IN A LAND WHERE the nearly septuagenarian Amitabh Bachchan rules showbiz and sizzles on weekly quiz shows, 74-year-old Anna Hazare is the biggest social icon, 75-year-old Ratan Tata runs the largest business empire, and 84-year-old L.K. Advani is limbering up for prime ministership, old age must be a state of mind. Seriously, who said ours was a nation for the young? There are nearly 80 million 60-pluses in the country today. By 2025, that’s set to rise to over 170 million. By comparison, there are 76 million baby boomers (those born between 1945 and 1964) in America. Double that and it will still be 18 million short of India’s population of retirees in 2025, when the last of the baby boomers cross over to 60. How’s that for a market?
What makes our senior citizens a compelling business proposition is not just their sheer number, but a gripping mix of several other factors juxtaposed against the India growth story. Having lived most of their working life in de-licensed India, the wallets of these grandfathers and grandmothers are fatter than ever. The person retiring in 2011 will have spent more than half his work life—or nearly 20 years—in an India where there were opportunities to earn more than any previous generation had post independence.
Going forward, the additional 90 million 60-pluses will be better off still, having worked even longer in post-liberalised India. In the backdrop: India’s rise to become the world’s third-largest economy by 2025. Goldman Sachs expects that between 2007 and 2020, India’s gross domestic product per capita in dollar terms will quadruple.
Indians will also be living longer. Life expectancy is set to rise from 67.2 years in 2006-10 to 71.9 years in 2021-25 for men and from 71 years to 74.9 years for women. But given that there will be plenty of youngsters working, the dependency ratio—the ratio between the non-productive part of the population (over 59 years) and the productive (15 years to 58 years)—will work in their favour, increasing the spending power of both retirees and their children.
It isn’t just macroeconomics that makes this segment fascinating. Other factors, from migration to cities to the increasing number of nuclear families, will also prime this audience for increased targeting of goods and services.
The notion of ageing is also changing globally, with more and more people behaving as if old age never existed. It’s a world populated with Dorian Grays and India is, increasingly, no exception.
“For a number of these people, the propensity and ability to spend will be limited. But because the numbers involved are huge, there will still be a large market to target. And that will only increase with time,” says Leela Visaria, demographer and honorary professor at the Gujarat Institute of Development Research.
THE GRANDPA ECONOMY (or grandma economy, if you will) is already beginning to take shape, with headhunters, housing companies, fitness chains, e-commerce outfits, tech startups, and tour operators vying for a piece. (Sectors such as pharmaceuticals and hospitals have traditionally benefited from grey demographics.) It is difficult to put a number to the size of the opportunity. Census data, the most authoritative, doesn’t provide age-wise segmentation of the business potential. But those who are building businesses around the idea tend to characterise it in superlatives.
The most visible manifestation is the housing projects coming up. Ashiana Housing, a Delhi-based real estate firm, has sold 900 houses meant for senior living in Bhiwadi, about 50 kilometres from Delhi. Five hundred more are being built in places such as Delhi, Jaipur, and Lavasa near Pune, each priced between Rs 13 lakh and Rs 80 lakh. These houses come with anti-skid tiles, safety handles in toilets, eye-level switchboards, and, sometimes, common dining areas.
Ashiana’s joint managing director Ankur Gupta has a postgraduate degree in real estate from New York University where his specialisation was residential projects for senior citizens. “I think the market potential is humungous. The basic concept of senior living is about being active and interacting with people. Studies in the U.S. have shown that those who live in retirement homes live up to 23% longer. It is also a better life,” he says—and that is Ashiana’s pitch to customers. He adds that at least Rs 400 crore has already been pumped into senior living projects across India, with the promise of more to come.
The U.S. has also been inspiration for doctor-turned-businessman Prasad Koneru, managing director of Rakindo Developers, who is building 300 senior living units in the Kovai Hills integrated township near Coimbatore. “The emphasis is always on quality of life. I want to make sure that the quality of senior life in the U.S. can be replicated here,” he says. The project is scheduled to be launched early next year. Homes can either be bought for between Rs 35 lakh and Rs 80 lakh or leased for an initial refundable deposit of Rs 7 lakh, followed by monthly payments upward of Rs 20,000 for rent, food, and other expenses. Once he is through with this project, Koneru wants to launch million-dollar retirement homes at Kovalam in Kerala.
