• CONTACT
Search
Close this search box.

Insights into Japan’s Key Consumer Segments in 2024

Published on: May 1, 2024

Japan's Key Consumer Segments in 2024

In the ever-evolving landscape of Japan’s market, understanding the diverse consumer segments is more important than ever. As Japan faces a declining population, the stakes are higher than ever for brands aiming to stay not just afloat but ahead of the curve. Knowing the quirks and preferences of diverse consumer groups has moved from nice-to-have to must-have.

Rewind to the 1990s, and you’ll find the media buzzing about young women dubbed “parasite singles.” These ladies, comfortably nested at their parents’ homes, were free to splurge their sizable disposable incomes on the finer things in life. This era painted a vivid picture of how consumerism twines around personal identity and social status in Japan.

Fast forward to the early 2000s, and there’s a fresh cultural twist with the emergence of the “herbivore men” (草食系男子). These gents, typically in their 20s and 30s, turned the traditional macho script on its head. Instead of chasing cars, they chased skincare routines and favoured family time over flashy dates.

Now, in 2024, the diversity of Japan’s consumer segments is more pronounced than ever. This article provides an in-depth look at the key consumer segments in Japan’s 2024 market landscape, highlighting how brands can effectively meet and engage with each group’s unique demands.

Overview:

The Silver Market: Japan's Ageing Consumer Powerhouse

As Japan strides towards becoming a ‘super-aged’ society, it wears the crown for having the world’s oldest population. Picture this: 29.1% of its populace is aged 65 or older, and amongst them, a striking majority are women.

The nation is home to over 92,000 centenarians, and by 2036, a whopping third of its residents will be in this age bracket. This demographic isn’t just growing. It’s flourishing with financial clout that’s poised to swell significantly in the coming years.

Now, here’s an interesting twist.

Unlike many Western countries where wealth often transfers from one generation to the next, Japan’s substantial inheritance tax rates of up to 55%, mean that a hefty portion of assets remains with the older generation. This financial structure results in a scenario where family wealth does not readily trickle down to younger generations. It creates unique market dynamics where older adults wield substantial economic power.

Currently, this older cohort controls over half of Japan’s financial assets, with a staggering 72% of the nation’s wealth gripped by those aged 55 and above. This percentage is only expected to climb, projected to reach 79% in the next 2 decades. In stark contrast, a mere 28% of wealth is held by individuals under 55.

Insights into Japan's Consumer Segments in 2024s - silver market
Mobile supermarkets are popular among seniors in rural areas in Japan.

Japanese businesses, ever so astute, are keenly tuning their strategies to woo this influential group. They’re rolling out the red carpet with high-quality products designed to enhance life’s golden years. This shift is visible in the burgeoning demand for health-related products and luxury experiences that promise comfort and well-being.

Market insights from Euromonitor highlight that silver consumers in Japan prioritise premium quality over price. They opt for premium quality over price, buying less but investing more in top-notch products. This discerning demographic places a high value on customer service and ethical consumption, with many willing to pay top dollar for products that boast transparency about their origins.

These evolving preferences underscore the vital role the silver market plays in shaping Japan’s retail strategies. As this demographic continues to expand, it becomes an increasingly crucial segment for businesses aiming to succeed in Japan’s competitive market landscape.

Japanese Millennials: Redefining Consumer Habits

Japanese millennials are navigating an economy that’s more of a slow crawl than a sprint, marked by low growth and worrying unemployment rates. This challenging economic landscape profoundly influences their lifestyle and spending habits, setting them apart from the generations that came before.

Most millennials in Japan do not see homeownership or starting a family as attainable or desirable goals. Coupled with dwindling confidence in the national pension system and uncertainty about the future, more than half are prioritising saving over spending.

This cautious financial outlook is evident in their consumption habits. Japanese millennials gravitate towards products that offer good value and support sustainable living. They are increasingly choosing items that promise long-term benefits and minimal environmental impact.

Gender differences also play a role in shaping leisure activities within this demographic. Male millennials tend to favour indulging in pastimes like Japanese comics and video games. Female millennials, on the other hand, exhibit a broader range of interests, with fashion, beauty, cooking, and travel topping their list.

