Japan in 2020: Creating Demand in a Mature Economy

Japan in 2020: Creating Demand in a Mature Economy


As we welcome 2020, the global spotlight will be on Japan as host of the Summer Olympic Games. This is a pivotal time for Japan as the country confronts a variety of economic challenges. It is also a great opportunity for Japan to offer lessons to the rest of the world on solutions to overcoming these hurdles. Japan’s population is ageing and declining. By 2030 nearly one-third of the population will be aged over 65. The labour shortage is causing price increases in consumer goods and services. With the fear for the unstable future, consumers in Japan are increasingly becoming selective and mindful of their spending. To move forward in this challenging environment, companies are keen to create new demand and change their target consumers for survival. Let’s hear from our Japan industry experts about how how Japanese companies are adapting their strategies to confront these challenges. Beauty companies are keen to expand their businesses through investments in men’s cosmetics. Beyond men’s skincare, Shiseido launched men’s BB cream in 2019 which was the first men’s colour cosmetics from a major brand and soon got sold out. In the fashion industry, companies are seeing significant potential in younger seniors who are healthy, active, energetic, fashionable and don’t want to be seen as elderly. In 2019 the first fashion magazine targeting female consumers specifically in their 60s was launched and very well-received. Consumer goods companies are leveraging this printed magazine as a communications platform through to reach young seniors who are not necessarily active online. Demand creation is also active in food. For instance, baby food manufacturers noticed senior consumer’s interest in their nutritious products positioned for children. They responded by leveraging their research and development capabilities in baby milk formula to successfully launch powder milk tailored for senior consumers’ needs. While products typically consumed by the young can be re-positioned for seniors, the reverse is also true. For instance, tofu is a product traditionally consumed by senior consumers, however the industry is now targeting young female consumers by launching innovative new products, such as drinkable tofu and flavoured tofu. A great example highlighting how companies are targeting the elderly in the home and technology industry is a pressure cooker named DeliSofter by a spin-off company from Panasonic. The appliance makes a meal soft enough to be swallowed easily, while keeping the appearance and taste of the original meal. On the other hand, while the number of children keeps decreasing, nostalgia has been a tactic of toys and games manufacturers who have revived retro licenses such as Gundam and Sailor Moon in action figures, mobile apps, etc so that the adults who used to enjoy them could once again enjoy and spend money on them. Shifts in workstyle are also creating new demand opportunities in coffee. Ready to drink coffee is traditionally available only in small aluminium cans. These quick, strong shots of caffeine are perfect for middle-aged working males. As workstyle shifts to spend longer hours in the office, newly launched ready to drink coffee drinks in PET bottles attract young office workers, as they favour the resealable aspect and the lighter taste intended to be enjoyed for a long period of time during desk work. In contrast to the energy benefits, companies are looking to also position coffee as a relaxing beverage. As domestic tourism remains flat, the travel industry is welcoming growth opportunities through record international inbound arrivals. Through development of multilingual services and effective promotion, ski resorts such as Hakuba and Niseko have become very popular tourist destinations for inbound tourists. Targeting the inbound tourists, unique concept hotels such as “Tabinos” and “Manga Art Hotel” opened in 2019. These hotels target inbound millennial tourists by featuring the Japanese pop culture “Manga” animation in their design concept. These examples show how important it is to provide unique travel experience in order to attract inbound tourists, and we expect to see more and more players coming up with sophisticated strategies in 2020. 2020 will be an exciting year for Japan on the global stage. As an aged society and mature economy, Japan has much to teach other countries that will soon face similar challenges. Japanese consumer goods and services companies should seize this opportunity to showcase to the world how they are leveraging their know-how and taking the lead on strategies to create demand.

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