Japan’s Changing Consumer inthe Age of Reiwa and COVID19

Presentation to Japan America Society
Dallas-Fort WorthPrepared by Dominic Carter, CarterJMRN KK
14th April 2020
1

Content

1.

Japan Consumer Sentiment Survey

2.

Disrupting Reiwa

3.

Direct Corona Crisis Impacts and Medium-Term
Outlook4.

Brand USA

5.

Big Picture Opportunities for US Businesses© Kyodonews

2

In 2017, we started
polling Japanese
every year in Spring3

Carter Group – Japan Consumer Sentiment Study

TimingMarch 2020 (13th-18th)
April 2019
April 2018
March 2017
Area

MethodWeb,
self-completion
N=1,000

Japan nationwide

Population representativeby region

Age

15-69

Population
representative4

GenderMales and females
Population
representative

The dawn of Reiwa in 2019held the promise of
demographically drivensocial change and renewal
in society© Instagram by gkrk_0219

5Dealing with a society with dramatically less people of working age
The four macro trends shaping modern Japan

Changing world ofworkJapan is facing a major labor
shortage, with no clear
solution – robots, increased
female workforce and“imported” labor are all
being engaged

6

Women power
A record number of working
age women now hold jobs inJapan, yet traditional work
structures – such as the twotrack work system – andattitudes are creating
resistance

Generational
dynamics
Japan is the most aged
country in the world. An
unprecedented problem,with no firm roadmap.
Generations may or may nothave common interests

Internationalization
The country is alreadyexperiencing a record
tourism boom, even before
hosting both the Rugby
World Cup 2019 and The
2020 Olympic GamesJapan’s working habits: total year on year
Japanese increasingly feel that change around work must take place

100%
21%
80%
60%

26%
68%

59%
38%

42%
Strongly agree

40%

Somewhat agree
20%

33%
4%

0%

5%
3%

2019
7

Neither

24%

Somewhat disagree
2%Strongly disagree

2020

Carter Japanese Sentiment Survey March 2020 – "Q2.7 In order for Japan to remain healthy, its working habits and structure need to change”
Base: Nationwide, all respondents (males/ females 16-69) n=1,000Japan’s working habits: by gender year on year
Females drive the attitude that change around work must take place

100%
80%
60%

63%
37%

17%

23%

26%

74%

57%

63%
40%

30%

40%
44%

Strongly agree

40%

Somewhat agree
20%
0%

8

30%

28%

5%
4%

6%
3%

2019 Males

2020 Males

37%

Neither
21%
4%2%2019 Females

Somewhat disagree
4%1%Strongly disagree

2020 Females

Carter Japanese Sentiment Survey March 2020 – “Q2.7 In order for Japan to remain healthy, its working habits and structure need to change”
Base: Nationwide, all respondents (males/ females 16-69) n=1,000

Sentiment on women’s progress in society: total year on year
Women’s progress in society is slowly gaining ground

100%
80%

5%
33%

6%
41%

38%
35%

60%
40%

42%

37%

Strongly agree
Somewhat agree

20%
0%

9

Neither
14%

17%

Somewhat disagree

6%6%Strongly disagree

2019

2020

Carter Japanese Sentiment Survey March 2020 – “Q2.6 I feel that women are making progress towards equality in society”
Base: Nationwide, all respondents (males/ females 16-69) n=1,000

Sentiment on women’s progress in society: by gender year on year
The gap is closing but men are more likely than women to feel that progress is being
made towards equality
100%
80%

6%

41%

6%

7%
47%

37%

44%

26%

6%
32%

33%

39%

60%
40%

45%
39%

0%

2019 Males
10

15%

16%
5%

Strongly agree
Somewhat agree

20%
11%
4%

37%

36%

21%

2020 Males

16%
9%2019 Females

25%

18%
7%

Neither25%

Somewhat disagree
Strongly disagree

2020 Females

Carter Japanese Sentiment Survey March 2020 – “Q2.6 I feel that women are making progress towards equality in society”
Base: Nationwide, all respondents (males/ females 16-69) n=1,000

