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flag Japan Japan: Reaching the consumers

In this page: Consumer Profile | Marketing opportunities

 

Consumer Profile

Consumer Profile
The Japanese population is the oldest in the world, with a median age of 48.4 years in 2020. According to the latest data by World Bank, some 12.6% of the population is under 14 years of age , 59.4% between 15 and 64 years old and 28% over 65 years old. The population is decreasing (-0.3% in 2019). The number of people per household is declining continuously and reaching 2.3 in 2019 while the number of households should continue to increase despite the decline in the population. About 60% of households are couples with or without children. One-person households are increasing and represent nearly 35%. The Japanese population is 51.2% women and 48.8% men. Japan is one of the most densely populated countries and 91.8% of its population is urban. Tokyo, followed by Kanagawa, Osaka, Aichi, and Saitama, account for 36.4% of the population. The level of education is high, almost all the population has secondary education. In 2019, 62% of 25-34 year-olds had a tertiary degree in Japan compared to 45% on average across OECD countries. About one-fifth of the workforce is made up of office workers, 17% of professionals and engineers, 13% of people working in manufacturing processes, 12% of sales people, 12% of people working in services, 7 % of people working in transportation, cleaning, packaging and related activities while 4% are construction and mining workers. Workers in administration, security, transport and agriculture, forestry and fisheries each account for less than 3%.
Purchasing Power
In Japan, GDP per capita reached about USD 43,235.718 in PPP in 2019. Japan is a high-income society, but looking at the average annual income of member countries in 2019 published by the OECD Japan ranked 19th, with 40,573 US dollars (approximately 4,479,259 yen), lower than the average of all OECD countries, which was 46,686 US dollars (approximately 5,154,134 yen). In Japan, the average household net-adjusted disposable income per capita is USD 29 798 a year, lower than the OECD average of USD 33 604  a year. There is a considerable gap between the richest and poorest – the top 20% of the population earn more than six times as much as the bottom 20%. The country suffers from inequalities, especially between the sexes. Although the gender wage gap in the country has decreased over the last 15 years, it remains large (24.5 per cent), and Japan is third to last in the ranking compiled by the OECD. People under 20 are the least paid. Half of consumers believe they are more environmentally conscious about shopping than they were a year ago, yet very few are willing to pay more for it.
Consumer Behaviour
Japanese consumers have long tended to prefer quality consumption over mass consumption. However, the economic slowdown has led some consumers to seek out lower prices and lower quality products. This is especially true of the Yutori (Millennial) generation. 43.8% of people under the age of 25 work part-time and earn around $100–500 a month. They are generally willing to visit malls and specialty stores if they offer entertaining shopping experiences. Discount stores and own-label products, which once struggled to break into the Japanese market have gained market share. Quality standards and service expectations (sales process, delivery, packaging, after-sales service, etc.) are high in Japan. The average basket in Japan, relatively high compared to Western countries, is down because of the change in consumption modes (cheaper products in particular). Due to the economic situation in Japan consumer confidence is eroding. Online shopping is attracting an increasing number of consumers though while the country is largely connected, e-commerce is less present than in Eastern Europe or the United States. Japanese consumers are very open to buying international brands for everyday consumer goods and are generally attracted by products imported from countries  perceived as "specialised" such as Swiss watches and French wines. However, Japan is still the largest luxury markets in the world. Bvlgari, Salvatore Ferragamo and Gucci earn 27% of their global revenue in this market alone. Louis Vuitton, meanwhile, earns half its global profits from its 60 stores on the island.

Consumers in Japan are generally very brand loyal, however, the older population is more so than the younger generation. There is a strong desire for new products and generally consumers adopt brand innovations though loyalty is declining. Half of the population uses social media regularly. The Japanese mainly watch videos and follow influencers for opinions on products. Also, nearly three quarters of consumers inquire with social networks before buying certain products, especially cosmetics and fashion. In general, the Japanese are not worried about big data, thanks to the legislation in force. However, most believe that the counterpart to the accumulation of personal data is to receive regular tailored and promotional offers.

Since the economic crisis, the Japanese are moving towards lower priced consumption. According to a McKinsey study, while they were willing to spend more to save time, the trend is reversed for some Japanese consumers who prefer to take time to spend less. This is reflected in particular with diets. Part of the population now prefers to cook at home rather than eat out at a restaurant. Also, while the population spends most of the time outside the home even with small houses and long working hours there is an increase in the time spent at home. Regarding the environment, more than half of the population is more interested in it than the previous year. However, very few are willing to pay more for consuming environmentally responsible products. The collaborative economy, such as Airbnb, is struggling to attract more clients.
 

