Vietnam’s Silver Economy – A Potential Market Being Overlooked

The economic sector serving the elderly, also known as the “silver economy,” is becoming a new growth engine in many countries around the world, including Vietnam. According to United Nations estimates, by 2030, people aged 50 and over will account for 32% of the total population in the Asia-Pacific region. In this region, the “silver economy” market is projected to reach a value of approximately 4.6 trillion USD by 2025, serving 600 million people over the age of 60.

Overview of the Aging Population Trend in Vietnam

According to the population projections for Vietnam for the period 2019 – 2069 by the General Statistics Office, Vietnam is one of the countries with the fastest aging population rate in the world. By 2036, the country will officially enter the period of an aged population, transitioning from an “aging” society to an “aged” society.

Source: General Statistics Office (2020)

The projection also shows that this trend will continue to increase rapidly, and by 2038, the population group aged 60 and over will reach about 21 million people, accounting for 20% of the total population, meaning that for every 5 (five) people, there will be 1 (one) elderly person. By 2039, it is projected that the number of elderly people in Vietnam will exceed the number of children. In addition, the working-age population is beginning to decline, and this fluctuation may have an impact on economic development.

Compared to other ASEAN countries, since 2000, Vietnam has had the third-highest proportion of elderly people, after Singapore and Thailand. By 2035, with the elderly making up nearly 20% of the population, Vietnam will be the third fastest-aging country in the ASEAN region.

Projected Market Demand for Products and Services for Elderly Care

In Vietnam, experts assess that the spending power of the elderly is increasingly improving, with income sources from pensions, savings and investments. The spending ability of the elderly depends on their level of financial stability and personal financial planning. In recent years, elderly Vietnamese people have tended to shift their spending habits more towards health, travel, education and entertainment. It can be said that the aging population and the specific characteristics of the elderly in Vietnam pose many socio-economic challenges but also present a “golden opportunity” for Vietnam to develop the “silver economy”.

A research report on the market for care services and products (pharmaceuticals, assistive devices) for the elderly conducted by the Vietnam Chamber of Commerce and Industry (VCCI- HCM) with the support of the United Nations Population Fund (UNFPA) in 2021 assessed this as a potential market. According to Data Bridge, this potential market will have an annual growth rate of up to 7% in the period from 2020 to 2027, and it is forecast that this market will be worth 1.944 trillion USD by 2027. The factors driving this significant growth are population aging, the increasing rate of chronic diseases among the elderly, and better awareness of home-based elderly care services. The report also forecasts an annual growth rate (2020-2027) of 7.7% for the Asia-Pacific region.

The market for services for the silver age population is very promising, especially for potential customers whose main concerns are physical health and mental well-being. According to Prudential’s 2020 survey on independent living in old age with respondents aged 30-45, for them, physical health is the top concern (59%), followed by mental health (30%), and finally, finances. An estimated 85% of respondents want to live independently in their old age. Notably, this rate is even higher among those who are most concerned about finances in old age (95%). This will be a challenge as only 40% of respondents plan for old age before the age of 45. In the next 15-20 years, these people will be potential customers for elderly care services.

According to various analyses from statistics and other research reports, with the increasing number of elderly people, the demand for healthcare services will be the top priority, followed by independent living (community care), and then services to enhance mental well-being. The report is expected to specify needs, update according to social and cultural trends and changes, and suggest opportunities for providing services to this potential market. Industry experts also believe that investing in the elderly product and service market in the coming time will be a high-growth area. The trend of an aging population in countries is increasing, which means that the demand for elderly care services will be very high. In addition, the income of many Vietnamese families is improving, and the elderly desire to enjoy a high quality of service in their old age.

