Title: The Japanese Market: Consumer Behavior
1The Japanese Market Consumer Behavior
- Roy Larke, PhD.
- Editor JapanConsuming.com
- Professor, University of Marketing Distribution
Sciences, Kobe, Japan
2Understanding Japan
- Who are Japanese Consumers?
- Is Japan still worth it?
- How have retailers reacted?
- What can we expect in the future?
3Population Issues
- Very, very crowded
- 1,000 people per km2 on average
- Tokyo vitally important
- Kansai, Nagoya secondary, but growing
- Generation Markets
- aging population (25 over 65 by 2025)
- baby-boom markets (22 of total population)
- Sex differentials marked
- 1.3 million more men than women between 0 and 34
4Tokyo The Centre of Japan
5Who are the consumers?
- Pre-college
- 20m low income, but active consumers
- College
- 4m small group, but high disposable income
- Office Ladies (young working women)
- 10m avid consumers, high income, no career
- Salarymen
- 45m limited consumption, almost never shop
- Housewives
- 45m shop to live, control household budgets
6Is Japan still worth it?
- What the newspapers are saying
- Japanese economy is in crisis
- Deflation
- Retail sales are falling fast
- Consumer confidence is low
7Hidden beyond the headlines
- Japan is the second largest economy in the world
- Japan has very high income per head
- Still low penetration by non-Japanese firms and
brands
- Rich consumers with money to spend
8Just the facts
- 1 in 6 Japanese (20 million people) own a Louis
Vuitton accessory
- 1822 year olds 170,000 (1,550) a month for
non-essentials
- The average savings per working household is 10
million (90,000), 15 million overall
9Income Expenditure Flat in 1990s
10Monthly Savings increase 21
Monthly savings per working household 1990
11Consumer worry Labor market Reform
- End of lifetime employment
- Personal abilities important
- Fast track employees (MBAs)
- More job hopping
- Skilled employees gaining personal value and
seeking careers in many companies
- Fewer jobs for graduates
- Acceptance of jobs abroad and with foreign
companies
12Consumer worryHigh Prices
- Most expensive country in the world
- Prices 35 times (food highest)
- Demand for discounting
- Hindered by high distribution costs low
margins
- Move away from price quality
- Specialist retailers overseas companies
13Retailers unable to cope
- Retail problems are largely their own making
- Lack of strategic direction
- Overly inflated prices, high costs
- Polite, but standardised, boring service
- Too much empire building by big retailers
- High debts, cant take advantage of lower land
prices
- Slow to react to consumption changes
14Japanese retailers the lost decade
15Consumers are worried
- End of life-time employment
- Worry about jobs, income
- Save more and more
- Worsening of position of women in the workforce
- Movement of students and workers overseas when
possible
- But
16Consumers are also bored
- Consumer confidence hasnt hurt some retailers at
all!
- Japanese firms (2000-01)
- Fast Retailing (Uniqlo) Sales up 106.1
- Five Foxes (Comme Ca) Sales up 17.1
- Overseas firms
- Louis Vuitton, Prada, Hermes etc..
- Sephora, Gap, Starbucks, Carrefour
17What do consumers want?
- Consumers want what they are told they cant
have
- Lower prices
- Well supported brands
- Genuine, friendly, outgoing service
- Imaginationfrom products and stores
- Value for money
18The Future
- Further internationalisation
- Internet
- But through mobile phones not land lines
- Increased demand for imports
- Reduced prices through competition
- Distribution concentration, fewer big firms
- Distribution channel cost control
- Consumer orientated marketing
19Huge opportunities for overseas firms
- Land prices low, demand high
- Great pool of workers looking for new, exciting
jobs
- Big demand for imagination and originality
- Ikea by 2005, Tesco sooner, Wal-Mart sooner
still
- The time has come to be in Japan and stay
long-term
20If youre not in Japan