[Senior Trend] The Dawn of the Business War Chasing Opportunities in Aging Population

Last summer, I introduced various attempts by senior startups through a senior trend column. It was a case in the active senior business sector, the third act of life. It is a market still in its infancy, as it requires health and money and is based on preferences. The market is indeed large. The main age groups in our country are concentrated here. According to the Ministry of the Interior and Safety's survey, as of the end of 2023, the total population registered in the resident registration statistics is 51,325,329. The distribution is 6.49% under 10 years old, 12.07% in their 20s, 12.81% in their 30s, 15.44% in their 40s, 16.94% in their 50s, 14.87% in their 60s, and 12.31% aged 70 and above. Starting from the 40s, which is the benchmark for middle-aged and older adults, a whopping 60% are seniors. It is difficult to categorize active seniors by age, but roughly it is around 40%. The Center for Age-Friendly Convergence Research at Kyung Hee University also forecasted that “the domestic silver economy market, which was 27.3808 trillion won in 2012 (a combination of age-friendly pharmaceuticals, medical devices, food, cosmetics, nursing, leisure, and housing industries for the elderly), will grow at an average annual rate of 13% and form a huge market of 168 trillion won by 2030.”

As the market expands, corporate in-house ventures targeting this group are springing up like mushrooms, and some startups that have attracted large-scale investments are starting new businesses in the senior field by finding difficult connections. The enthusiasm is truly palpable. However, in reality, it is not easy to succeed commercially. Among active seniors, many live regardless of their age group and readily use services popular among people in their 20s and 30s. Everyone wants to secure a middle-aged fan base like trot singer Lim Young-woong and become a mega trend, but that path seems distant. Therefore, startups targeting seniors in the third act of life must either compete directly with traditional strong players in existing business areas or provide increasingly specialized services through segmentation.

The care sector that comes after the vibrant middle-aged period has a different nature. Immediate help or services are urgently needed. Since it is in the welfare field, it falls within government institutional frameworks. Standardization is somewhat possible, making it relatively easier to achieve economies of scale. There are three major areas related to the approach and interpretation of “problems that need solving.” In the 2024 edition of “Trend Korea,” published annually by Professor Kim Nan-do, three care businesses were presented as a new paradigm in our recently slowing economy. First is considerate care, exemplified by senior wearable robots like “Botfit” and AI nursing services like “Care Angel” in the elderly and caregiving sectors. Second is emotional care, including AI robots like “Parents’ Love Hyodol,” hospital accompaniment services like “Please Take Care of Mom,” and care services through AI speakers for the elderly. Third is relational care in daily life, such as Maeil Dairy’s “Milk Check-in,” which not only provides protein that seniors may lack but also checks well-being based on the number of accumulated milk cartons.

Last month, the nursing care startup “Caring” achieved a total accumulated investment of 75 billion won, the largest scale in the elderly care service industry. Founded in 2019, its sales last year reached 34.1 billion won, more than triple the previous year’s 11.3 billion won. It started with long-term care (home care, day and night care, home bathing, home nursing) but has expanded its business areas comprehensively to commerce (welfare supplies, group purchases, private brand product sales), senior housing (operating senior residences), and nursing care worker training centers. With the recent 40 billion won investment, it plans to acquire local home care companies and secure infrastructure through regional hub centers. The long-term care insurance market for the elderly is estimated by the investment industry to be in the 13 trillion won range and is expected to exceed 20 trillion won around 2030, which enabled this investment decision. The market clearly exists already.

Meanwhile, “Caredoc,” which provided caregiver matching services, received a total investment of 31.5 billion won by last year. Since its establishment in 2018, it has operated various businesses such as home care services and home care centers. Recently, it has been actively promoting senior housing projects and plans to secure senior residential spaces totaling 20,000 households nationwide and build a nationwide care workforce supply network by 2030. There is also the “Korea Senior Research Institute,” established in 2019, which has attracted a total of 12.3 billion won in investments. It develops automation software for care institutions and operates home care services and nursing care worker platforms. All three companies that have attracted over 10 billion won in investments have CEOs in their 30s. They view the care business as an emerging market and approach problem-solving from a new perspective. Other areas include dementia prevention and management, senior medication management services, emergency safety services for elderly living alone, and hospital-related services.

Although the senior business sector has particularities that make it difficult to apply the traditional startup formula directly, capital and talent are flowing in. It is unknown who will gain a monopolistic position in which market, but in any case, a large market is opening. Whoever becomes the winner, I hope it will be in a direction where people can receive humane services even as they age.

Lee Boram, CEO of Third Age