Boom in Japan’s Funeral Market

Japan’s current annual death rate of 0.95(compared to 0.84 in the U.S.) is expected to increase over the next few decades as Japan’s baby boomer generation begin to pass on. It is estimated that 1.66 million people will die annually in Japan by 2040, decreasing the population by almost 20 million people.

The current and estimated increase in deaths has caused a boom in Japan’s death industry where the average death ceremony price tag is 1.2 million yen. The increased death rate has also increased demand for crematorium use in urban areas. In Yokohama, the average wait time for a crematorium is four days, and neighborhoods have curtailed plans to build more urban crematoriums due to the nuisances they create. The significant wait time for crematorium use has, in turn, driven up the demand for morgues to keep bodies in the interim.

By 2015, Japan’s funeral market will likely be worth 1.96 trillion yen, and individuals can enter this booming market with ease. The death industry in Japan has very little oversight and does not require licensing or other mandatory qualifications. As a result of both the increased death rate and relative ease of entering the industry, it is no wonder that the number of operators is also on the rise.

See Tim Kelly, Death Industry Reaps Grim Profits as Japan Dies, Reuters, Sep. 12, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.