

More than a year later today, experts believe that air traffic won't return to normal levels until 2024.

But beyond the financial woes, the unprecedented slowdown in air travel may bring some silver linings as key aspects of the industry are bound to change once back in full spin, with some longer-term effects on aviation already emerging. Here are some major transformations to expect in the coming years:

Cleaner aviation fuel

The U.S. administration of President Joe Biden and the airline industry recently agreed to the ambitious goal of replacing all jet fuel with sustainable alternatives by 2050. Already in a decade, the U.S. aims to produce three billion gallons of sustainable fuel — about one-tenth of current total use — from waste, plants and other organic matter.

While greening the world's road transport has long been at the top of the climate agenda, aviation is not even included under the Paris Agreement. But with air travel responsible for roughly 12% of all CO2 emissions from transport, and stricter international regulation on the horizon, the industry is increasingly seeking sustainable alternatives to petroleum-based fuel.

Fees imposed on the airline industry should be funneled into a climate fund.

In Germany, state broadcaster Deutsche Welle reports that the world's first factory producing CO2-neutral kerosene recently started operations in the town of Wertle, in Lower Saxony. The plant, for which Lufthansa is set to become the pilot customer, will produce CO2-neutral kerosene through a circular production cycle incorporating sustainable and green energy sources and raw materials. Energy is supplied through wind turbines from the surrounding area, while the fuel's main ingredients are water and waste-generated CO2 coming from a nearby biogas plant.

Farther north, Norwegian Air Shuttle has recently submitted a recommendation to the government that fees imposed on the airline industry should be funneled into a climate fund aimed at developing cleaner aviation fuel, according to Norwegian news site E24. The airline also suggested that the government significantly reduce the tax burden on the industry over a longer period to allow airlines to recover from the pandemic.

Black-and-white photo of an ariplane shot from below flying across the sky and leaving condensation trails

High-flying ambitions for the sector

Joel & Jasmin Førestbird

Hydrogen and electrification

Some airline manufacturers are betting on hydrogen, with research suggesting that the abundant resource has the potential to match the flight distances and payload of a current fossil-fuel aircraft. If derived from renewable resources like sun and wind power, hydrogen — with an energy-density almost three times that of gasoline or diesel — could work as a fully sustainable aviation fuel that emits only water.

One example comes out of California, where fuel-cell specialist HyPoint has entered a partnership with Pennsylvania-based Piasecki Aircraft Corporation to manufacture 650-kilowatt hydrogen fuel cell systems for aircrafts. According to HyPoint, the system — scheduled for commercial availability product by 2025 — will have four times the energy density of existing lithium-ion batteries and double the specific power of existing hydrogen fuel-cell systems.

Meanwhile, Rolls-Royce is looking to smash the speed record of electrical flights with a newly designed 23-foot-long model. Christened the Spirit of Innovation, the small plane took off for the first time earlier this month and successfully managed a 15-minute long test flight. However, the company has announced plans to fly the machine faster than 300 mph (480 km/h) before the year is out, and also to sell similar propulsion systems to companies developing electrical air taxis or small commuter planes.

New aircraft designs

Airlines are also upgrading aircraft design to become more eco-friendly. Air France just received its first upgrade of a single-aisle, medium-haul aircraft in 33 years. Fleet director Nicolas Bertrand told French daily Les Echos that the new A220 — that will replace the old A320 model — will reduce operating costs by 10%, fuel consumption and CO2 emissions by 20% and noise footprint by 34%.

International first class will be very nearly a thing of the past.

The pandemic has also ushered in a new era of consumer demand where privacy and personal space is put above luxury. The retirement of older aircraft caused by COVID-19 means that international first class — already in steady decline over the last decades — will be very nearly a thing of the past. Instead, airplane manufacturers around the world (including Delta, China Eastern, JetBlue, British Airways and Shanghai Airlines) are betting on a new generation of super-business minisuites where passengers have a privacy door. The idea, which was introduced by Qatar Airways in 2017, is to offer more personal space than in regular business class but without the lavishness of first class.

Aerial view of Rome's Fiumicino airport

Aerial view of Rome's Fiumicino airport

Hygiene rankings  

Rome's Fiumicino Airport has become the first in the world to earn "the COVID-19 5-Star Airport Rating" from Skytrax, an international airline and airport review and ranking site, Italian daily La Repubblica reports. Skytrax, which publishes a yearly annual ranking of the world's best airports and issues the World Airport Awards, this year created a second list to specifically call out airports with the best health and hygiene standards.

Smoother check-in

​The pandemic has also accelerated the shift towards contactless traveling, with more airports harnessing the power of biometrics — such as facial recognition or fever screening — to reduce touchpoints and human contact. Similar technology can also be used to more efficiently scan physical objects, such as explosive detection. Ultimately, passengers will be able to "check-in" and go through a security screening anywhere at the airports, removing queues and bottlenecks.

Data privacy issues

​However, as pointed out in Canadian publication The Lawyer's Daily, increased use of AI and biometrics also means increased privacy concerns. For example, health and hygiene measures like digital vaccine passports also mean that airports can collect data on who has been vaccinated and the type of vaccine used.

Photo of planes at Auckland airport, New Zealand

Auckland Airport, New Zealand

Douglas Bagg

The billion-dollar question: Will we fly less?

At the end of the day, even with all these (mostly positive) changes that we've seen take shape over the past 18 months, the industry faces major uncertainty about whether air travel will ever return to the pre-COVID levels. Not only are people wary about being in crowded and closed airplanes, but the worth of long-distance business travel in particular is being questioned as many have seen that meetings can function remotely, via Zoom and other online apps.

Trying to forecast the future, experts point to the years following the 9/11 terrorist attacks as at least a partial blueprint for what a recovery might look like in the years ahead. Twenty years ago, as passenger enthusiasm for flying waned amid security fears following the attacks, airlines were forced to cancel flights and put planes into storage.

40% of Swedes intend to travel less

According to McKinsey, leisure trips and visits to family and friends rebounded faster than business flights, which took four years to return to pre-crisis levels in the UK. This time too, business travel is expected to lag, with the consulting firm estimating only 80% recovery of pre-pandemic levels by 2024.

But the COVID-19 crisis also came at a time when passengers were already rethinking their travel habits due to climate concerns, while worldwide lockdowns have ushered in a new era of remote working. In Sweden, a survey by the country's largest research company shows that 40% of the population intend to travel less even after the pandemic ends. Similarly in the UK, nearly 60% of adults said during the spring they intended to fly less after being vaccinated against COVID-19 — with climate change cited as a top reason for people wanting to reduce their number of flights, according to research by the University of Bristol.

At the same time, major companies are increasingly forced to face the music of the environmental movement, with several corporations rolling out climate targets over the last few years. Today, five of the 10 biggest buyers of corporate air travel in the US are technology companies: Amazon, IBM, Google, Apple and Microsoft, according to Taipei Times, all of which have set individual targets for environmental stewardship. As such, the era of flying across the Atlantic for a two-hour executive meeting is likely in its dying days.

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