The Japanese economy has been very strong in recent years
Monthly Unemployment rate in Japan(Jan. 1990 – Jan. 2020)
5.5%
6%

5%

4%

2.4%

2.0%

3%

2%

1%

1991: Bubble Bursts

11

2008: Lehman ShockJanuary 2020

Source: Statistics Bureau – Ministry of Internal Affairs and Communications of Japan: http://www.stat.go.jp/data/roudou/longtime/03roudou.html#hyo_1

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

0%

There has been a strong degree of optimism around on Tokyo Olympics 2020
100%
16%
80%
60%

39%

Strongly agree

40%
26%
20%
0%

55%

Somewhat agree
Neither can say

12%

Somewhat disagree

7%Strongly disagree

I look forward to the positive impact
on the Japanese economy thatTokyo Olympics will bring
12

Carter Japanese Sentiment Survey March 2020 – “Q2-10 to 14. Please indicate your level of agreement with the following statements
Base: Nationwide, all respondents (males/ females 16-69) n=1,000But in Japan disasteralways seems like it’saround the corner.
In fact, disasters arepart of life...
13

Disasters are part of the landscape in Japanese life
Preparedness prevails in Japanese sentiment
100%
20%
80%
60%

71%
51%

40%
20%

21%

0%

6%
2%

Strongly
Agree
Somewhat
agree
Neither can say
Somewhat disagree
Strongly disagree

Disaster is part of life in Japan

14

Carter Japanese Sentiment Survey March 2020 – “Q53. Please read each of the statements below and tell us to what
degree you agree/ disagree.”
Base: Nationwide, all respondents (males/ females 16-69) n=1,000What’s unique about this crisis seems to be thelevel of personal responsibility and individual
decision people need to take to navigate throughitConsumption of products and experience has
already become much more conscious
We are likely to see a re-ordering of needs inmany consumer categories as we move out of
the crisis

15

COVID-19
Snapshot of Direct
Impacts

16

Covid-19 timeline for Japan
Covid-19 Impact on Japanese Nationals(Diamond Princess passengers excluded)
2000

Killed1800

USA142,000+
1896

Infected

1600
1400
1200
1000

818

800
600
293

400
200
0

0

1

Jan. 15
Covid-19
alerted in Wuhan
late Dec.

04Jan. 27

0

26

Feb. 81

94

Feb. 20

Diamond Princess passengers inquarantine
Japanese nationals
arrive back from
Wuhan

17

USA
2,400+

Sources: Japan data (Japan JX 通信社) and global data (John Hopkins CSSE, WHO)

7

24

56

Mar. 3Mar. 15

Mar. 30

Schools closed
Carter’s
survey (13-18
March)

Olympics
postponed

Concern over selected elements
Grave concern centers around the economy – more so than for personal wellbeing
100%

1%
3%
8%

80%

1%
6%
13%

32%

60%

3%
9%

4%
9%

19%

20%

6%
13%

19%

41%
35%

41%

Not at all concerned

29%

56%
39%

30%

31%

TransportationJob
securityin general

25%

22%

Massive
restrictions
on all kindsof activities

Availabilityof dailynecessities

Familywell being

16%
Food/
water
safetyCarter Japanese Sentiment Survey March 2020 – “Q47 (1-8). How concerned are you now over each of the following?”
Base: Nationwide, all respondents (males/ females 16-69) n=1,000

Not very concerned
Neither can say

32%

0%

18

25%

22%

40%

Economic
downturn

7%

27%
40%

20%

3%
13%

Somewhatconcerned
Very concernedAssessment of the impact on their personal life today
At least some impact is seen by 4 in 5 people
100%
17%
80%
60%
62%
40%

82%

No impact at allSome impact
Major impact

20%
20%
0%

Today
19

Carter Japanese Sentiment Survey March 2020 – “Q49. Given the Coronavirus situation now, how would you assess the impact it has on your personal life today?”Base: Nationwide, all respondents (males/ females 16-69) n=1,000When uncertainty
strikes, Japanese canturn their spending off
like a tap
20

