At SERI this morning I came across a report that caught my eye, so let me organize a few points.
Reports on single-person households are nothing new. Even 15 years ago?, news outlets frequently introduced "single-person households are growing" and "related businesses are rolling out" as if it were a hot trend.
As always, the market is moving this time too. As always, this time is a bit different. The proportion of the economic population has actually flipped, and the share has grown to about 1/4 of the total population. (<- see the report content below)
What stands out in particular is not just the rise of single-person households, but that more than half of them are in their 50s and 60s — and that most of them make a living through simple manual labor, which was quite a shock.
If (1) most 20–30-somethings in specialized professions earn a lot but have few assets, or have little economic activity shared with their parents, and (2) most 50–60-somethings in simple labor have low income and few assets, or have a large portion of economic activity shared with their children, then the overall level of surplus being held will decrease. Low surplus under abundant economic conditions could be a utopia, but if surplus shrinks under less favorable conditions, wouldn't individuals' dispositions become harsher?
So, considering that assets and income are clearly different — though it won't be easy — personally I wish we could see the share of actual economic activity rather than simply the share of household composition.
(Excerpts from the report-)
The share of single-person households in Korea in 2019 is projected to reach 29.1%. This goes beyond a change in household structure — it's a shift in the consumption subject itself, causing changes across various industries. In the retail sector, small-package food and home meal replacement markets are growing rapidly, and home appliances are becoming smaller, slimmer, and multi-functional. Subscription services for daily goods continue to expand and grow, and the card industry is also launching card products targeting single-person households.
When we understand several key characteristics of single-person households, corporate strategic approaches become possible.
First, the 2015 single-person household share breaks down as 60s (34.0%), 20s (16.9%), 30s (17.3%), 40s (14.5%), 50s (16.1%).
Single-person households aged 60s and above: 2000 31.3% → 2015 34.0% → 2035 53.7%, an increase.
20s over the same period: 23.3% → 16.9% → 10.6%, a decline.
Second, single-person households' occupational distribution varies significantly by age group.
Single-person households aged 60s and above are most concentrated in simple labor.
Single-person households in their 20s and 30s are most concentrated in professional/office jobs.
Third, single-person households are rising sharply due to being unmarried or divorced.
Unmarried single-person households grew at an average annual rate of 6.8% from 2000 to 2010.
Divorced single-person households grew at an average annual rate of 9.8% over the same period.
Single-person households are also very interested in wealth-building and retirement preparation, but they often rely on non-expert knowledge rather than professional help, so there's a need to develop active financial support services — product development, calculating required funds, insurance enrollment — targeted at them.
Source: (DIGIECO) Economic/consumption trends led by 'single-person households', 2019.01.30
Kim Kwang-seok, Adjunct Professor at Hanyang University Graduate School of International Studies (gsk@hanyang.ac.kr)
