Spending behaviorThe low-interest-rate environment imposed by the Bank of Japan has been a measure to boost big purchases and investments to stimulate the economy, but the increasing saving ratio implicates an opposite trend of careful spending decisions among Japanese households. Instead of spendthrift shoppers, money-related factors dominate purchase decisions in Japan as household incomes and price development determine future spending behavior, in particular, for large disbursements like personal vehicles or private properties.
At the same time, Japanese shoppers value quality products and services, with domestic manufacturers emphasizing highly sophisticated production processes based on long-lasting traditions. As such, marketing plays a crucial role in communication with potential buyers. Characterized by colorful visuals and dynamic TV ads, consumer goods like foodstuff, beverage, and personal care products are leading segments of the Japanese advertising industry. Apart from traditional media, companies are exploring a variety of channels to reach out to target groups, with online websites and social media growing in importance as methods to build consumer desire and to explore consumer trends.
Shopping trendsDomestic consumer trends are showing a growing consciousness towards sustainable lifestyles as environmental issues are recurring topics in media. The country remains one of the largest producers of plastic waste facilitated by the prevalence of plastic as a hygienic packaging material in supply chains as well as the custom of free plastic bags at store counters. But the implementation of plastic bag fees in July 2020 initiated a change in environmental awareness, with reusable shopping bags becoming a frequent companion on shopping trips. Furthermore, segments addressing social development goals like organic, ecological, and Lifestyles of Health and Sustainability (LOHAS) are garnering attention as concepts necessary for the future.
To curb shrinking consumer demand following the most recent tax hike in October 2019 and at the same time promote cashless payment in the country, the government issued a rebate program for purchases settled cashless. Even though cash remains king after the end of the program, the awareness of the broad cashless payment landscape in Japan grew, with the coronavirus pandemic driving usage of e-money even further. Together with the growing familiarity with online services and shopping channels, more and more consumers are opening up to innovative technology and taking first steps into the digital economy.