Impact on personal spending in the next 1-6 months: net gain/ loss analysis
Non-essentials are hit hard in the very short term, but will see some recovery over time
DINING OUT

Net LOSS in:
1-2 months
3-6 months

GROUP ACTIVITIES-41-29
FASHION GOODS

21

-40
-28
TAXI RIDES

-17
-13

MUSIC CONCERTS/ENTERTAINMENT SHOWSTHEME PARKS

-38
-32

-35
-25
HOUSEHOLD APPLIANCES/
ELECTRONIC DEVICESJEWELERY-17-16

CINEMA

-11
-10

-27
-28
RELAXATION PRODUCTS &SERVICES-4-4

Carter Japanese Sentiment Survey March 2020 – “Q51a/ b. How would you see your personal/ household spending for each of the following
categories change in the next 1 to 2 months, and 3 to 6?”
Base: Nationwide, all respondents (males/ females 16-69) n=1,000-3-6Agreement to the way the Government gives confidence to people
Disapprovers outnumber approvers in terms of the daily-life confidence the Japanese Government
gives to people
Strongly
disagree17%
Statement shown:
The Government is giving
you enough confidence tomaintain your normal
lifestyle and spending
habits in most areas

22

Somewhatdisagree29%

Strongly agree
6%
Somewhatagree
19%Neither
29%

Carter Japanese Sentiment Survey March 2020 – “Q52. In terms of the way the Japanese Government is addressing the Coronavirus situation now,
assume that you have heard such an opinion as below. To what extent do you agree/ disagree to this?”
Base: Nationwide, all respondents (males/ females 16-69) n=1,000

Impact on personal spending in the next 1-6 months: net gain/ loss analysis
Certain categories stand to gain throughout the crisis
FACE MASKSNet GAIN in:
1-2 months
3-6 months

ONLINE SHOPPING+27+17
E-BOOK

23

HOME DELIVERY SERVICES+23+16
VIDEO GAMES+6+1

STREAMING SERVICE(MUSIC/ MOVIE)

+11
+4

+10
+4
SKINCARE

SUPPLEMENTS+6+2

STREAMING SERVICE(EDUCATIONAL)

+2
-1

0
-3

Carter Japanese Sentiment Survey March 2020 – “Q51a/ b. How would you see your personal/ household spending for each of the following
categories change in the next 1 to 2 months, and 3 to 6?”
Base: Nationwide, all respondents (males/ females 16-69) n=1,000+7+1Prospect of the impact on their personal life in the future
Perceptions of certain impact are mostly being replaced with uncertainty as people look into
the future
100%

10%

12%

50%

49%

24%

80%
60%

80%

69%

40%
20%
0%

13%
30%
10%
1-2 months
from now

24

32%

20%
18%
3-6 months
from now45%

No impact at allSome impact
Major impact

31%

Cannot predict

1 yearfrom now

Carter Japanese Sentiment Survey March 2020 – “Q50. How would you assess the impact the Coronavirus situation could have on your personal life, for eachof the following future periods?”

Base: Nationwide, all respondents (males/ females 16-69) n=1,000Description of their working environment
In mid-March, nearly 70% of full-time workers largely see their working environment ‘as usual’Some staff are Other
commuting in off 4%
peak hours
10%

Some staff are
working remotely/ via
tele-working
17%

Business as usual
39%
Business as usual
except offices in theaffected areas
30%

25

Carter Japanese Sentiment Survey March 2020 – “Q54. Considering the current situation with Coronavirus, which alternative would best describe thecurrent situation in your working environment?”
Base: Base: full-time employed respondents (males/ females 16-69) n=475

How is consumer confidence tracking
now vs previous years?
26

Overall economic sentimentPessimism was slowly creeping up year on year but the crisis in March 2020 has seen a negative
step-change
100%

