The Changing Japanese Consumer

Traditionally the Japanese are known for their propensity to seek higher quality items and pay more for that quality. This idea, however, is changing due to issues with both the global economy and the local economy. With an aging demographic, the focus now becomes on the newer generation that grew up in economically difficult times. This generation looks to find the best deal and move away from the traditional Japanese mentality which changes the entire landscape for Japan’s future.

        The economic downturn isn’t the only reason that Japanese consumer tastes are changing; The aging demographic has finally caught up with the Japanese. 2015 marked the first time that the Japanese population shrunk (Taylor). While the Japanese government is trying everything in its power to keep birth rates at the replacement rate of 2.1, the rates have stayed at around 1.4 (Taylor).  The loss in population and large number of older citizens makes it difficult to figure out the needs and wants of the population. Businesses have been very used to the tradition methods of conducting business, but the younger generation has been exposed to more influences from western societies changing the norm. The younger generations tend to shift away from going to department stores and going to high end grocery stores and look towards being thrifty and buying items online (Salsberg). The younger generations “have grown up through Japan’s difficult economic climate, never knowing the boom times the two previous ones experienced” (Salsberg). Unfortunately, this downturn continues.

        The economic downturn of 2008 changed the landscape of available jobs in Japan. Where many Japanese would normally find life long careers, they are now faced with more part time or temporary labor positions (Salsberg). This unease about the job market has lead to all generations of Japanese to consume less and to looks for cheaper goods.  Now the Japanese consumer more closely resembles those of the United Kingdom and the United States. All groups look for the best deals and not necessarily the best quality. Businesses noticed the trend and have been adjusting to meet the new demands of the Japanese consumers. Many groceries now have coupon programs and stock cheaper goods that will sell quickly (Salsberg). The Japanese also would shy away from fast-food establishments, but now many of the most profitable companies are from the fast food industry. McDonald’s, for instance, is the most popular fast food chain in Japan, even when McDonald’s popularity has dipped in previous years in the United States (Salsberg). The government has noticed these changes and has enacted various changes to laws and procedures to ensure the population retains its focus on being healthy.

        The Japanese are very health conscious; however, there has been a shift in focus from purchasing goods for quality to cost effectiveness. Though obesity is not terrible in Japan at about 3% of the population in 2010, that number is expected to rise with the increasing popularity of fast foods and cheaper quality foods (The Japanese Consumer).  For the older generation, meals are a social time that should be shared with others three times a day. The younger generation finds that they skip meals and/or eat alone so that they can return back to work. Also the Japanese on average consume about 1200 calories per day; whereas the average combo meal at McDonalds in the United States (burger, fries and a drink) average around 1000 calories (Japanese Consumer). To combat the rising health risks, the government has sought to force people to take a physical exam and ensure that the citizen is healthy, and if not, he or she will be required to exercise or diet. This intrusion into the personal lives of citizens have made people wary of the future further adding anxiety to an already strained population.

        Japan will likely never be able to recapture the traditional consumer it had before the economic downturn. The older generation is dying out and the younger generation is focused on the here and now. They tend to see things more like the average American does: Find the best deal for the best price. Perhaps Japan can come out the recession the same way the United States continues to improve from the downturn of 2008, but it will require that Japan adapt to changing times and a changing consumer.

 

Antoine Young

MBA Candidate 2016