Saumyajit Roy, vice president, social infrastructure practice (education, health care, senior living), of real estate consultant Jones Lang LaSalle India, says: “These living spaces are designed for the aged and their day-to-day needs.” They no longer have to worry about daily household errands, paying bills, security issues, or timely medical treatment. They can opt for an active lifestyle and utilise their time in recreational activities, companionship, and social work.
These projects are also successful because the social stigma associated with old-age homes is slowly morphing into more modern, evolved concepts of retirement homes or senior living. In some ways, this shift is inevitable. While India is generally considered to be a showpiece of the joint family system, the fact is that more than 60% of households are nuclear. With migration being a major theme in the country, this number is set to grow. That has serious implications for senior citizens as their children move far afield in search of jobs.
Abhimanyu Jain, 61, who worked at the Bhabha Atomic Research Centre and later at IBM and CMC, recently moved in to Ashiana’s Bhiwadi complex, and is a fan already. “Every day I meet everyone who’s living here, interact with them, either in the community area or the park. We also celebrate all the festivals and even have end-of-the-month parties.”
Indeed, if you think about it, what the likes of Gupta and Koneru are selling isn’t real estate, but independence and a life of dignity. (Jain says at Ashiana, folks like him are “pampered”.)
THAT MAY EXPLAIN WHY Hitesh Oberoi, managing director and CEO of jobs portal Naukri.com, believes that headhunting 60-pluses may be the next big opportunity for recruiters. Think of it this way: How many of the recently retired are content sitting at home, watching the sunset? The majority re-employ themselves as ‘consultants’ or, if they have held senior positions in India Inc., end up in non-executive positions on boards.
It’s difficult to put a number to how many retire every year, but P.V.R. Murthy, CEO at Chennai-based Exclusive Search Recruitment, says it may be around a lakh. These are white-collar workers who could be employed by the government, the private sector, in universities, etc.
Murthy, who has often placed superannuated executives, says the notion of a second career is particularly relevant in India. “The retirement age here, currently either 58 or 60, was fixed keeping in mind the low life expectancy of the past. But with all the advancements in health care and the increased standard of living, people remain active well into their seventies.” Moreover, a steady income takes the edge off inflation, from which emerging economies like India tend to suffer.
V.K. Vijaykumar, an investment strategist at Geojit BNP Paribas Financial Services is a case in point. After three decades as a professor of economics at a college in Thrissur, Kerala, he joined Geojit. He thinks of it as his second career, which allows him to stay busy, remain a part of the mainstream, and earn money.
Richard Hokenson, a consultant based out of Amsterdam, the Netherlands, who, among other things, is trustee at the Washington D.C.-based Population Reference Bureau, argues that seniors across the world want to stay active because of a fear of old age.
Hokenson applies demographics to economic and financial market forecasting and has studied how ageing affects markets. In the U.S., he says, 90% of those who are above retirement age want to continue working because they fear “they’ll lose it if they don’t use it. It’s no different in India.”
The challenge is in identifying employment opportunities. TeamLease chairman Manish Sabharwal says
among the most important roles that senior citizens can fulfil is mentoring startups and small companies. “That’s where they can be best used, especially in supervising startups in cities such as Bangalore, Hyderabad, or Gurgaon,” he says.
Goa and Andhra Pradesh already have programmes to redeploy seniors in the workforce, while in Bangalore, one hears of startups being mentored by seniors. But the potential hasn’t been fully explored. As Oberoi says:, “Do superannuated seniors want to work? Yes. Has anyone figured out how to tap into this talent? Not yet.”
MEET J.K. CHOPRA and J.K. Khanna. At 75, Chopra is older by four years. They have been friends for 42 years, and once ran competing artificial jewellery businesses in Delhi. For the past two and a half years, they’ve been coming together to Fitness First, a plush health and wellness centre, at Connaught Place. They pay close to Rs 3,500 every month because they want to feel healthy (and also to socialise). “I don’t need to see a doctor these days, not as much as I used to,” says Chopra.