2%
17%

19%

3%
16%

19%

5%
14%

19%

80%
60%

32%

37%

40%

2%
6%

8%

14%

31%
Strongly more positive

40%
25%
20%
9%
0%

27

34%

27%

76%

30%
45%

37%

45%

More positive
No change
Somewhat less positive
Strongly less positive

15%

8%

10%
6%

5%

2%

2017

2018

2019

2020

Don't know

Carter Japanese Sentiment Survey March 2020 – “Q1.1 Please indicate how you currently feel about the condition of the Japanese economy”

Base: Nationwide, all respondents (males/ females 16-69) n=1,000Personal consumer sentiment
The slightly more positive trend that personal financial prospects followed have receded, as
uncertainty prevails
100%

2%
10%

12%

3%
13%

16%

5%
13%

18%

4%
10%

14%

80%
60%

45%

41%

No change
Somewhat less positive

30%
25%

20%

28

More positive

39%

40%

0%

Strongly more positive

32%

38%

24%

37%

23%

50%

37%

13%

13%

14%

20%

6%

6%

6%

4%

2017

2018

2019

2020

Strongly less positive
Don't know

Carter Japanese Sentiment Survey March 2020 – “Q1.2 Please indicate how you currently feel about your personal financial prospects regarding the wider
economy and your place in it”

Base: Nationwide, all respondents (males/ females 16-69) n=1,000

Confidence about their future condition in life
Personal confidence in their future life is being eroded but, on the whole, looking quite resilient
100%
80%

13%

6%
34%

21%

26%

7%
32%

23%

30%

Strongly agree

60%
40%
20%
0%

Neither
Somewhat disagree

22%
5%
2018

29

40%

40%

Somewhat agree

38%

17%
27%

12%
2019

Strongly disagree

20%
29%

12%

32%

2020

Carter Japanese Sentiment Survey March 2020 – “Q2.2 I feel confident and positive about my future condition in life”

Base: Nationwide, all respondents (males/ females 16-69) n=1,000Projected spending: one year from now
Pattern is remarkably consistent year on year
100%
80%

4%

6%
26%

32%

22%

7%

8%
26%

33%
25%

33%
26%
A lot more

60%
40%

Some more
63%

57%

About the same

51%

54%

A little less
A lot less

20%
0%

9%
3%
2017

30

12%

7%
4%

11%

2018

8%
5%
2019

13%

12%
4%

16%

2020

Carter Japanese Sentiment Survey March 2020 – “Q13.1 Thinking about your own needs and that of your family, those expenditures you will need to make out of necessity,
those costs that are imposed on you, as well as those expenditures you would like to make for your own happiness and fulfillment, do you see yourself and your householdspending more or less in - one year”

Base: Nationwide, all respondents (males/ females 16-69) n=1,000Projected spending: two to five years from now
Optimism persists as Japan looks further into the future
100%
80%

7%

11%
39%
28%

26%

12%

12%
38%

33%
26%

39%
27%
A lot more

60%
40%

Some more
50%

43%

38%

44%

12%
6%
2017
31

A little less
A lot less20%
0%

About the same

18%

11%
7%

18%

2018

12%
7%
2019

19%

15%
7%

22%

2020

Carter Japanese Sentiment Survey March 2020 – “Q13.2 Thinking about your own needs and that of your family, those expenditures you will need to make outof necessity, those costs that are imposed on you, as well as those expenditures you would like to make for your own happiness and fulfillment, do you see
yourself and your household spending more or less in – Within the next 2-5 years”

Base: Nationwide, all respondents (males/ females 16-69) n=1,000

How is the US perceived through the crisis?
32

Current opinion of the US
Sentiment about America improves incrementally year on year
100%
80%

4%

5%
26%

31%

23%

6%
27%

29%

8%
35%

30%

38%

60%
40%

48%

53%

20%
0%

12%
4%
2017

33

18%
16%

7%

45%

Strongly favorable

45%

Somewhat favorable
Neutral

25%

2018

14%
6%
2019

20%

13%
4%

17%

Somewhat unfavorable
Strongly unfavorable

2020

Carter Japanese Sentiment Survey March 2020 – “Q3. Please indicate how favorable your opinion is of the United States as a country”