Household Consumption Expenditure

Sector Percentage
Housing, water, electricity, gas and other fuels 25.2%
Food and non-alcoholic drinks 15.6%
Miscellaneous goods and services 13.7%
Transport 10.0%
Restaurants and Hotels 8.0%
Culture and Leisure 7.8%
Furnishings, household equipment, everyday maintenance of the house 4.3%
Health 3.8%
Communication 3.7%
Clothing and Shoes 3.5%
Alcohol, tobacco and narcotics 2.3%
Education 2.1%

Source: OECD Stats, 2016.

Consumer Recourse to Credit
Credit and debit cards are increasingly used and this has doubled in 10 years. Debit cards are more widely used and accepted than credit cards (found mainly in large hotels and big-city stores). After stagnating since 2010, household credit is rising again. Outstanding loans are estimated at Y4,744,864 according to the Bank of Japan. Consumer credit is largely granted by banks, rather than by businesses. The majority of consumer credits are for housing. With an accommodating monetary policy pursued by the Central Bank, consumer loans should continue to grow.
Growing Sectors
Games consoles, watches, mobile phones, household appliances (washing machines, etc.), electric personal care appliances, dining room furniture (tables, chairs, etc.), ready meals, Japanese clothes, amusement parks , sports services, veterinary services, personal care services, hygiene products, services for the elderly, educational goods and services.
Consumers Associations
JCCU , Japanese Consumer Association
CUJ , Union of Japanese Consumers
JCA , Liste des associations consommateurs
 

Population in Figures

Total Population:
125,836,021
Urban Population:
91.8%
Rural Population:
8.2%
Density of Population:
345 Inhab./km²
Men (in %)
48.9%
Women (in %)
51.2%
Natural increase:
-0.34%
Medium Age:
43.0
Ethnic Origins:
Japan is one of the most ethnically homogeneous countries in the world, with ethnic Japanese making up the vast majority of its population. Other ethnic groups present in Japan are mainly Chinese, Korean, Vietnamese and Filipino. (Official Statistics of Japan)
 

Population of main metropolitan areas

City Population
Tokyo 9,556,000
Yokohama 3,740,200
Osaka 2,725,000
Nagoya 2,320,400
Sapporo 1,966,500
Fukuoka 1,579,500
Kobe 1,527,400
Kawasaki 1,516,500
Kyoto 1,469,000
Saitama 1,295,600
Hiroshima 1,199,300
Sendai 1,088,700

Source: Citypopulation.de, Latest available data - Latest available data.

 

Age of the Population

Life Expectancy in Years
Men:
81.4
Women:
87.5

Source: World Bank, last available data., 2009 - Latest available data.

 
Distribution of the Population By Age Bracket in %
Under 5:
4.1%
6 to 14:
9.1%
16 to 24:
9.9%
25 to 69:
60.6%
Over 70:
16.2%
Over 80:
6.3%

Source: United Nations Department of Economic and Social Affairs: 2010 Population Division Prospects - Latest available data.

 

Household Composition

Average Age of the Head of the Household 53.8 Years
Total Number of Households (in million) 51.8
Average Size of the Households 2.8 Persons
Percent of Households of 1 Person 32.4%
Percent of Households of 2 Persons 27.2%
Percent of Households of 3 or 4 Persons 32.6%
Percent of Households of 5 Persons and More 7.8%

Source: UN Data, 2012 - Latest available data.

 

Consumption Expenditure

Purchasing Power Parity 2019202020212022 (e)2023 (e)
Purchasing Power Parity (Local Currency Unit per USD) 101.77101.4098.2596.1494.34

Source: IMF – World Economic Outlook Database, Latest Available Data

Definition: Purchasing Power Parity is the Number of Units of a Country's Currency Required to Buy the Same Amounts of Goods and Services in the Domestic Market as USD Would Buy in the United States.

Note: (e) Estimated Data

 
Household Final Consumption Expenditure 201720182019
Household Final Consumption Expenditure
(Million USD, Constant Price 2000)
2,494,3732,501,1572,493,576
Household Final Consumption Expenditure
(Annual Growth, %)
1.10.3-0.3
Household Final Consumption Expenditure per Capita
(USD, Constant Price 2000)
19,67419,76719,749

Source: World Bank, Latest Available Data

 
Consumption Expenditure By Product Category as % of Total Expenditure 2016
Housing, water, electricity, gas and other fuels 25.2%
Food and non-alcoholic beverages 15.6%
Miscellaneous goods and services 13.7%
Transport 10.0%
Restaurants and hotels 8.0%
Recreation and culture 7.8%
Furnishings, household equipment and routine maintenance of the house 4.3%
Health 3.8%
Communication 3.7%
Clothing and footwear 3.5%
Alcoholic beverages, tobacco and narcotics 2.3%
Education 2.1%

Source: OECD Stats, Latest available data

 
Information Technology and Communication Equipment, per 100 Inhabitants 2012
Telephone Subscribers 102.7
Main Telephone Lines 50.8
Cellular mobile subscribers 102.7
Internet Users 79.1
PCs 54.2

Source: International Telecommunication Union, Latest available data

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Marketing opportunities

 

Media in Which to Advertise

Television
Expensive but reaches mass consumers effectively. TV is expected to continue to lead Japan's advertising market (more than 40%) over the next years. Many millions of viewers subscribe to satellite and cable pay TV. TV advertising expenditure represented  31.3% of the total ad market in 2016.

