The Japanese consumer market
Mariko Fujiwara
Hakuhodo, Inc., Tokyo Japan
Demographics
（Area）
Hokkaido
Tohoku
Kanto
Hokuriku
Tokai-Koshinetsu
Kinki
Chugoku
Shikoku
Kyushu
（Population）
5,684,842
9,865,006
39,159,557
5,614,151
15,672,025
22,226,969
7,763,515
4,220,707
14,707,601
Urbanized population
4.55%
7.90%
31.35%
4.49%
12.55%
17.79%
6.22%
3.38%
11.77%
31.4%
4.5%
7.9%
Total Nearly 125,000,000
17.8%
12.5%
4.5%
11.8%
6.2%
3.38%
Tokai
Kanto
Kansai
62%
HAKUHODO
Average life expectancies grew significantly
Fastest aging population in the world today
Female
Male
The very old dominate the senior population
Total
raterapidly
Fertility
ratesfertility
dropping
Japan
USA
Korea
Italy
Sweden
Denmark
France
Labor force will continue to decrease in size
Labor force
• Labor force
（万人）
10,000
7,000
6,500
6,578
6,505
6,384
6,787
6,711
6,6456,666
6,615
6,793
6,766
6,779
6,752
6,650
6,689 6,666
6,642
6,000
5,500
5,000
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
Japanese population pyramid 1950-2050
Japanese households decreasing rapidly in size
(thousands)
Nr. of
households
1975
1980
Nr. of persons per household
1985
1990
1995
2000
2005
More couples live by themselves and more alone
Families
Nuclear families
Couples
Couple with children
1985
1990
1995
2000
Other families
One parent
with children
Non family
Single person
household
Most significant demographic facts are:
•
•
•
•
Fastest aging society in the world
Fertility rate continues to drop very fast
Total population began decreasing in 2005
The population is highly urbanized
• Live in smaller families
• More live as couples or alone
How they translate into consumer behavior?
• They are not interested in large quantities
• They need smaller/ individual portions
• They can exercise discretion easily
• They can focus on what they really want
and forego others because nobody suffers
• They can afford more expensive things
Japanese families
Marriage and divorce
per 1,000
Marriage
Divorce
Younger generations are marrying later
First marriage
First marriages
Husband
Wife
Age differences
Marriage and starting a family
•
•
•
•
•
Fewer marriages
Marrying later
Waiting longer to start a family
Having fewer children
More having no children
• More divorces
• More remarriages
Greater variety of families
•
•
•
•
•
•
•
Half of them have members 2 or less
Parents and two children not so typical any more
Single-person households grow fastest
Husband and wife (couples by themselves)
One-parent and children less
Other
The rest in special care facilities
Japanese women
Japanese women receiving increasingly more education
1954－2005
Male
Female
Lifecycle of Japanese women today
Care for
the elderly members
of the family
Women in the workforce by age group
Europe
Asia
Asia
China
Czech
France
Hong Kong
Holland
Japan
Italy
Korea
Malaysia
India
Pakistan
USA
Sweden
Japanese women
by occupation, role and experiences
1986-2005
School teachers
Total Population
Traveled abroad
All employee
Manufacturing
Gov’t committee
Medical doctor
Upper House
Researchers
Lower House
Section chief
More Japanese now work part time
Part time worker/ all workers in Japanese workforce
%
Signs of recovery?
• More companies report profit
• More companies began higher many more new
recruits
• The prices of property has begun recovering
• Consumers replacing their old appliances with more
new ones sooner
• Some suffer from negative equity while the first time
buyers enjoy relatively affordable housing costs
Consumer durables
1955-2006
Refrigerator
Washer
Vacuum
Cleaner
Color TV
Mobile phone
Cars
PC
VTR
Air conditioner
Digital camera
Microwave
oven
DVD P/R
Consumers have begun replacing old with new
Average interval Japanese consumers replace their appliances with
Air conditioner
Color TV
Refrigerator
Washer
Market regains consumer confidence?
Yen
可処分所得
消費支出
Discretionary
income
Household expenditure
（円）
500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
90 91 92 93 94 95 96 97 98 99 00 01 03 03 04
Internet access by age group
2001年末
（％）
100
9 2 .3
9 0 .7
7 2 .8
80
6 2 .8
60
2004年末
6 8 .5
増加率
2 .4
9 0 .5
2.4
8 4 .8
6 8 .4
5 9 .0
3 6 .8
40
1 .3
1 .4
1
1.3
.3
1 .8
2 6 .0
1 .4
1 .3
2.2
2.0
1.8
6 5 .8
4 9 .2
20
1 0 .7
60歳以上
50～59歳
40～49歳
30～39歳
20～29歳
13～19歳
0
６～12歳
（倍）
1.6
1.4
1.2
1.0
New and altered behavior
• ICT and e-Commerce or m-Commerce
• ICT and info-communication industries
altered the lifestyle of Japanese
consumers
• ICT empowered consumers with voice
• ICT allowed consumers to actively shape
the market
Consumer values and preferences
Areas of consumption Japanese wish to focus /improve
Leisure and hobby
Food and Diet
Housing
Durable goods
Clothes
Recent experiences for the Japanese “Seikatsusha”
• Prolonged recession has forced Japanese
“Seikatsusha” to reexamine their consumer behavior
• We saw negative growth in some years, and the
record high unemployment rates in post WWII
deprived the younger workers of good jobs
• Changes in “Japanese” employment pattern and
salary structure had an impact on consumer
confidence
• Some suffer from negative equity
“Mosaic” Consumption
• Two orientations coexist in consumer
behavior
– 1.Preference for the real thing
• “It’s worth spending more money to get
something good”
– 2.Preference for lower prices
• “Would like to pay less for things that they’re not
so particular about”
» Source : A publication from Hakuhodo Institute of
Life and Living,1997
“Mosaic” Consumption
• The Reason Behind this Situation...
