Special Feature: Anticipating Change, Pursuing Growth Opportunities

Emerging Needs and Social Trends
For more than a century, the Group has been heightening the value of line-side areas by anticipating the demand for easy
commutes, quiet residential areas, and entertainment that can be enjoyed in the suburbs. As a leader in line-side area town
development, we are analysing emerging needs and taking far-sighted measures in preparation for social change.

Increase in active elderly people

Rise in the number of women in employment

By 2025, those aged 65 or older will account for roughly 30% ofJapan’s population. Therefore, demand for health maintenanceand nursing care services for elderly people is set to rise.

Given the increase in the number of women in employment aswell as the decrease in population, society as a whole needs tocreate conditions that are more conducive to bringing up children.

Estimated number of elderly people who will be active
or require nursing care

Number of people in employment by gender
and women as a percentage of total(Millions of people)
30(Millions of people)
60

28.39

27.77

27.81

28.734020

43.12

52.63

53.93

20.48

22.29

15.48 35.9
10

9.83

9.59

8.18

6.15

20

27.64

0

24.74
43.9

41.3

38.9(%)
60

56.40

32.15

31.64

31.66

1995

2005

2015

40

200

2015

2025
(Forecast)

2035(Forecast)2045(At October(Forecast) of each year)

Active elderly people (not requiring nursing care)
Elderly people requiring nursing care
Source: Consumption Forecast in Relation to Seniors: After 2020 Households Aged 50
or Older to Account for More than 70% of Consumption, estimates by YOMIKO
ADVERTISING INC. and Research and Development, Inc.

01985(CY)

Men in employment
Women in employment
Women as a percentage of total (right axis)
Source: Labour Force Survey, Ministry of Internal Affairs and Communications

Expansion of the middle classes in Asia

More Japanese companies establishing operations in Asia

In the 10 countries that comprise ASEAN, the middle classes areaccounting for a larger share of the population, and their purchasing power is increasing as a consequence. Demand is expected
to grow in the ASEAN region over the medium-to-long term.

Many Japanese companies—particularly manufacturers of cars,
motorbikes, electronic components, and food—are establishing
manufacturing bases in the ASEAN region due to its growing
economy and working-age population.

Breakdown of the population of six ASEAN member countries
by income bracket

Number of Japanese subsidiaries in Asia

(%)

100

(Subsidiaries)

6,000

80

35.3

50.5

60

23.3
4,000

76.1

84.7

4,929

47.3
45.9

40

2,000

38.6

200

2001

12.0
2.1
1.2

2006

18.7
3.5
1.7

2011

7.7
3.2

2016
(Est.)

13.6
5.2

3,973
862
3,111

1,153

5,330
1,321

5,639
1,429

3,776

4,009

4,210

2013

2014

2015

21.72021(Est.)

7.70(FY)

Affluent: US$35,000 or above
Upper middle: US$15,000–35,000
Lower middle: US$5,000–15,000
Low income: US$5,000 or below
Source: White Paper on International Economy and Trade 2011, Ministry of Economy,
Trade and Industry

2012

(FY)

Four ASEAN member countries
Other Asian countries
Source: Summary of Basic Survey on Overseas Business Activities, Ministry of Economy,
Trade and Industry

Special Feature: Anticipating Change, Pursuing Growth Opportunities

The Effect of Social Changes on the GroupOpportunities	Natural decline in the working-age population (those
aged between 15 and 65), the main purchasers oftrain and bus commuter passes	Maintain or increase population through town development catering to a range of needs, including thoseof disabled and elderly people	Outflow of residents seeking conditions conducive tobringing up children and a corresponding decline in
the working-age population	Develop new earnings sources and create value by
developing and providing services related to safety
and peace of mind, health, and bringing up children

Risks

Opportunities	Tap into demand in growth markets by participatingin the real estate businesses that target middle classes	Loss of existing customers to competitors withenhanced logistics services in Japan and overseas	Enhance overseas logistics services even further todevelop business with existing customers and acquire
new customers	Disperse business risk by establishing presence inmultiple countries

Economic growth in Asia	Loss of growth opportunities due to delay in or curbing of overseas business development	Increase in volatility of business results due to fluctuations in the economy, interest rates, or exchange rates

Demographic change in JapanRisks