Base: Nationwide, all respondents (males/ females 16-69) n=1,000

President Trump: Not Japan’s favorite American
A generally negative opinion of Trump has been improving
100%
80%

2%

1%
7%

8%

38%

8%

3%
10%

36%

25%

30%

20%
24%

29%

2017

2018

12%

Strongly favorable
Somewhat favorable

24%
49%

44%

24%

20%

2019

2020

0%

34

16%

40%

25%
54%

54%

15%

36%

60%
40%

12%

4%

No change/Don't know
Somewhat unfavorable
Strongly unfavorable

Carter Japanese Sentiment Survey March 2020 – “Q21. Please indicate how favorable your opinion is of US President Donald Trump and his administration”

Base: Nationwide, all respondents (males/ females 16-69) n=1,000

Consumer perceptions of US brands
Opinions towards US brands have turned slightly less favorable over a year ago
100%
80%

3%
20%

23%

6%
26%

32%
28%

12%
11%

60%
40%

7%

9%
37%

28%

35%

13%

11%

Strongly favorable
Somewhat favorable

56%

48%

40%

45%

Depends on the brand
Neither/ Don't know

20%
0%

6%
3%
2017

36

9%

6%
3%

9%

2018

6%
1%
2019

7%

9%
4%

13%

Somewhat unfavorable
Strongly unfavorable

2020

Carter Japanese Sentiment Survey March 2020 – “Q7. Please indicate how favorable your opinion is of US brands and their associated goods, products andservices. You may also indicate that you don't know or don't have an opinion”

Base: Nationwide, all respondents (males/ females 16-69) n=1,000

Digital companies dominate among Japan’s favorite US brands

Popular American brands in Japan – Top 10 (Carter Survey, April 2018)

14%

7

10%

3%

7%

2%

% respondents who mentioned the brand | Base: Japan |37

April 2018

Visiting the US for pleasure
The desire to travel to the US has held up well
“To what extent would you like to travel to the US?”
52%
2018

23

29

17

11

20

61%

Pleasure

2019

31

30

14

10

15

29

15

10

16

59%
2020

38

30

CarterJMRN: Japan Consumer Economic Sentiment Survey 2018, 2019 & 2020

The most popular destinations of 2020
The US is one of few Western countries gaining popularity as a destination“What are your preferred destinations for international travel?” [NET]
35%

2018

2019

2020

30%
25%
20%
15%
10%
5%
0%
United States

39

TaiwanAustralia

Singapore

FranceCarterJMRN: Japan Consumer Economic Sentiment Survey 2018, 2019 & 2020

Italy

South Korea Great Britain New Zealand

CanadaFamiliarity with Integrated Resorts
General familiarity with IR has increased over a year ago, as a result of exposure to all the mass
media coverage, including on-going discussions in the National Diet, activities and events
100%
80%

6%
38%

6%
44%

48%

60%
40%

32%
20%
0%
2019
40

I know quite a bit about it
I know something about it
I have only heard or read about it

35%

21%

54%

I know nothing about the topic

14%
2020

Carter Japanese Sentiment Survey March 2020 – “Q28.How familiar are you with the plans for several integrated resorts in Japan?”Base: Nationwide, all respondents (males/ females 16-69) n=1,000

Economic considerations are foremost among supporters. Expect this to become
more relevantWill generate tax revenue that will benefit society locally and nationally48%

Will bring economic benefits from increased tourism

39%

Will increase the level of entertainment and leisure quality in Japan36%

Enjoy new experiences and facilities not commonly found in Japan

36%

Boost to employment, businesses and the economy during construction

36%

Boost to employment, businesses and the economy after opening

32%

Ability to offer a range of activities/ entertainments in a central location

32%

Will bring leisure standards up to an international level31%

I can enjoy in Japan what until now I had to travel overseas for30%

It will be fun to go the casino to enjoy gambling in moderation

26%

Will renew old, dilapidated areas

25%

Highlight Japan culture and achievement to international audience

18%

Will bring hospitality standards up to an international level

42

Carter Japanese sentiment survey 2019

16%
0%

10%

20%

Base: All respondents enthusiastic about the leisure and economic opportunities of IR, n=244

