As there are over 140 million babies born every year around the world, diaper companies are one of the best investments one can make. However, this is no longer the case in Japan.

Surveys show that average parents will use about 3,000 diapers in their baby’s first year of life. Therefore, the diaper business is usually booming across the world. However, Japanese diaper companies are not seeing a rise in sales. Instead, there is a significant drop that is causing them to venture into other areas in the diaper business, such as adult diapers.

The Asian country has been seeing a steady decline in the number of births. In 2023, Japan hit a record-low birth rate with only 758,631 births. Over the past eight years, the country has been seeing a constant decline in the number of births, with each year topping the last. Therefore, this poses a significant concern to the country’s future.

There are several reasons why the Japanese population is not increasing. One of the major ones is the young Japanese population. They have refused to have children and prefer to focus on building their careers. Another reason is that they believe they cannot afford to raise children in the current economic conditions. The increase in the cost of living is a major factor in this.

As the number of new births are decreasing, the number of older people are increasing significantly. According to a survey in 2023, 29.1% of the entire population is over 65. One in every ten people in the country is over the age of 80. Even the UN has recently named Japan the country with the world’s oldest population.

The problem of the decreasing birth rate is starting to show on an economic scale. Two giant corporations in Japan have stopped making diapers for infants. This is not a pause but a complete stop. In 2012, the country’s largest diaper company, Unicharm Corporation, ceased production. At the end of March 2024, Oji Holdings, another manufacturer, announced that they would not be producing any more diapers.

Oji Holdings released a statement saying, “The Group aims to transform its business portfolio by concentrating investments on businesses with high profitability and growth potential in order to increase corporate value. The current termination of the domestic disposable diaper business for children is based on this strategy.” However, the company is still making diapers but only for the older population.

As the older population keeps increasing, so does the need for adult diapers. Both companies decided to change their target audience for this reason. They realized that if 10% of the country’s population is over 80 years of age, adult diapers are in higher demand. What’s more, they were right. After switching solely to adult diapers, they have been highly successful.

Currently, Japan’s population is about 123 million, but this number is reducing significantly. From the end of 2023 to the start of 2024, the country’s population declined by 0.5% or 661,000. This was only in a few months. Therefore, experts at the World Economic Forum estimated that the country will see a huge shrinkage of 25% by 2060.

According to sources, almost 50% of the country’s workforce consists of people over the age of 70. This is a huge problem as the younger population should make up a higher percentage. Therefore, there will be greater labor shortages very soon as the older people will retire and there will be nobody to take up these jobs soon, causing a problem in the economy.

Japan’s Ministry of Health, Labor, and Welfare is also worried about who will care for the next generation of elderly people. According to a report by the government body, the number of elderly citizens that require care will be tripled by 200. This is based on the current estimate of more than 690,000 enior residents today. Therefore, if the number of younger people keeps reducing? There will be fewer people to take care of the older ones.

Japan’s prime minister, Fumio Kishia, is quite aware of this ongoing problem and is trying his best to seek solutions. He also explained in 2023, saying, “Japan is standing on the verge of whether we can continue to function as a society. Focusing attention on policies regarding children and child-rearing is an issue that cannot wait and cannot be postponed.”

In March 2024, the prime minister told the press, “[The] last chance for us to reverse the declining births is before the young population is expected to decline drastically in 2030.” Therefore, this means that if the situation remains the same over the next couple of years, the economy will be hit big time. However, adult diaper manufacturers will continue to thrive and likely make even more profit.