Japanese General Trading Companies' Silver Economy Strategy: Not Directly Entering Elderly Care, but Profiting from the Top of the Industry Chain (5 Insights for Chinese Companies)

Text | Silver Hair Finance

Japan’s aging population is one of the most severe examples worldwide.

Along with it comes a large, mature elderly care market—one that combines quasi-public services backed by policy with significant commercial opportunities. As the “ballast” of Japan’s economy, major trading companies like Mitsubishi Corporation and Mitsui & Co., with their capital, global networks, and resource integration advantages, should theoretically be the core players in this blue ocean.

However, an unusual phenomenon has emerged: after searching all publicly available information, you can hardly find any of these trading giants directly investing in, building, or operating elderly care homes and nursing facilities on a large scale.

They are not absent; rather, they have actively chosen to “step back”—avoiding direct operation of elderly care facilities and instead becoming enablers within the elderly care ecosystem.

This “selective action” behind their choice is rooted in the clearest business logic. Today, we will analyze the elderly care strategies of Japan’s five major trading companies, and more importantly, explore what practical insights this layout can offer to Chinese companies entering the elderly care sector.

First, understand: Why do the five trading companies avoid directly operating elderly care services?

To understand this rational “step back,” let’s first dissect the underlying logic of two core entities: what are the core capabilities of Japanese trading companies? And what are the unavoidable characteristics of Japan’s elderly care industry?

Clarifying these points helps explain why they consciously avoid the elderly care operation track.

Many people’s understanding of Japanese trading companies still stays at the level of “trading firms”—buying and selling goods for profit margins. But in reality, they have long surpassed simple trade, evolving into large multinational conglomerates that integrate trade, investment, finance, logistics, and project management.

Their core capabilities focus on four aspects:

1. “Trade + Investment” dual engines: not just buying and selling goods, but also investing in key upstream and downstream links of the industrial chain to control resources and stabilize supply chains. For example, Mitsubishi invests in liquefied natural gas projects in Brunei, tightly linking energy production and trade.

2. Global information network: branches worldwide enable real-time insights into market supply and demand, technological trends, and policy developments—core confidence for decision-making.

3. Strong financial and risk management capabilities: comparable to investment banks, providing financing support for large projects and handling various risks in cross-border operations.

4. Industry integration ability: skilled at acting as “organizers,” integrating resources across different industries, coordinating project development, and expanding markets—especially vital when helping Japanese SMEs “go global.”

More critically, their core strengths have long been concentrated in large-scale, standardized B2B fields—adept at “big business,” rather than “fine-tuned” operations.

After understanding the core advantages of trading companies, looking at the current state of Japan’s elderly care industry makes the mismatch clearer.

Japan’s elderly care development has been deeply intertwined with “policy imprinting” and commercial logic, characterized by four distinct features that also determine its high operational threshold:

1. Long-term care insurance as the core support. The 2000 “Long-term Care Insurance Act” defines the profit logic—main income for elderly care institutions comes from services reimbursed by long-term care insurance, giving it a strong quasi-public product attribute. Prices and service standards are strictly regulated by the government, making high-profit margins through free pricing nearly impossible.

2. Heavy focus on operations and manpower, with slim profits. Elderly care is labor-intensive, with human resource costs being the largest expense. Japan faces a serious shortage of caregivers, requiring meticulous, human-centered management—large investments and operational difficulty—yet profit margins remain low.

3. “Grounded” services that are hard to replicate. Japan has developed three major elderly care models—home-based, community-based, and institutional care—plus segmented services like day care and dementia care. The core is “localization”—deep integration into communities and binding with local medical resources. Such “tailored” services cannot be mass-produced or standardized like industrial products.

4. Diverse participants rather than monopolization by conglomerates. The main players are not traditional large conglomerates but healthcare groups, insurance companies, and real estate firms—originating from their core businesses. For example, Sompo Holdings, through acquisitions, has become one of Japan’s largest elderly care operators, forming an “insurance + services” closed loop.

