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Localizing for Japan: Consumer Behaviour Part 2

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The shift in Consumer Behaviour

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source: https://www.slideshare.net/futurewatch/future-watch-consumer-trends-and-lifestyles-in-japan

The younger generation is getting more aware of global trends and events. They love to participate in them, which is why younger customers have similar demands as western customers. The upcoming generation of happy singles has different demands and needs as compared to older counterparts who believe more in traditional values. Companies’ focus is also shifting in creating products for the singles. The older generations however being influenced by these trends are also close to their roots and still make traditionally acceptable choices.

  1. Ethical choice
    The newer generation has started to make ethical lifestyle choices and is buying more sustainable products. It is because they are getting more educated through the increasing use of social media and the internet. It is also influencing their buying choices but so far only a small percentage is making an effort.

The world’s focus has shifted to climate change in 2019–2020, and Japan is also playing a key role in trying to reverse climate change. Due to the 2020 Olympics, the general population is getting more aware of the global events and partaking in it. There is a shift in the consumer’s priorities as well; they are purchasing ethical, environment-friendly products that benefit society. For example Coca- cola’s I LOHAS (lifestyles of health and sustainability) water has become Japan’s best-selling single served local water bottle because of the environment-friendly components it includes in its packaging (Instead of the standard 26 grams, 12 gram of recyclable PET3 plastic is used to make these bottles). This behaviour was prevalent before the outbreak of the pandemic but particularly in the year of 2020, greater engagement in eco-friendly products has been seen within the Japanese markets.

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source: foodnavigator-asia.com

2. Loner Lifestyle: the prevalence of Individualism in the newer generation
There is a rise in the younger generation, especially men, that are leading a loner life. They aren’t interested in marriage or having a traditional family. The ‘happy singles’ as they call themselves tend to devote time for the self by travelling and relaxing on their own

Japanese work culture is intense. Unlike in the west where people work for 40 hours a week, the Japanese can work up to 60 hours a week. With such a hectic schedule, it is understandable that people want some time for themselves to recuperate.

Instead of spending money on materialistic products, these “happy singles” would rather invest in tourism. Single consumers focus more on enjoying life rather than giving in to the pressure of marriage, hence most sectors (such as trips and travel, restaurants, karaoke, etc,) are shifting their focus towards them.
According to a recent McKinsey study, more than half the population is preferring to stay at home and cook than the previous year (especially after the pandemic outbreak). This further means that there has been a spike in buying time-saving frozen packaged food which in turn has significantly increased the online shopping behaviour of these customers more than ever.

source: https://blog.euromonitor.com/the-consumer-impact-of-coronavirus-in-japan/

3. Comparison of online market prices to in-store brand prices

Even though luxury consumption won’t see a decline in the near future, the middle class is getting more conscious of their money-spending habits. In place of positive reviews, clear value proposition, and value for money, brand loyalty is decreasing among the younger generation, especially when it comes to the consumption of products in which they lack strong preferences.

Now, before buying an item in stores, the people first check the price on the internet to see if they can get it for a cheaper price. Consumers do not see price as a sign of quality, especially women, who tend to compare homogenous products based on design, reviews, functionality, etc. rather than the price.

How can localization strategies be revised in consistency with the older and newer generation?

  1. Launch ‘Affordable Luxury’ products and engage with influencers for promotion strategies:
    If a brand launches a product in the Japanese market, they always strive to label their product as “premium” and put them in the “affordable luxury” price point. There are lots of domestic innovative products, and people buy foreign brands either because of their popularity or they want to maintain a certain status in society. These tags help gain the attention of both older and younger generations.

Also, getting in touch with social media influencers to promote their brand has been a successful promotion strategy for several foreign brands in the Japanese consumer market (especially for beauty and fashion brands). Since social media influencers have large audiences, a brand can easily increase its consumer base by collecting a pool of reviews of these influencers for their product to establish a firm’s reputation within this market.

2. Minimize open promotions to rather fixate on online reviews for success and building trust within the consumers:

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source: https://blog.euromonitor.com/the-consumer-impact-of-coronavirus-in-japan/

Japanese consumers like sophistication and would rather prefer to share high-end products on social media, which would showcase their refined taste. They rarely engage in promotional offers openly. They would like to know about the offers through private channels such as emails, therefore email marketing plays a vital role in the Japanese markets to which companies remodel their localisation marketing strategies. Moreover, even though the promotions are done through more private channels, display and advertising play an important role to promote sentimental feelings within Japanese consumers irrespective of the generation.

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source: https://blog.euromonitor.com/the-consumer-impact-of-coronavirus-in-japan/

Alongside this, a survey found that about 94% of people in Japan actively use the internet. Even though e-commerce hasn’t become popular, people do search for the customer ratings, reviews, and the social media presence of a brand to verify their purchase, ethnicity and judge it’s product value and services instead of relying on the market face-value of a brand. Since Japanese are known to distrust easily, it becomes imperative for a brand to build its image through openness and good reviews (bad reviews circulate very quickly within the Japanese consumer market). Customer ratings is the key localisation tool used for gaining trust in Japan. And since this tradition has persisted since way before the pandemic, it does play a very vital role which cannot be overlooked.

3. The previous perishable tradition of low priced tacky products is reviving from the ashes of the pandemic.
Japanese culture is all about minimalism and simplicity. They do not like loud, tacky designs. Instead, they love cute (Kawaii), simple designs. For instance, the Japanese love Apple products for its slick design; the minimalistic and cute logo and uniformity across designs. It is also fun, stylish and easy to use. To be more successful in the Japanese market, brands should not go overboard while trying to be overly complex or feature-filled as simple, cute, and sophisticated products with good design tend to be winners.

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source: chandlernguyen.com

However, there has been a shift within this trend with respect to the global pandemic. According to a McKinsey study, Many (irrespective of their generation) are now seeking lower-priced products from private company labels and discounted stores- which once struggled to enter the Japanese market. Of course, the distaste towards ‘tacky’ products still remains as it was but the consumers have tightened their expenditure and have started resorting to online shopping. Even though the e-commerce crusade is not as prevalent in Japan as it is in the US and UK, the number of online purchases has drastically increased within 2020. It is possible that the shift in this online behaviour might persist for quite a while.

4. Curious Customers Crusade
As most Japanese consumers follow more of a traditional way of buying and shopping, if a brand is able to generate a marketing strategy that uses a methodology of forming a queue, this would pique their attention. Almost 80% of people present would get curious and 25% would stop to investigate. This could also be one of the strategies that can be used.

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source: hotjpdeals.com

For instance, KFC has made queuing up for their chicken a Christmas tradition. Every year, people line up in front of KFC as part of the Christmas tradition.

By Pooja Srivastav
Team Loc-N-Apps
for similar articles visit — locnapps.com/blogs

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