fbpx
emerging consumer trends in Japan

Ultimate Guide to Emerging Consumer Trends in Japan

The Japanese consumer market, the third largest in the world, is renowned for its diversity and individuality. The consumer market in Japan is changing quickly as technology advances. Understanding Japanese consumer expectations when selecting products is crucial for building lasting relationships. You can open up new market opportunities in Japan by understanding consumer behavior and staying current with target customer preferences.  

This guide offers strategies for companies and startups willing to adjust to these changing trends, making it easier for you to enter and succeed in Japan’s emerging consumer market.

Looking to enter the Japanese market?

Download the free e-book from Tyson Batino, 3x founder and CEO of Scaling Your Company

Download our Japan Market Entry Guide Here

Something went wrong. Please check your entries and try again.
Background Removal (21)

Why Do I Need To Understand Emerging Consumer Trends in Japan?

understanding consumer trends

Businesses can create value and satisfaction by meeting consumers’ preferences and expectations by designing products, services, and experiences. For their product offerings to be relevant in the Japanese market, brands should research consumer preferences, trends, and purchasing behaviors. 

Given how quickly and dynamically consumer preferences can shift in the modern market, your company’s success in Japan depends on how well you can adapt to the latest consumer trends as it allows businesses to keep in touch with what Japanese consumers truly need and want. Understanding market trends and consumer behavior helps your company anticipate change and modify action plans. Additionally, you can adjust your company’s strategies to meet the evolving demands of consumers. 

Analyzing current customer trends will enable you to develop innovative solutions and differentiate your brand from competitors as new ideas and opportunities are discovered. When determining what your audience is searching for online, Statista and Google Trends are excellent resources for market data. By applying these data resources properly when launching a new product or service, you can stay one step ahead of the competition, and build a loyal customer base.

Want To Find Out How Your MVP Will Do in Japan?

Book a free consultation with us and let us help you navigate the Japanese market with expert advice tailored to your needs.

5 Emerging Consumer Trends in Japan

If businesses want to launch a product in Japan, they must first understand consumer behavior as it affects sales, marketing, and product positioning. Market segments are differentiated based on specific attributes, trends, and obstacles. Understanding Japan’s top 5 consumer trends will help you thrive in this competitive market. 

Personal Health Devices and Apps

The number of personal health monitoring devices and apps relating to health consumption in Japan is way greater than ten years ago. People between the ages of 40 and 60 years living in urban areas are becoming more health conscious. This movement is popular because of the growing development of wearable technology, which is becoming increasingly necessary in daily life. 

For example, wearable blood pressure monitor devices like OMRON Heart Guide and Fitbit Charge 5 are essentials to track your physical activity, heart rate, and sleep patterns. An all-in-one app for tracking your nutrition and fitness, such as MyFitnessPal, records your daily food intake, and exercise, and provides personalized health tips. Users can examine their sleep patterns and enhance their sleep quality with the Headspace app, which focuses on mental health and offers guided meditation, mindfulness exercises, and sleep aids. These products are in high demand by a consumer group willing to invest in their wellness and improvement. This opens up a huge business opportunity for health tech companies. 

For a broader coverage of tech in Japan, check out our article on Japanese Tech Companies!

Subscription-Based Services in Japan

Subscription services for personal care, food, drink, and leisure are growing in popularity in Japan. These subscriptions support businesses in building loyal, repeat customers. Moreover, Japanese customers value the convenience and cost savings of having their favorite products or services delivered regularly. Therefore, to leverage the trend and ensure repeat engagement and satisfaction, entrepreneurs must develop state-of-the-art subscription services that are tailored to the respective needs and preferences of Japanese POLs. 

A famous Japanese subscription service, Sakuraco delivers traditional Japanese teas, snacks, and sweets to customers all over the world. The company builds its loyal customer base by providing exclusive products that are difficult to find outside of Japan. Besides, customers can save time and money by receiving a monthly box of customized premium items instead of making individual purchases. The service also customizes its offerings to celebrate Japanese culture and seasonal themes to appeal to both local and foreign clients who value authentic Japanese experiences.