Comparing the scale advantages of trading companies’ B2B model with the refined operational characteristics of Japan’s elderly care industry reveals a clear answer: they do not directly operate elderly care facilities. It’s not because they lack business opportunities, but because they are fully aware that this is not their “advantage track.” Fundamentally, there are three core “mismatches”:

1. Business model mismatch: trading companies excel at global, large-scale, standardized resource allocation and large investments, whereas elderly care operation emphasizes localization, refinement, and personalization—these organizational genes are fundamentally incompatible.

2. Profit expectation mismatch: trading companies are accustomed to high returns in energy and commodities sectors. Elderly care involves long investment cycles, low profit margins, and heavy policy influence, making it less attractive. More importantly, operational risks like caregiver shortages and service accidents are entirely different from the macro market risks they are good at managing.

3. Core capability mismatch: their global networks, trade skills, and financial advantages are almost useless in daily elderly care operations. Success depends on professional nursing, cost control, and community reputation—not global iron ore prices or international financial market fluctuations.

It is these three “mismatches” that lead the five trading giants to make rational choices: abandon the less suitable operational side and instead leverage their strengths in the peripheral and supporting aspects of the elderly care industry—becoming enablers of the silver economy rather than direct operators. Based on their core genes, they have also charted differentiated strategic paths.

The Differentiated Strategies of the Five Major Trading Companies

Although all avoid direct operation, the five trading companies are not absent from the elderly care industry. Instead, they leverage their core strengths to pursue very different entry paths.

Mitsubishi Corporation: From “Medical” to the “Behind-the-Scenes Supporter” of Elderly Care

Mitsubishi’s approach is clear: avoid elderly care operation, focus on their deep expertise in healthcare, extending into supporting services related to elderly care, becoming a “professional service provider.”

Specific strategies include three points:

1. Export medical management experience. Mitsubishi has long been involved in hospital management, with collaborations in China—such as establishing joint ventures with China National Pharmaceutical Group and working with Lenovo-backed Honghe Renai Medical to provide management consulting and outsourcing. It is also a shareholder in IHH Healthcare, Asia’s largest hospital chain. The core is exporting medical management expertise to elderly care institutions and related entities.

2. Become a “supplier + leasing” provider of medical and welfare equipment. This is their most direct approach into elderly care—through a dedicated business unit responsible for medical equipment procurement, as well as leasing and sales of welfare devices like nursing beds and wheelchairs. Asset-light, high turnover, perfectly aligned with their strengths in trade, logistics, and financial leasing. They do not serve the elderly directly but support thousands of elderly care facilities and home care families—like an upstream “arms dealer” in the industry chain.

3. Integrate the pharmaceutical supply chain. Using their global network, they engage in drug R&D, distribution, and supply chain management, providing backend support for elderly care facilities and hospitals.

Looking ahead to 2026, Mitsubishi will focus on three directions: deepening investment in medical technology (e.g., telemedicine, AI-assisted diagnostics), expanding overseas health markets (especially China), and building a “medical, pharmaceutical, and medical device” linked supply chain platform to offer one-stop solutions for elderly and medical institutions.

Mitsui + Sumitomo: Relying on “Finance” to Bind Insurance and Real Estate

The strategies of Mitsui and Sumitomo highlight “conglomerate synergy”—not directly entering elderly care, but relying on their financial sectors within the conglomerate to drive “financial-led” development, centered on “insurance + elderly care.”

As early as the 1990s, Mitsui Sumitomo Insurance Group (MS&AD) established dedicated companies providing paid elderly care homes and home nursing services—classic “insurance + elderly care” integrated models, similar to Sompo Holdings.

Their core tactics include three points:

1. “Insurance + Service” closed loop. By operating elderly communities and service networks, insurance companies gain stable investment returns and provide value-added services to policyholders—covering health management, disease prevention, and long-term care—forming a complete cycle that enhances customer loyalty.

2. Invest in elderly care real estate (REITs). Although direct evidence is limited, elderly care facilities are stable income assets favored by institutional investors. Mitsui, Sumitomo, and related financial firms are likely major investors or managers of Japanese elderly care REITs—indirectly sharing asset appreciation dividends without engaging in complex daily operations.

