Wednesday, September 5, 2012
Businesses Focus on Region's Aging Population
Using a moisture sensor, a wireless system and a mobile phone, Kevin Wong, the chief executive of Ckicom Technology Ltd, explains how this new technology can alert caregivers when they should change the diapers of elderly people in nursing homes.
As the rapid aging of Asia's population creates challenges for governments and societies, new opportunities are emerging for businesses serving the needs of the elderly and their caretakers.
While population aging is a global phenomenon, the Asian-Pacific region is expected to see a particularly drastic demographic change over the next few decades. The number of elderly persons in the region—already home to more than half of the world's population aged 60 and over—is expected to triple to more than 1.2 billion by 2050, when one in four people in the region will be over 60 years old, according to the United Nations Economic and Social Commission for Asia and the Pacific.
Across Asia, large corporations and entrepreneurs in various industries are racing to come up with new products and services for the elderly, while health-care-related businesses are seeing soaring demand. Among various fields of health care for the elderly, nursing homes represent one of the fastest-growing sectors.
Pedestrians in Tokyo last week, where one-third of the population is forecast to be over 65 by 2030.
In Japan, companies that previously had little to do with the issue of aging have jumped on the bandwagon. In 2005, Watami Co., which operates Japanese-style izakaya pubs serving food and drinks, entered a new business of running nursing homes. In the most recent fiscal year, the nursing business was more profitable than its izakaya business. Demand for Watami's new business is robust because Japan's population is the world's grayest, according to a 2009 United Nation report, with nearly 30% aged 60 or older.
Other parts of Asia, such as China, Taiwan, Hong Kong, South Korea and Singapore, are also anticipating a surge in the percentage of elderly citizens. In China, people over the age of 60 now account for 13.3% of the country's population of 1.34 billion, up from 10.3% in 2000, according to the National Bureau of Statistics, and the aging trend is expected to accelerate.
In January, China's state-run Xinhua news agency wrote about challenges facing nursing homes, saying "there are simply not enough nurses or beds to accommodate the country's elderly population."
In March, Christine Lagarde, the managing director of the International Monetary Fund, said at a forum in Beijing that the country needs to take more steps to cope with a rapidly aging population in the years ahead.
Despite varying levels of infrastructure and support from governments, the global market for nursing and health-care services continues to expand, and expectations are rising for businesses that might meet the growing demand.
Last month, IHH Healthcare Bhd., Asia's largest hospital operator by market value, staged a strong trading debut in Malaysia and Singapore, after raising US$2 billion in its initial public offering, the world's third-largest IPO this year.
Analysts said that population aging in Asia and the rest of the world makes IHH a good long-term investment.
Given the opportunities in the market for hospitals and nursing homes, some technology entrepreneurs are focusing on products and services they could sell to health-care institutions.
Kevin Wong, an engineer from Guangzhou, China, has developed a new product that he thinks will appeal to nursing homes and hospitals. His Hong-Kong based start-up, Ckicom Technology Ltd., sells a disposable adult diaper equipped with a moisture sensor and a wireless system that sends wetness alerts to nursing-home workers via personal computers and mobile phones.
A small clip-on sensor device attached to the diaper detects moisture through special carbon ink prints on the diaper's inner surface and sends the information wirelessly to PCs and mobile phones. The clip-on device isn't disposable.
Each disposable diaper costs US$1.20 or less, and nursing homes also need to purchase or lease the wireless system including the clip-on devices. For a nursing home with 100 beds, for example, the system would likely cost US$5,000 to US$10,000, the company said.
Ckicom's CAREase diaper, one of the 12 finalists competing for The Wall Street Journal's Asian Innovation Awards, can detect wetness at three different levels, eliminating the need for workers to repeatedly check residents' diapers just to see whether they need to be replaced. "It helps nursing homes upgrade their services," Mr. Wong said.
Mr. Wong, 50 years old, came up with the idea of a wetness-sensing diaper for babies more than 30 years ago, during a classroom discussion at the South China Institute of Technology. He never pursued that idea and instead worked for much of the past three decades at a company that develops consumer-electronics products.
Five years ago, one of his college classmates, who lived in the U.S., called Mr. Wong and reminded him of the moisture-sensing diaper idea, which Mr. Wong himself had forgotten about. The friend said that nursing homes for the elderly would want such a diaper.
After conducting research for almost a year, Mr. Wong quit his job and started Ckicom in 2008 to develop the diaper in a project partially funded by the Hong Kong government.
The challenge was to create a comfortable diaper that can accurately determine wetness levels, while keeping the cost reasonable, Mr. Wong said.
The potential market is growing, as Hong Kong expects the percentage of its population aged 65 and over to increase to 26% in 2036 from 12% in 2006, according to the Census and Statistics Department.
Five nursing homes in Hong Kong are now testing the CAREase diaper, while the company's Taiwanese distribution agent has recently received orders for 100,000 diapers.
Ckicom also has set up an office in Tokyo.
The closely held company forecasts revenue of about US$1 million in the current fiscal year through March.
While Hong Kong, Taiwan and Japan are its main markets for now, the company wants eventually to expand into the U.S. and Europe as well as mainland China, Mr. Wong said.