Smart Home Technology

Accordingly, Japanese citizens are increasingly using voice-activated aids, non-toxic gadgets, and state-of-the-art security equipment to improve their homes’ atmosphere. Smart factories are also promoting the development of technologies such as artificial intelligence and the Internet of Things to increase productivity and efficiency. People who are familiar with modern technology are particularly attracted to the Internet of Things in this regard. As a result, they can form more intelligent and efficient homes. The presented facts describe a developing market in Japan – the demand for smart home developments that meet the current needs of urban households. 

One of the best examples of how smart home technology is being adopted in Japan is Panasonic. They have advanced security systems that can be controlled remotely, non-toxic air purifiers, and voice-activated gadgets. Panasonic develops interconnected home ecosystems that enhance energy use and raise appliance efficiency through the use of AI and IoT. This innovation is driven by their smart factories, which satisfy the needs of tech-savvy urban consumers who desire efficiency and convenience in their homes. This is reflective of Japan’s expanding demand for smart home innovations.

Ethical Consumption

Consumers are now well-informed about responsible consumption and make decisions based on the sustainable and responsible manufacturing of goods. Thus, locally produced products, fair trade, and sustainable environmentally friendly goods are in high demand. Businesses will have to adjust their activities to these values to remain competitive and needed in the market while Japanese customers increasingly look to a more socially and environmentally friendly life.

MUJI, a popular Japanese retail company, is a great example of how businesses are meeting the demand for ethical consumption in Japan. They use sustainable materials like organic cotton and recycled fibers, reduce waste, and ensure their products are made ethically. MUJI supports fair trade, ensuring fair wages and safe conditions for workers. MUJI also partners with local craftsmen and small businesses, reducing their carbon footprint. Refillable bottles and energy-efficient appliances are just a couple of the eco-friendly products that MUJI sells. They also use in-store displays and online content to educate their customers on how to make ethical decisions.

Curious about ethical consumption and sustainability? You might like our article on SDGs in Japan!

Virtual and Augmented Reality Shopping Experiences

Virtual reality and augmented reality are being used more and more by Japanese retailers to create unique buying experiences. Customers may try on goods before purchasing them because of these advancements, which are truly changing the manner people shop. Virtual changing rooms at clothing shops and AR apps that demonstrate to clients how furniture will appear in their houses have become popular. Businesses can gain a competitive edge in attracting tech-oriented customers by embracing VR and AR, which can improve consumer engagement and satisfaction. 

A world-renowned Japanese clothing company, Uniqlo, has improved the shopping experience by introducing virtual changing rooms. Customers can virtually try on clothing using a digital mirror in-store or via their mobile app by utilizing augmented reality technology. Customers can now see how various outfits fit them virtually without having to try them on in person, which saves time and improves convenience and hygiene.

IKEA Japan’s “IKEA Place” app also leverages augmented reality. Before making a purchase, customers can use the app to see how furniture will look in their homes. By using the cameras on their smartphones to place true-to-scale 3D models of IKEA products in their own living spaces, users can make more informed decisions and make sure the furniture fits their style and space.

Are you interested in starting a business aside from the trends we’ve mentioned? Don’t worry! Our article on Chambers of Commerce and Trade Shows in Japan will show you opportunities to connect with people who share the same vision as you!

What Impacts Emerging Consumer Trends in Japan

emerging consumer trends in Japan

Entering the Japanese market requires a deep understanding of its ever-evolving consumer landscape. As demographics and technology continue to reshape consumer habits, businesses must adapt their strategies to stay relevant and competitive. 

How different demographics in Japan consume different products and services

Demographic shifts, especially the aging population and urban migration, have a major impact on Japan’s consumer market. These changes are redefining what consumers want in terms of different goods and services.

  • Young Adults (ages 20 to 39): This demographic typically has a preference for sustainable products, fitness equipment, and digital tech products. They prioritize convenience and health when making purchases, and they are quick to adopt new technologies.
  • Adults between the ages of 40 and 64: Middle-aged consumers prioritize durable goods, healthcare products, and family-oriented services. The ease of use provided by contemporary technology is balanced with the customs of traditional shopping methods.
  • Seniors (65 years of age and above): Healthy food items, leisure activities, and healthcare products are in high demand among this demographic. Technology that improves their general quality of life, safety, and health are what they favor.