– Japanese consumers are getting used to
an economy that is growing more slowly
– They’re noticing that…. The economy is growing
not so fast as before.
Quality of life
is important...
Be selective and focused.
.
Promising targets
Women in the Japanese market
– Better educated
– Highly qualified women enter the workforce
– An increasing number of young women are
working and the wage gap is narrowing for
them
– More women are pursuing careers
– Women are becoming more visible in wellpaid positions and in higher management
positions
Seniors
Today’s Japanese seniors
11%
36%
22%
31%
50s
60s
70s
80s & Over
Young Seniors
• The generation who worked hard to rebuild
and modernize the economy.
• They are the first to have accepted and
adopted Western ideas and technology.
• They have ample time with disposable
income and / or sizable savings to enjoy life.
• They are actively seeking ways to enjoy life
for themselves.
• They try to remain young at heart.
• They try to remain active and want to look
stylish and attractive.
The First Postwar Baby Boomers
• 80% of assets held by individuals in Japan
belong to those aged over 50.
• They are in late 50s now and are well aware
that they are getting older.
• Most of them feel that they are young and
capable of competing with their younger
colleagues in many areas.
The First Postwar Baby Boomers
• Finally, they are seeking ways to live their lives
for themselves.
• They like to think of themselves as being fashion
conscious and fashionably dressed.
• They have interest in maintaining good health
through healthy diet.
Japanese seniors today want to serve themselves
%
How I want to spend money
70
60
50
40
30
20
10
0
Spend for
myself
Spend for
family
50-64
65-74
75+
Japanese seniors want a lot of communication
LLook forward to communicating with
90
80
70
60
50
Male
Female
40
30
20
10
0
Child
Child
spouse
Spouse
sibling
Sibling
grand child
Grand child
friends
Friend
Quality of Life Issues
•
•
•
•
•
Good health
Sensible diet
Focus on healthy lifestyles
Interest in sports
Participation in sports events
Quality of Life Issues
•
•
•
•
•
•
Quality of Experience
Time Value
Focus on Leisure
Focus on Style
Slow and genuine process
Slow life
Younger generations
The New Breed Generation
• Born in ’60s (9.3 million)
• The first generation to have grown up in
the affluence generated by the rapid
economic growth after the war.
• They have an entirely different value
system from their parents
– Martians ~ their attitudes toward life are
extremely alien to the older generations
The New Breed Generation
• First generation to have cultivated a lifestyle
that puts emphasis on enjoyment and leisure
activities.
• They want to enjoy freedom.They do not want
to look far ahead into the future. They did not
have to.
• They are willing to pay premium prices for
information in order to remain well informed
and thereby enjoy life.
• They are the first generation of parents who
do not want to give up their preferred
The New Breed Generation
• “Life is to be enjoyed”
• Strong sense of “entitlement”
• “I am important”, “ and therefore I deserve
a lot” “I do not want to give up anything”
• The society and the environment “must
accommodate us”
The Second Postwar BabyBoomers
• Born in early ’70s (8.1 million)
• The first generation born into a
predominantly middle-class
environment.
• They assume that everybody lives in
much the same way as they do.
The Second Postwar Baby Boomers
• They also believe life is to be enjoyed and
assume a “let it be” attitude.
• They are self-conscious and protective of
privacy in their lives.
• They want to be well informed but they tend
to reject anything that has the power of
authority.
• They have strong desire to try new things and
explore the unknown in trying to establish
their “personal style”.
The Second Postwar Baby Boomers
“Make life just as I want but do not lecture
me”
Today’s Young Recruits
• Born in the early ’80s. (7.3 million)
• Growing up when the population of young
people began to decline significantly.
– Water Spiders
Today’s Young Recruits
• They are perceptive and discerning. They
are quite realistic and practical.
• They are more tolerant and more accepting of
other people’s values and standards. They
are open to people from a wide variety of
cultures and backgrounds.
• They are quite sociable and outgoing.
• They are quick to adapt new trends and hightech innovations.
Today’s Young Recruits
“ Live and let be”