Cambodia’s demographics are fundamentally changing. According to government statistics, the elderly population is growing.
In early 1998, senior citizens were a relatively small proportion of the country (5.2 per cent, or 600,000), but this demographic will considerably increase in the coming years.
One UN estimate projects an increase in the size of the elderly population from 1.1 million in 2015 to around two million in 2030.
The Ministry of Health has contended that by 2050, one in five Cambodians (21 per cent) will be over 60.
While certainly a challenge to Cambodia, this also presents an opportunity as a new market with growing demand develops.
Up to this point, investors have largely focused on the Kingdom’s traditional sectors, ie: construction, real estate, textiles, hydropower, education, etc.
Little attention has been paid to the senior market in Cambodia, in stark contrast to the number of small- and medium-sized enterprises catering to the demand from the Kingdom’s youth.
To date, there are very few private firms focused on serving the elderly, yet there are reasons to be confident that businesses serving seniors are likely to be profitable and sustainable as the demand for products and services for the elderly is already high despite the absence of firms to meet this steadily increasing demand.
Why is demand in this sector so high? The key drivers lie in Cambodia’s labour market changes and higher living standards, leading to greater purchasing power within the population, particularly the growing urban middle class.
Elder care norms changing
Cambodia’s economy has made remarkable progress in recent years, with average growth rates of seven per cent annually owing to political stability and an influx of foreign investment.
Cambodia has thus become a lower-middle-income nation with an elderly market. According to the World Bank, Cambodian purchasing power parity increased to $4,354 last year from just $2,355 in 2008, supporting the expansion of a burgeoning middle class.
Cambodian migration has also been rising substantially.
Some two million Cambodians (around 12 per cent of the total population) have reportedly migrated to work in other countries.
These migrants sent home $1.4 billion in remittances to help their families and parents last year.
That figure is generally expected to increase in the coming years.
At the same time, a majority of the workforce in the country has also migrated internally – working and living in other provinces and cities.
Both inside and outside the country, working Cambodians are separated from their ageing parents, altering traditional norms of elder care.
With longer working hours and, among middle-class Cambodians
in the capital, longer commutes, providing proper care and support for ageing parents is becoming a challenge.
Cambodia’s middle class in particular is eager to access private care services and purchase products for their parents.
In the Cambodian context, there are huge gaps in supply for long-term elderly care centres, non-medical in-home care, senior care consulting, fitness and nutrition consulting, medical-claim assistance, home services and home remodelling services.
So far only a few elderly services have been established, such as the Preah Sihanouk Raja Geriatric Centre and the privately run Vissar Elderly Care, but the supply side appears to be too small in light of growing demand.
At the same time, the policy environment for conducting the aforementioned businesses has also begun to develop.
The government has certainly paid significant attention to the elderly, in the form of the National Ageing Policy 2017-30, of which Prime Minister Hun Sen said: “The implementation of the policy calls for concerted efforts by the public and private sectors as well as civil society, development partners and the network of Older People’s Associations spread across the country [. . .] to help older persons obtain the quality of life they deserve for their lifelong participation in building the country.”
All things considered, investors should have their eyes on the silver market in Cambodia.
Firms should work in collaboration with the government to provide the growing number of elderly Cambodians with the services and products they need.
The government should more broadly disseminate information regarding silver market business opportunities in Cambodia to investors, particularly during public-private sector forums when the government meets with representatives of the private sector to discuss business challenges and potential.
This will help match investors with this overlooked but growing market.
Vorn Searivoth is a Young Research Fellow at Future Forum, a public policy think tank based in Phnom Penh. He is currently conducting research on ageing policy in Cambodia.