While the medical fraternity may frown, such comments thrill the likes of Vikram Aditya Bhatia, managing director of Fitness First. He says that 5% of members are seniors, adding, “We don’t target them. They come because they’ve heard about it from others.”
Rival Talwalkars, on the other hand, has begun targeting the older population. Chief financial officer Anant Gawande says the best way to do this is to aim for the 50-pluses, who then continue using the facilities as they age. Around 35% to 40% of Talwalkars’ business comes from this group, who pay between Rs 13,000 and Rs 15,000 for a year’s membership.
This sense of carpe diem is new. And Bollywood has sometimes stoked it. Veena Patil, managing director of Mumbai-based Kesari Tours was inspired by Lage Raho Munna Bhai which showed senior citizens on a trip to Goa. The similarity doesn’t end there. The name of the package was also borrowed from the name of the elders’ retreat in the movie—Second Innings. The tours cost a bit more than other packages (better hotels, Indian food on demand, etc.) and the groups are often accompanied by Marathi actor Dilip Prabhavalkar, who played the role of Mahatma Gandhi in the movie. “While people sometimes buy these packages for their parents, most sales come from seniors buying for themselves,” says Mehul Shah, who handles marketing for Kesari Tours. Since the tours began in 2007, some 1,200 have been sold so far. Kesari charges Rs 30,000 to Rs 1.5 lakh per person, depending on the location. Shah says he would like to charge more, but “can’t because it’s a highly competitive segment”.
Tour operators love this segment. Kashmira Commissariat, chief operating officer, outbound division, Kuoni India, says: “They research the trip thoroughly, prefer long-haul flights, embark on more side excursions, and spend more than other groups.” According to the industry, 60-pluses comprise 15% of business, which is growing at 10% annually.
Two Bangalore sisters, Mary Chacko, an engineer who retired from Bharat Heavy Electricals, and Annamma Chacko, a doctor who retired from the Medical College in Thiruvananthapuram, exemplify the section. Every year over the past few years, they have bought tour packages costing as much as Rs 85,000 per person, and visited Europe, the U.S., West Asia, and China. “Now that we are retired, we have time to see places and travel. The best part about these packages is that you can see the world at your pace,” says Mary.
IT’S NO SURPRISE that financing such interests is also a promising area. Sure, you are well invested, but often inflation eats into much of it. So Star Union Dai-ichi has come out with a reverse mortgage product aimed at the 60-pluses. CEO Kamalji Sahay says it is aimed at senior citizens who are property rich but cash poor. Imagine someone who bought property in Bandra, Mumbai, in the 1960s or 1970s. According to Ashutosh Limaye, head of research and real estate service at Jones Lang LaSalle India, rates in Bandra have risen 200 times since 1969.
A reverse mortgage plan can help them benefit from the high prices now. The idea is simple: You sell your house to a bank or financial services company, which then pays you in instalments over your lifetime. “We have a customer in Delhi’s Defence Colony who earns as much as Rs 1.17 lakh every month, having reverse mortgaged his place,” says Sahay.
The number of takers, he admits, is small (70 at the moment), but with a marketing campaign soon, he says the company aims to do more than 500 such transactions next year.
Not everyone’s playing up the cheery side of ageing. Zicom, makers of electronic security systems, ran a television commercial in 2009, highlighting the risks of seniors living on their own and the need for security which, in their case, came from burglar alarms and closed circuit cameras retailing for Rs 5,000 to Rs 25,000. Anand Swaminathan, director of product and solution, Zicom, says: “Among all our ads, that was the one that had the highest recall because it showed a real threat to seniors. Everyone could identify with it.”
Similarly, Chennai-based Munoth Communications and Hyderabad-based iBall have elder-friendly phones with large keypads and screens, loud audio, a built-in torch, and FM radio. There is an SOS button which activates a siren and sends out a text to preselected numbers. The phone also displays a link to the user’s medical information.
The German government, in a report on the elderly, called this segment the silver economy. Marketers here see it more as a silver mine—and are gearing up to make the most of it. In their eagerness to exploit this market, they offer all sorts of aids to physical and financial security that often cater to a stereotype. And senior citizens, who resent this, choose not to buy. For instance, the elder-friendly mobile phones have seen little demand. For marketers who are both sensitive and smart, the opportunity is gold.