Main Televisions
Fuji TV Network
NHK - Japan Broad. Corp.
NTV - Nippon TV Network - Channel 4
Press
Advertising in newspapers is expensive but reaches mass consumers effectively. In regional and local newspapers, it is suited only for a product with strong potential in a specific region. The increasing use of Internet and the downward trend of the population have contributed to a decline in newspaper sales. There has also been a decrease in the number of newspaper advertisements, which has forced the newspaper industry to transform its style of business (some newspapers charge for online access). Nevertheless, the print sector is still influential and highly trusted. National dailies sell in millions, boosted by afternoon and evening editions. 68.7% of the population read morning newspapers in 2017, whereas the ratio of those who go online for their news grew to 71.4%.
Advertising in magazines is a more affordable option for small- to medium-size enterprises. It is the best advertising option to reach a focused target audience, consumer group or to sell industrial and commercial products. A tremendous variety of magazines is published in Japan on a weekly, biweekly, monthly, and quarterly basis. Newspaper advertising expenditure represented 12.1% of the total advertising market in 2016.


Main Newspapers
Asahi Shimbun
Yomiuri Shimbun
Nihon Keizai Shimbun
The Japan Times
Mainichi Shimbun
Nikkan Sports
Mail
Makes it possible to reach people all over the country, but not really useful. Mail advertising spending was 6% of the total ad market in 2016.
In Transportation Venues
Transit advertising is especially effective in major cities for branding products and services aimed at women and businessmen, since the majority of Japanese use public transportation for commuting and other business. Ads are placed on buses, rail cars and stations (hanging flyers, framed posters, stickers and flat-panel video). Outdoor advertising expenditure was 20.5% of the total ad market in 2016.

Market Leaders:
Japan Intelligence and Communications
Japan Advertisement
Radio
Few radio stations and a relatively small number of radio listeners (less than 7% of the population), but radio advertising expenditure is growing slightly. Radio in Japan operates at rather regional scale and its ownership remains strongly localised. Radio ad spending represented only 2.1% of the total advertising market in 2016.

Main Radios
NHK
Tokyo FM
TBS Radio
J-Wave
Inter FM
Web
Japan is the second biggest market of the world concerning online advertising. Advertisements directed at smartphones, as well as video adverts and advertisements using new advertising technologies and data application continue to expand. 94% of the population used Internet in 2017. Japan's Law on Regulation of Transmission of Specified Electronic Mail requires use of an "opt in" system in which email can only be sent to people who have previously agreed to receive it. Online advertising spending represented 20.8% of the total ad market in 2016. Increases in digital ad spend are expected to slow in the next few years (spending will rise just 6% to USD 12.63 billion in 2020). By then, more than 30% of all paid media spending in Japan will go toward digital formats, including all advertising served to internet-connected devices.

Market Leaders:
Grey Japan
Mondo Marketing
Japan Intelligence and Communications
Main Advertising Agencies
Dentsu
Hakuhodo
ADK
Tokyu Agency
NTT Advertising
 

Main Principles of Advertising Regulations

Beverages/Alcohol
There is no specific legislation on alcohol advertising, which is regulated only via voluntary rules adopted by the Commission on Alcohol Beverages, for example: the prohibition of alcohol-related TV advertisements from 5am to 6pm; alcohol adverts must follow only after TV or radio programmes with an audience of drinking age (20 years); a warning to minors, pregnant women and nursing mothers must be included; pregnant celebrities may not appear in alcohol adverts.
Cigarettes
The Tobacco Institute of Japan has issued voluntary rules on advertising: targeting of minors is not allowed; adverts must include health warnings and may not be shown in public places, with exceptions around tobacco stores; the use of celebrities appealing to the younger generation is not allowed.
Pharmaceuticals/Drugs
Must be approved by the Ministry of Health & Welfare.
Other Rules
Comparative advertising must be substantiated.
For further details, read the Code of Ethics of the Japan Advertising Agencies Association.
Use of Foreign Languages in Advertisement
Bilingual marketing is an excellent way to stand out and English is much used as promotional tool, but foreign commercials must always include some Japanese language.
Organizations Regulating Advertising
Japan Advertising Council
Japan Advertising Agencies Association (JAAA)

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Latest Update: May 2022