The nature of Japanese consumers

The nature of Japanese consumers

Although Japanese consumers have tolerated high prices for a long time, their patience is beginning to wear thin. With the strengthening of the yen in the 1980s, Japanese have begun to travel outside their country with increasing frequency. Once overseas, they are learning just how expensive Japan is.

In fact a Japanese retailer recently has turned 100 ordinary travellers into import agents. Jonan Denki hires people to travel to Europe where they buy designer clothes at retail shops. The travellers bring back the maximum amount of duty free goods, and the retailer resells the goods. Neck ties that go for $140 at swank Japanese department stores are resold by the retailer for $25.

Anecdotal evidence like this indicates Japanese retailing is about to undergo a fundamental shift. The strong yen, the Japanese recession, pressure from the US, and the downfall of the Liberal Democratic Party are all combining to provide the impetus necessary to begin change. This change is leading to a simpler distribution system and a weakening of manufacturers relative to retailers.

Although the recession has made Japanese consumers more cost conscious, the people still want high quality. Quality is measured in both product quality and service quality. The Japanese demand prompt delivery and servicing of quality products, and they're not afraid to pay for it.

Because of space constraints, the Japanese will probably always prefer quality to quantity. Japanese houses are only 60 percent as large as the typical American home. They can't afford to buy too much and then throw unused items in a "junk closet." They will also continue to demand frequent, "just-in-time" delivery of goods.

However because of deregulation, Japanese consumers will enjoy increasing choices. It used to be that quality - at a price - was the only option. But now with discounters appearing on the scene, price and quality trade offs are also appearing.

Traditional customers who want a lot of hand-holding - and are willing to pay for it - still can get that. But for those who know what they want - and don't want expensive frills - they can get it from a discounter or a direct marketer.

This change in the Japanese economy has presented benefits to Japanese consumers, and it has opened opportunities for exporters. As traditional distribution arrangements break up, foreigners finally can take advantage of currency exchange rates that make their products cheaper than comparable Japanese ones.

Before entering the Japanese market, manufacturers must tailor their products to meet Japanese needs and tastes. Instructions and labeling in Japanese are necessary for all but the most esoteric products. A local presence in Japan for servicing and billing probably also is needed.

Much of this initially can be provided by a Japanese trading company. Details about Japanese trading companies are discussed in my tape "Entering the Japanese Market," but suffice it to say that a few Japanese trading companies handle more than half of the nation's imports. Much of this volume is in commodities like oil, but the large trading companies have great abilities in trade financing and distribution.