State of the Nation: Japan is ready for a steady positive growth period
Japan is in a period of steady positive growth as it accelerates into 2023, Rikuichirou Morinaga, the principal researcher of the media business innovation department at Dentsu Media Innovation Lab. He shares his insights into what is making Japanese consumers tick.
/ Image by Masashi Wakui from Pixabay
In 2023, Japan will finally be over the COVID-19 pandemic. Dawn will come slowly, unseen. Like the Japanese team in the FIFA World Cup Qatar 2022, we will not run away (from difficulties). We will never give up (until our wishes come true). We will not abandon you (so that everyone can shine). That is what we want for Japan!
In 2023, the Japanese economy will be affected by the economic slowdown in Europe and the United States, and prices will continue to rise. Furthermore, the yen’s depreciation trend will remain unchanged. On the other hand, the economy will continue to grow, albeit moderately, against the backdrop of Japanese companies' robust capital investment plans.
The digital transformation of society as a whole will continue to evolve without stopping. The same can be said of the advertising market. With the continued strong traction of digital advertising, the entire advertising market is expected to grow further.
According to Dentsu’s Global Ad Spend Forecasts, the Japanese advertising market in 2023 will grow by 1.5% year-on-year. Economic activities accompanying the movement of people (including the effect of inbound tourism), such as various economic measures, events both within and outside of Japan, travel demand, and other factors, are also gaining momentum. An increase in advertising placements is expected.
Consumer sentiment is lifting
Rising prices include increased energy prices such as those for electricity, gas, and oil and price hikes for many products and services, including daily necessities. Consumer sentiment continues to be frugal and savings-oriented, as evidenced by the popularity of discount supermarkets and 100-yen shops. It is undeniable that people are quite cautious when it comes to consumption. Meanwhile, fatigue from the COVID-19 pandemic can also be seen as signs of a change in people’s minds with the lifting of self-restraint measures after around three years. Now they can no longer restrain themselves from consumption behaviour.
Various economic support measures by the national and local governments, such as the “National Travel Discount Program,” will boost active consumption behaviour. Furthermore, with the rise in awareness of SDGs, consumption behaviour that is conscious of a sustainable society, such as food loss reduction and power-saving goods, will gain momentum.
In addition, cashless payments, such as cashback reward points, are becoming more common. The use of smartphones is widespread across many age groups, and point-based purchases through QR code payments will further stimulate consumption. Moreover, online medical examinations and the use of My Number cards as medical insurance cards are also making progress.Various large-scale events (including music festivals such as outdoor concerts) will also be fully implemented.Furthermore, interest in asset management, such as investment education among young people, will increase across all age groups.
Japan continues to open up
As people move around more, the consumption of fashion, accessories, and cosmetics will increase. The same can be said of various services such as transportation, eating and drinking, travel, and moving house. Online shopping will continue to perform well. Due to the effect of the weaker yen, the number of tourists from overseas will increase. Economic benefits from inbound tourists can also be expected. In addition, products and services with keywords such as “disaster prevention” and “healing” will also grow in popularity as people seek greater peace of mind.
Japan is experiencing strong demand for events such as the Tokyo Marathon, World Baseball Classic, G7 Hiroshima Summit, FINA World Swimming Championships 2022 Fukuoka, and Japan Mobility Show (former Tokyo Motor Show). In addition to large-scale music festivals, traditional festivals from all over Japan, such as the Sapporo Snow Festival, Hakata Dontaku Festival, Sanja Festival and Gion Festival, are also held in earnest. Meanwhile, state-of-the-art events such as X-sports and e-sports will evolve even further.
Content maintains popularity
Video streaming content platforms such as Amazon Prime, TVer, Netflix and ABEMA, which can be viewed on Internet-connected TV receivers, will continue to perform well. Since media contact becomes a competition for disposable income and time in one’s life, double-speed viewing and short videos while listening to voice media will continue to be popular.
Poignant movies, dramas, sports content, etc., will be well received across all age groups. Romance reality shows will remain strong, especially among young people and their parents. Online artists and hit songs from TikTok, YouTube, Instagram, etc. will continue to be popular.
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Here we go! Things start now! Japanese society is also undergoing digitalization, although belatedly. It will evolve further, such as the style of watching video streaming services on a TV receiver, which has become popular due to the COVID-19 pandemic. Because of the depreciation of the yen, overseas companies can expect cost-effectiveness when investing in Japan.
Furthermore, since people’s movements will become more active, the use of print media and real-time events can also be considered. In fact, Japan has many wonderful assets that are still unknown. Isn’t this an opportunity to effectively select media that can achieve marketing goals and develop advertising marketing efficiently?
Rikuichirou Morinaga, is the principal researcher of the media business innovation department at Dentsu Media Innovation Lab, Japan.