Increasing Demand for Healthcare Services: With a sizable population 65 years of age and older, Japan has one of the oldest populations in the world. This shift in demographics has multiple effects on consumer demand and preferences. 

The demand for home healthcare services, prescription drugs, and medical care is rising. There is a growing demand for goods like health supplements, mobility assistance, and blood pressure monitors. For instance, firms such as Omron and Panasonic are broadening their selection of health monitoring devices designed specifically for elderly people.

Urban Migration: Consumer demand in cities is changing as a result of urban migration, especially among younger demographics. AI-powered home assistants, security systems, and automated lighting are among the products that younger, urban consumers are more likely to embrace. As an example, businesses like SoftBank and Sony are setting the standard for IoT and AI integration into home goods.

Transportation Solutions: With the growing popularity of electric scooters, bicycles, and car-sharing programs, urban mobility is also changing. Businesses like Panasonic and Yamaha are setting the standard by offering city people affordable, effective, and convenient ways to commute.

Solution for Compact Living: Due to the country’s small living spaces, particularly in urban areas, space-saving furniture and energy-efficient appliances are highly necessary in Japan. Businesses that provide products that optimize functionality in compact spaces, such as MUJI and Nitori, are well-known for their minimalist designs.

How Tech Evolution Impacts Emerging Consumer Trends in Japan

Augmented and virtual reality (AR) technologies are enhancing the online shopping experience by enabling customers to visualize products more realistically. To help customers visualize how furniture would look in their homes, Japanese furniture retailer Nitori applies augmented reality (AR) in their technology. 

AI-driven suggestions, advanced shipping, and mobile payment methods are enhancing the convenience of online shopping. The ease of online shopping and home delivery services is preferred by Japanese consumers, especially the working population. Rakuten and Amazon Japan have experienced a notable expansion in their online stores, offering a large selection of goods that are swiftly delivered to city dwellers.

Advancing the development of digital wallets:  Mobile payment apps that offer ease and efficiency for transactions, like PayPay, Line Pay, and Rakuten Pay, are extensively utilized among Japanese consumers. PayPay, for instance, has become a preferred payment method due to its popularity gained through promotions and cashback offers. Marketing and customer service in Japan are being upgraded by artificial intelligence (AI) and data analytics. Using AI, Uniqlo makes personalized clothing recommendations for its customers based on their preferences, resulting in a more satisfying shopping experience.

What Drives the Japanese Consumer’s Evolving Values and Brand Loyalty?

Pursuit of Health and Wellness: Start-up founders and entrepreneurs, who are willing to succeed in the dynamic Japanese consumer market, must grasp the aspects that influence consumer values and brand loyalty. The market is constantly changing. The growing emphasis on health and wellness is one key trend influencing consumer behavior in Japan. The Japanese consumer’s recent surge in health consciousness has had a noticeable effect on product markets. Products that promote well-being and offer health benefits are becoming more and more popular in the market, ranging from organic foods to fitness trackers. Businesses need to modify their offerings to conform to the changing preferences of consumers who are placing a higher priority on their health.

According to a survey conducted by Japan’s Ministry of Health, Labour and Welfare in 2021, 70% of Japanese consumers indicated that they are more conscious about their health and wellness compared to five years ago. 

Eco-friendly Choices: The increasing significance of eco-friendly options in consumer behavior is another significant trend influencing Japanese consumers. As a result of a larger global trend towards responsible consumption, sustainability, and ethics are increasingly important considerations when making decisions about what to buy. Products that respect social responsibility, the environment, and ethical production practices are becoming more and more appealing to Japanese buyers. This focus on sustainability highlights how important it is for companies to give eco-friendly options and sustainable practices a top priority to satisfy customer demands.

A popular Japanese retailer, Muji has expanded its range of organic cotton products in response to customer demand for environmentally friendly and sustainable products. In its product lines, the company emphasizes minimal packaging and eco-friendly materials. 

Another famous beverage holding company in Japan, Asahi Breweries, introduced an innovative approach by using plant-based plastics for their beverage bottles, significantly reducing their carbon footprint and appealing to eco-conscious consumers.