Opportunities from the “Silver Wave”

With the dual goals of improving the quality of life for the elderly and ensuring their autonomy for as long as possible, the “silver economy” impacts many sectors of the economy: entertainment, transportation, food, security, healthcare, housing, insurance, digital services, and more. According to expert research, the silver economy can create opportunities for investment, entrepreneurship, and job creation in areas such as:

• Healthcare: As age increases, the need for medical services, hospitals, nursing homes, home care services, and specialized medical products and equipment for the elderly becomes more essential
• Real Estate: Specialized housing products and services, long-term care centers, nursing homes, and senior-friendly resorts will be among the investment portfolios of focus.
• Education and Training: Lifelong learning programs, skills training, and vocational training so that the elderly can continue to participate in the workforce and enjoy life are essential.
• Leisure and Entertainment: Tourism, recreational activities, cultural and artistic events, sports, and social clubs for the elderly to interact, socialize, and gain experiences are prioritized.
• Technology: Smart devices based on AI, mobile applications, virtual assistants, and support robots help improve the daily lives of the elderly. According to one study, the global market for “senior-friendly high technology” will reach 82 billion USD by 2030. This is forecast to be an area that offers many investment opportunities today.
• Financial Services: Health insurance, nursing care insurance, retirement savings, personal financial advice and investment, and asset management for the elderly.
• Food and Nutrition: Food products and dietary supplements specifically designed to meet the nutritional needs of the elderly.
• Transportation: Transportation services, vehicles that are easy to operate, accessible, and suitable for the elderly, along with mobility support applications.
• Labor and Employment: Policies to encourage employment for the elderly, provide part-time job opportunities or professional consulting, helping them continue to contribute to the workforce.

Thus, the scope of the silver economy encompasses all aspects of the lives of the elderly. This creates both opportunities and challenges for each country in proactively planning and developing a silver economy that suits its specific conditions.

Some Examples:

Regarding nutritional products, many businesses have seen the potential and opportunity to produce products serving the needs of the “silver” economy, but this is still on a small scale. According to Mr. Zubin Trikha, Head of the Specialized Nutrition Category at Nestlé Health Science Vietnam, Vietnam’s aging population trend is opening up significant opportunities to develop products and services suitable for the elderly. With improvements in healthcare and living standards, the elderly population in Vietnam is increasing both in size and purchasing power. Furthermore, Vietnamese cultural values emphasize caring for elderly family members, making families willing to invest in products that improve the comfort and health of their elderly relatives. Therefore, the potential for growth in this category is enormous in the coming years.

Regarding the real estate market, many large real estate businesses have quickly grasped the market. In March 2024, Vingroup officially signed a cooperation agreement with Well Group (Japan) to develop a world-class model of healthcare centers for the elderly in two forms: daytime elderly care and long-term elderly care (nursing homes). This includes a high-end elderly care model at the Vinhomes Ocean Park 2 urban area (Ocean City, Hanoi). Along with researching and implementing the long-term elderly care model, Vingroup is also planning to expand the scale and replicate the model across the entire chain to add high-end nursing homes to the list of “exclusive privileges only available at Vinhomes”.

In early August 2024, in Ha Nam, Sun Group also officially launched the Sun Urban City mega-urban project, modeled after a suburban resort urban area with 1,001 amenities, where the elderly receive comprehensive healthcare with a specialized nursing home and hospital, and a large space for walking, gathering with peers and children and grandchildren. However, according to experts, these facilities only meet the needs of a very small portion of the elderly in urban areas, while the demand for products and services in the “silver-haired” market is still quite large.

Population aging is clearly a major and urgent issue, directly affecting the economic development of countries as well as the quality of life of people. However, along with open policies and advances in science and technology, the elderly can live healthy, happy, and useful lives, contributing positively to the overall development of society, especially when countries proactively adapt to the period of population aging and proactively seize the opportunities of the “silver wave.” In Vietnam, the demand for the elderly service market is very promising, with 20 million “potential customers” by 2035. These are important resources contributing to the country’s development because they are a valuable labor force with a wealth of experience, and at the same time a very large consumer force, creating momentum for production and business activities to develop.