Japan has given the world Ramen noodles, innovative technology, robotics, anime, and much more. It has established itself as a tech-savvy developed country that is futuristic but at the same time values tradition. Whether its fashion, technology, food, or culture, Japan always has a unique approach.
It is also known to be the third-largest economy after the US and China. Its role in the international community is considerable as it is one of the major aid donors and also a major source of global capital and credit. Most of the economy generated by the country is reliant on middle-class disposable income.
Many foreign brands such as Seven-Eleven, Starbucks, KFC, Chanel, Swatch Swiss watch, etc have successfully penetrated the Japanese market irrespective of the language barrier, cultural preferences and the differences in consumer purchasing habits through understanding the Japanese consumer behaviour and localizing their brands for the Japanese market.
Japanese consumer habits are different from the western world. Consumers are broadly divided into two groups; those who shop as per the old norms and the other is a much evolved (newer) generation which mirrors global demand.
Japanese Consumer Habits: the old and the new habits that have been influenced by global trends
- Planned purchasing versus spontaneous purchasing
Consumers in Japan have always preferred quality over quantity and are willing to pay a high price for it. This purchasing trend is influenced by their tradition and culture which encourages minimal possessions that will last longer than cheap products in excess.
Most of the Japanese population lives in smaller houses as compared to the west and hence has less space to fill, which is also another reason why they might buy less but high-end products.
The rising number of employed women has also shown a positive impact on the sales of luxury goods. Even though many domestic luxury brands are competing, foreign brands tend to do good in Japan as they are considered to be a status symbol.
In 2019, Hermès Japan alone made 13% of the total (worldwide) revenue. Because of the coronavirus pandemic though, luxury brands are struggling in Japan. It is so because luxury brands are still dependent on in-store purchases rather than on e-commerce. Nevertheless, as soon as the population returns to its norms, sales are expected to pick up.
2. In-store shopping experience
Not only luxury brands but most of the purchases are done in-store rather than online. In the west, more and more people are moving towards e-commerce, you can order any imaginable thing online, yet Japan lags far behind in online shopping. Though Japan is known for innovative technology, at 8.7%, Japan’s e-commerce penetration is far behind when compared to other developed countries.
The reason for this is, in Japan, shopping is considered to be a fun experience. People like going to the mall, spend a day out shopping, eating, and entertaining themselves. Consumers are also willing to travel distances to attain durable products. Another reason for low E-Commerce acceptance is the dependency on cash transactions. Unlike America, which has mostly become a cashless society, the Japanese still do not trust e-payment methods.
The ageing population of Japan might also be another reason. Older people do not take to technology and love to stick to ‘how things used to be’. On the other hand, brands too haven’t put in as much effort in promoting e-commerce stores as they have all around the world.
3. Leading in Distrust
The Trust Index of Edelman Trust Barometer Spring Update measures the average per cent trust people have in NGOs, businesses, the government, and media. According to the 2020 Edelman Trust Barometer Spring Update, Japan comes last with people having a rather high level of distrust in companies and media institutions globally. Hence, it is important to study consumer behaviour and instil a trust factor within your brand. The same survey also found out that the Japanese rely heavily on consumer reviews online to review information and form an opinion about a brand. This ‘verification behaviour’ of Japanese consumers is instilled irrespective to what generation one belongs to and imparts the message of how ‘face-value marketing’ is looked down upon within the country. Therefore, it is highly advisable for brands to invest heavily in PR (Specifically online) if they wish to be successful within the Japanese markets.
4. Brand Loyalty
Japanese culture respects loyalty and long-term connections. Most customers are incredibly loyal to the brands that they perceive to be loyal towards them. If they are highly satisfied with a specific brand, more often than not, they won’t switch to the cheaper counterpart. More customers show loyalty in the bank and credit card sector, followed by automobiles. Hence, when customers buy a product, they only select from a few previously tried brands rather than experimenting with newer companies.
Since Japan is a tight-knit, conservative society, people do not like to debate and would hardly like to disagree with the collective opinion of the community as it is considered to be impolite. This is essentially why the Japanese consumer buys the same brand as the members of its community. He likes to take the opinions of other people, conform with their ideas, and develop the same taste, in turn, feeling “accepted” within the society.
The younger generation also relies heavily on their friends and family for opinions on products. They tend to research online to form an opinion about a brand based on its internet presence and reviews.
Your Online Presence can make or break your product!
The Japanese tend to give attention to the smallest details rather than looking at the bigger picture. They will focus on smaller, detailed aspects of a product and will almost never evaluate the product as a whole in terms of the satisfaction they derive from it.
It, therefore, becomes super important to make sure that your product is not only perfect as a whole but even if one resorts to studying its aspects individually, it doesn’t fail to impress!
6. Need for Tech
Since the early 1960s, Japan has been synonymous with technology. Be it robotics, automotive, or electronics, Japan has carved its name on Earth. Sony, Nintendo, Atari, all the industry leaders are Japanese tech companies.
The younger generation likes new technology and innovative gadgets. They are getting more dependent on technology, especially mobile phones and the internet, showing similar behaviour patterns as American consumers. They want the best and “coolest” technology in their hands.
TO Be Continued…
By Pooja Srivastav
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