Lately articles like this one could be seen in several publications. Japan's luxury decline causes shocks all around the globe due to the apparently unshakeable luxury spending of the 90s and early 2000s. If you consider the whole Japanese luxury spending phenomenon a luxury bubble, then the development seen now can be considered anything but a surprise. But I personally disagree with the grave tone of most of the articles that talk about a lasting trend and a reorientation of the Japanese towards frugality and thrift. The economy here will recover. It will take years maybe, but to throw everything over board and expect Japanese shoppers to align themselves with European or American shopping patterns is missing the point. Japanese consumers are insecure, overwhelmed by certain developments and unsure about their future. what is happening in the consumer market now is consolidation process, a juggling of values and a generation gap (of values) that leads to confusion. Social role models are missing and a country that is not used to dealing with subcultures in the open media has difficulties making sense of its own developments. Still, I have the feeling that the actual trend will not be a new equilibrium.Prove me wrong.
I think that all signs point towards a future where the spending on luxury by Japanese consumers will not only recover but absolutely obliterate old sales record. The winners of this game of chicken will of course be the brands that have managed to stay on top of trends and the national psyche during the lean years that will follow.
ReplyDeleteI base this observation on several factors, one being the very slow population decline of this country and the resulting shift in consumer spending that this entails, i.e. fewer people will need to save money for future house ownership and fewer children means that young and middle aged couples will have a disposable income many-fold of what their parents had when they don't need to take their offspring through Japan's costly education system.
There is off course a wild card in the game as well, and that is the (sense) of growing social injustices. While some people end up with more and more disposable income (i.e. middle aged unmarried Tokyo males) other groups will be basically impoverished within the next decade (i.e. single parents in local prefectures).
In a market where 96% of women are aiming to catch the 3% of men who make the required 10 million yen yearly (needed to raise a family of 4 in central Tokyo) you can be sure there will be room for luxury hungry consumers well into the future.