3. Provide supply chain financial support. Financial institutions like Sumitomo Mitsui Banking Corporation (SMBC) offer financing and loans to upstream and downstream enterprises in the elderly care industry, supporting the entire ecosystem.

By 2026, their strategy will continue to focus on financial advantages: expanding “insurance + services” (e.g., mergers and acquisitions of small and medium elderly care operators), innovating elderly care financial products (e.g., annuities, reverse mortgages), and global asset allocation, especially in Southeast Asia.

Itochu: Focusing on “Consumption,” Selling Japanese Experience to China

Itochu’s core difference lies in its strong “consumer” DNA—strength in textiles, food, retail, and other non-resource sectors. Its elderly care layout centers on elderly consumption and emphasizes overseas markets, especially China.

Its approach is unique: not providing “care” or “medical” services, but focusing on “silver hair consumption” and “resource connection.”

Specific strategies include two points:

1. Trade and operate “senior consumer products.” Leveraging its strengths in textiles, food, and retail, Itochu develops or代理s products suitable for the elderly—such as functional clothing, health foods, and convenient daily用品—aligned with its trading background.

2. Act as a “connector” for Sino-Japanese elderly care cooperation. Itochu’s strategic focus is clearly overseas, especially China—its executives have engaged with Chinese companies like Neusoft to explore elderly care product trade, Japanese tech imports, and talent training. It does not directly provide services but packages Japanese mature elderly care products, technologies, and experience for export to China, creating value through information advantage and network.

By 2026, Itochu will focus on three initiatives: establishing a Sino-Japanese elderly care cooperation platform (setting up joint ventures or divisions to help Japanese companies enter China), investing in overseas elderly care tech firms, and exporting Japanese-style elderly living solutions (not just products but community planning and health management services).

Marubeni: Using “Technology + Products” to Address Core Elderly Care Pain Points

Marubeni’s approach is the most precise—targeting the core pain point of Japan’s elderly care industry: “labor shortage.” Its strategy is based on “technology + products,” combining technological empowerment with product innovation.

Its main tactics include two directions:

1. Invest in promoting caregiving tech solutions. Collaborating with Konica Minolta, it invested in its subsidiary “Konica Minolta QOL Solutions,” focusing on digital solutions to improve quality and efficiency—such as sensors monitoring elderly status and management software optimizing caregiver scheduling. Marubeni not only invests financially but also leverages its customer network (hospitals, welfare facilities) to promote these tech solutions, providing B2B tech services.

2. Deepen in elderly health foods. Its food subsidiary develops and sells “therapeutic meals” and “smile care meals” tailored for the elderly—considering swallowing ability, nutritional needs, and health conditions—widely used in hospitals, welfare facilities, and home care. This is a product-driven approach, utilizing its core advantages in raw material procurement, processing, and distribution.

Looking ahead to 2026, Marubeni will continue to deepen “tech + products”: building a smart elderly care solution matrix (e.g., caregiving robots, wearables), expanding functional foods and nutritional lines, and becoming an “Age-Tech” integrator—bundling technologies from startups to provide comprehensive upgrade services for large elderly care groups.

In the future, the role of trading companies in elderly care will resemble “super connectors” and “industry incubators”: through strategic investments, nurturing elderly tech and service companies, and leveraging their global networks to scale and internationalize, ultimately leading the industry chain.

These mature practices also offer practical insights for Chinese enterprises entering the elderly care sector.

5 Key Insights for Chinese Companies: Find the Right Niche, More Than Blind Following

The “choices and withdrawals” of Japanese trading companies offer an important lesson for Chinese enterprises: opportunities in elderly care are not in blindly entering operational segments driven by trends, but in precise positioning based on their own strengths. Their strategic logic is worth learning.

Based on the experience of trading companies, Silver Hair Finance offers five targeted insights for different types of Chinese enterprises.

1. Large Conglomerates: Learn to Be “Industry Organizers,” Not “Executors”

Core insight: emulate Japanese trading companies—build platforms and ecosystems, avoid micromanagement.

Specific suggestions:

• Position as “industry organizers”: leverage group capital, land, brand, and government relations to build elderly care platforms—such as establishing elderly care funds, investing in excellent operators, tech firms, and suppliers—acting as “investors” rather than “operators.”

