KEY POINTS:
TOKYO - Want to set up a sushi bar at your funeral? Talk to John Kamm, an American entrepreneur aiming for a slice of Japan's $10 billion funeral industry.
Kamm helps people set up their own burials for a fee. Most choose simple Buddhist ceremonies, but some order
food buffets for mourners and pick their own karaoke music for the funeral service.
"There are a lot more people dying but there are a lot more companies springing up," said Kamm, 35. "They are keeping up with the ageing population growth.
The funeral industry is one of many sectors that envisages big profits in catering to the elderly in the world's greyest country.
But getting Japan's elderly to spend their yen is the main challenge to win a share of this potentially lucrative market.
The older generation relies on fixed pension incomes and earns a third less than the average household, so it tends to be pickier and more discerning in its purchases than youngsters.
"Cash flow definitely decreases for the older generation. So from a business' point of view, the key is how much they can make consumers use their savings," said Junya Morizane, an economist at Fukoku Mutual Life.
Even baby goods makers like Pigeon are venturing into the elderly care business. Pigeon - which makes diapers for incontinent adults - aims to increase sales to the elderly by a quarter by 2008.
Convenience store operators Seven & I Holdings and Lawson are targeting Japanese consumers like Masae Sasaki, a 76-year-old widow who lives alone in the countryside about 100km northeast of Tokyo.
The stores have started to take orders and deliver groceries to pensioners, who tend not to own cars. "I can't drive, so if [delivery] services were available, it would be useful," Sasaki said.
Like most pensioners, though, Sasaki wants the service at a bargain price.
"It has to offer a similar selection of products to supermarkets at similar prices," Sasaki said. "Otherwise, I would probably not use it."
The Miyanokawa shopping district association in Saitama prefecture, north of Tokyo, represents a group of neighbourhood retailers who are adapting to the demographic shift.
The association launched a service in August to deliver goods or services, from hardware to haircuts, from its 120 member shops to customers' homes for a fee.
The group plans to add a service to check up on elderly singles and provide them with companionship, since fewer people live with their ageing family members than in the past.
"There will be more and more people who won't be able to drive. Unquestionably, needs are there," said Kenichi Shimada, the head of the group.
Japan's greying population is forcing many industries to re-examine the way they do business. Convenience store Lawson has refurbished some of its stores to create sitting rooms and massage chairs for elderly people to meet and changed its range so that it offers more products for the elderly, such as hair dye.
On the funeral industry front, photo processing service provider Asukanet sells digitally modified portraits or short movies of the deceased.
Another company, unlisted I-Can, lets customers visit relatives' graves via the internet where they can place "virtual" flowers, light candles or even clean the tombstone.
Kamm, for his part, aims to be a leader by offering what he calls "pre-need" services - prearranged and prepaid funerals.
"We know we're going to make money," said Kamm, who predicts that four or five big funeral companies will eventually dominate the market in Japan.
The Setting Sun
* 25 million people out of Japan's 127 million population are 65 or older amid increasing life expectancies and record low birth rates.
* Around 36 per cent - or some 40 million people - will be aged 65 or over in 2050.
* By 2050 Japan expects to have the world's largest proportion of pensioners - around 36 per cent compared to 21 per cent in the United States and 31 per cent in Germany.
- REUTERS