Staying Brand Loyal: For Japanese consumers, trust is extremely important. To earn loyalty, brands must understand and meet consumers’ needs and values, demonstrating through actions their commitment to serving them ethically and empathetically. Trust grows over time, leading to loyalty. By committing to quality, service, and strong values, brands can establish lasting, meaningful relationships with this discerning market. Brands that maintain high standards, offer reliable products and provide excellent customer service tend to retain loyal customers. 

Learn more about norms and principles common in Japanese Business Culture through our podcast episode with Rochelle Kopp!

Although brand loyalty is high among Japanese consumers overall, it is higher among the older population. New product demand is high, and while brand loyalty is dropping, consumers generally accept brand innovations. When seeking product advice, Japanese consumers mostly watch videos and subscribe to influencers. 

According to a 2023 survey by Statista, brand loyalty is particularly high among Japanese consumers aged 50 and above, with 82% reporting strong loyalty to their favorite brands compared to 60% among those aged 18-29.

One of the popular companies that successfully maintain high brand loyalty through quality and customer service is Shiseido. For many years, the brand has led the Japanese cosmetics industry due to its focus on innovation and customer service. 

These statistics and examples reflect the demographic differences in loyalty and the growing influence of digital media in consumer decision-making.

The Role of AI and Automation in Personalizing Customer Experience

AI trends

Increasing sales and improving customer engagement through personalization has become vital for businesses. To increase purchase rates, decrease cart abandonment, and enhance email performance, the main objective is to increase conversions through more pertinent and urgent interactions. Businesses can maximize their efforts by doing ongoing refinement based on real-time data. 

AI in Retail: AI-powered personalization takes this to the next level by analyzing vast amounts of data to understand individual customer preferences. Using information from previous browse and purchases is the thing AI-powered systems can deliver personalized marketing messages and product recommendations. This makes it feasible for companies to provide focused customer service, customized website experiences, personalized email campaigns, and product recommendations.

With the ability to present pertinent content at the appropriate moment and boost interaction and conversion rates, AI-driven personalization improves user experience. Virtual and augmented reality technologies, like those used in furniture retailers’ virtual showrooms, also make interactive experiences possible. 

Amazon Personalize, an AI-driven service that delivers tailored recommendations and marketing messages, is a successful real-life example that uses AI to analyze customer browsing and purchase history to provide personalized product recommendations. Their recommendation engine is a key factor in their sales strategy, suggesting items that customers are likely to buy based on past behavior.

Automation in Services: Customer interactions are becoming more individualized and efficient for each business with the aid of automation services. By advancing innovative technologies like artificial intelligence (AI) and machine learning, businesses can analyze massive amounts of data to obtain a deeper understanding of the preferences and behaviors of their customers.

Technologies such as automated order fulfillment systems, chatbots, and self-checkout kiosks are transforming customer service in the service sector. These technologies ensure that clients receive reliable, superior service, simplify processes, and reduce wait times. When a personal touch is most needed, this frees up human employees to handle more complex tasks.

Companies can interact with customers more proactively thanks to automation. Furthermore, companies can offer customized discounts based on a customer’s shopping preferences or send out reminders for abandoned carts. In addition to improving customer satisfaction, these customized touches also boost loyalty and conversion rates.

One of the most visible examples is Domino’s Pizza. Domino uses automation in the form of their AI-powered virtual assistant, DOM, to take orders via voice and text. They also employ automated order tracking systems to provide real-time updates to customers.

All these examples highlight how AI and automation are being leveraged to enhance personalization, streamline processes, and improve customer engagement and satisfaction.

Interested in AI startups in Japan? Check out our article Unpacking Tech Opportunities for AI Startups in Japan!

Conclusion

To conclude, this all-in-one guide offers new market opportunities for businesses willing to adapt to these evolving trends. Businesses that are willing to succeed in Japan must have a thorough understanding of consumer behavior and preferences, which calls for a lot of research. By aligning your company’s strategies and products with these evolving trends, your brand can forge strong bonds with Japanese consumers and gain a competitive advantage. 

If you liked this article, you might also enjoy our article about 10 New Business Ideas in Japan for 2024!

2X-5X YOUR BUSINESS IN JAPAN

Subscribe to our bi-monthly newsletter to stay updated on the latest podcast episodes, and get notified on our free monthly seminar featuring experienced entrepreneurs and experts.

Something went wrong. Please check your entries and try again.
Bottom Banner (1)
Scroll to Top