• Integrate internal resources: coordinate within the group’s real estate, finance, healthcare, property management, and hospitality sectors to form an ecosystem loop—real estate provides properties, finance offers products, healthcare supplies support, property services deliver care—maximizing synergy.

• Abandon micro-management: delegate professional nursing and service operations to specialized teams; the group only handles strategic planning, resource input, and investment management, avoiding micro-level operational pitfalls.

2. Real Estate Firms: Shift from “Selling Homes” to “Managing Assets and Connecting Services”

Core insight: leverage spatial advantages, combine light and heavy assets, and connect “investment, financing, management, exit.”

Specific suggestions:

• Focus on “property + elderly care”: real estate’s core strength is space development and holding, so prioritize high-quality elderly communities, CCRCs, senior apartments—creating solid “spatial carriers.”

• Combine heavy and light assets: develop properties with heavy assets, establish light asset management companies, with core focus on “asset management” and “service integration”—partner with top medical, nursing, and catering service providers, bringing them into communities, earning rent, management fees, and asset appreciation, rather than doing all services in-house.

• Explore REITs: securitize mature elderly care projects via public REITs, closing the “investment, financing, management, exit” loop, ensuring sustainable development.

3. Tech Companies: Learn from Marubeni, Become “B2B Enablers”

Core insight: avoid the red ocean of C-end markets, focus on B-end pain points, use technology to help elderly care institutions reduce costs and improve efficiency.

Specific suggestions:

• Deeply explore B-end needs: Chinese elderly care institutions face recruitment, management, and cost challenges—tech firms should develop SaaS management systems, IoT sensors, AI fall prevention, caregiving robots, etc., to solve real problems.

• Build open platforms: not just sell single products, but create open smart elderly care platforms that attract hardware makers and service providers, forming ecosystems to serve institutions and families.

• Value data: under compliance, accumulate health and behavior data of the elderly—these can be used for precise health management, insurance product design, demand forecasting, opening new business models.

4. Insurance and Financial Institutions: Learn “Insurance + Services,” Become “Health and Wealth Managers”

Core insight: insurance funds’ long-term nature aligns well with the long cycle of elderly care; the key is creating a “client-fund-service” closed loop.

Specific suggestions:

• Accelerate service-side deployment: through self-build, M&A, or equity participation, quickly acquire quality elderly care services and offline networks—insurance funds are suited for long-term investments, elderly care provides stable returns, perfect match.

• Link products and services: develop insurance products tied to elderly care—such as long-term care insurance, reverse mortgages—offering rights like priority residence in care communities or coverage of care costs, forming a closed loop.

• Transition to “health management”: shift from just a payer to a “health and wealth steward” across the lifecycle—covering health management, disease prevention, rehabilitation, and long-term care—enhancing customer loyalty and value.

5. Consumer Goods/Manufacturers: Develop “Age-Friendly Products,” Tap into Silver Hair Consumption Blue Ocean

Core insight: elderly consumption is a blue ocean; avoid the misconception that “elderly products = cheap products,” and aim for precise adaptation.

Specific suggestions:

• Deepen niche markets: invest in R&D to develop products suited to seniors’ physiological and psychological needs—such as easy-to-wear clothing, healthy foods in small packages, simple-to-operate smart appliances, safe welfare devices.

• Innovate channels: bypass traditional supermarkets, partner with elderly communities, senior colleges, online interest groups—reach elderly consumers directly, reducing customer acquisition costs.

• Build emotional brands: elderly consumption is not just functional but also emotional—creating warm, caring brand images to win trust and loyalty.

Conclusion: The Best Silver Economy Is “Knowing When to Act and When Not To”

Looking at the elderly care practices of Japan’s five major trading companies, they have never blindly followed popular operational tracks. Instead, they have rationally identified their niches—“doing what they are good at, avoiding what they are not.” This is the deepest lesson for Chinese enterprises. In an industry that is “warm and professional,” opportunities are never about “doing what’s hot,” but about “knowing when to choose and when to abstain.”

After all, elderly care is not a “get-rich-quick” business but a “long-term” pursuit—finding the right niche is more important than blind effort.