Insights into Japan's Consumer Segments in 2024s - millennials
Unlike the silver market, Japanese millennials are consistently conservative spenders.

The COVID-19 pandemic has notably impacted female millennials in Japan, leading to considerable job losses within this subgroup. This economic hit has significantly altered their spending habits, shifting their focus from splurges to staples — food, personal care, and hygiene products have taken precedence.

The ripple effects of the pandemic have also boosted the popularity of Mercari, Japan’s premier app for second-hand goods, as thrifty shopping becomes more mainstream. Even McDonald’s and Ikea have seen a surge, underscoring a pivot towards value-oriented spending.

And let’s not overlook their digital prowess. With almost every millennial armed with a smartphone, platforms like LINE, Instagram, and X (formerly Twitter) are vital in shaping their purchasing decisions.

For brands eyeing to connect with these millennial consumers, the strategy is clear: tune into their digital frequency with content that resonates, engages, and inspires the value-conscious, environmentally-aware millennial shopper.

Japan's Gen Z: Digital Natives Reshaping the Marketplace

Generation Z in Japan, often dubbed the Satori Generation (さとり世代), is carving a significant niche in the consumer market.

While their wallets might not be as hefty as those in the silver market, their influence is palpable and on the rise. As true digital natives, their engagement with platforms like Instagram and YouTube not only shapes their consumer behaviour but also sets their expectations for brand authenticity and creative expression.

Having grown up in an era marked by economic stagnation and a string of natural calamities, Japan’s Gen Z peers through a lens tinged with pessimism. This worldview has tightened family ties and broadened, albeit somewhat superficially, their social circles compared to earlier generations.

This perspective has led to stronger family bonds and broader, though more superficial, peer relationships compared to their predecessors. These dynamics significantly shape their consumer habits. They are financially cautious and blend online and offline sources to make informed purchasing decisions.

Insights into Japan’s Key Consumer Segments in 2024 - Gen Z

For Gen Z, sustainability isn’t just a buzzword. It’s a priority. They gravitate towards brands that don’t just claim to be ethical but show it in their bones, in every aspect of their operations.

Distinct from earlier generations, who often preferred well-established brands, Gen Z is more likely to explore and support lesser-known brands that resonate with their values. A recent survey by Shibuya 109 Lab, a youth marketing research company linked with Tokyo’s fashion hub, found a striking 71.2% of Gen Zers shrugging off brand names as a deciding factor in their purchases.

This openness to new and smaller brands represents a critical opportunity for global brands aiming to expand their reach. Take, for instance, Zozotown’s Wear platform, where over 10 million users — mostly from Gen Z — swap fashion inspirations and influence one another’s sartorial choices. This digital camaraderie not only drives retail innovation but also rewrites the playbook on brand strategy.

Navigating this Gen Z terrain means brands need to be more than just a label. They need to be a movement. To truly resonate with and captivate this up-and-coming consumer force, brands must craft stories and experiences that reflect a genuine commitment to the values that Gen Z holds dear.

Navigating Japan’s Consumer Landscape

Navigating the complex consumer market in Japan poses a distinctive blend of challenges and opportunities for global brands. From the affluent, quality-centric silver market to the ethically-conscious, digitally-savvy Generation Z, understanding and engaging these diverse consumer segments is crucial for any brand dreaming of making a mark in Japan.

Enter WPIC, your indispensable partner in deciphering this layered market. With our full-service solutions, we excel in cutting through the complexity and noise of the Japanese market. Whether you’re looking to understand consumer behaviour through data-driven insights, engage customers with effective digital marketing strategies, or expand your online presence with advanced e e-commerce solutions, our expertise is your guide.

Whether you are aiming to deepen your market penetration or seeking to establish a foothold, WPIC has the expertise and solutions to propel your brand forward.

Reach out to us today to discover how we can help you unlock the immense potential of your brand in Japan’s vibrant consumer market.

Get content like this in your inbox.

More trending articles

Award - Tmall 5 Star Partner
Award - Tmall Global 2021 TP100 Silver
Award - CCBC 2022 Gold