30%

40%

50%

60%

Transparency in society
Transparency in society (the Government and businesses included) is consistently in strong demand
100%
80%

30%

32%

34%

71%

75%

71%

60%

Somewhat agree

41%

39%

Somewhat disagree
Strongly disagree
25%

25%
3%
2%

0%
2018
43

Neither

41%

40%
20%

Strongly agree

20%
2%
2%

2019

3%
1%

2020

Carter Japanese Sentiment Survey March 2020 – “Q2.4 We need more transparency in our society, including government andbusiness”

Base: Nationwide, all respondents (males/ females 16-69) n=1,000

Focal points of action on climate change solutions
People are starting to focus more on climate change as an issue requiring action. Nobody ‘owns’ theagenda on climate change yet…
100%
80%

GOVERNMENT

BUSINESSES

9%

14%

21%
58%

60%

CONSUMERS

41%

37%

55%

0%

44

41%
Strongly agree
Somewhat agree

40%
20%

34%

42%
35%

32%
7%
3%

7%
2%

I feel that the Japanese
Government's response to
global climate change is notgood enoughI think businesses, both Japaneseand foreign, should be
encouraged by their customers
to stop investing in projects
which could add momentum toglobal climate change

Base: Nationwide, all respondents (males/ females 16-69) n=1,000

Neither can say
Somewhat disagree

11%4%Strongly disagree

I would switch to buying
products/ services provided
by environmental-friendly
companies or brands
Carter Japanese Sentiment Survey March 2020 – “Q2-15 to 17. Please indicate
your level of agreement with the following statements”

Japanese know that there areserious issues with energy security
and environmental impacts.
Pressure is building for action
Nevertheless they still favor
practical approaches that balance
economic well being and theenvironment
Reasonable solutions, guided bythe ‘wise’ men in charge of thegovernment and business are likely
to receive co-operation
45

Big picture opportunities
for US business in the Age of Reiwa
46

Four Key Areas Where Japan’s Megatrends
Synergistically Manifest

CONVENIENCE/ LIFESTYLE

47

EXPERIENCEWELLNESSCULTURE AND
DESIGNCONVENIENCE TURNS INTO LIFESTYLE ENABLEMENT

Convenience is something that has often been
designed around the needs of the salaryman
Now it is growing in its scope to facilitate enhanced
roles for women in their work and career- building services around them- telework creates flexibility
Seniors want bothersome chores taken away fromthem as they pursue a more meaningful life48

EXPERIENCE

Shopping is so much more than buying goods.
The crisis reinforces that this can be largely done
online nowadays
What to do with all the extra time that saves?
Retail concepts that incorporate the opportunity
to spend time in an enjoyable (and safe!) way are
growing – increasing engagement with brands aswell the value of goods soldAnd the needs for experience go well beyond
retail into leisure and entertainment

49

WELLNESS

In the short term, expect massive focus on healthas a direct result of the Covid-19 crisis
Wellness is a nascent trend in Japan prompted byconcerns that arise from a faster paced andsometimes more disconnected life
Japan’s health-obsessed seniors also provide along term boost

50

CULTURE AND DESIGN

In today’s jaded world, Culture and Designintersect to establish interest and status andcreate content for brands that will truly connect
Outdated assumptions about what is going toconnect to ‘typical’ Japanese are being thrown out
the window

51

Socio-demographic change means opportunities for US business
Especially where US businesses represent best practice…

THE FOUR MACRO TRENDS

The World of Work

52

Women PowerInternationalization§

Recruitment tech§Premium categories§

Shared workspaces

§

Food

§

Telework§§

English training§

Management
consulting

Lifestyle enablement§

Experiential§

Financial sector§

Management/HR
consulting (diversity)§

Tourism: inboundand outboundGenerational Dynamics§§§

Premium foods
Enhanced life
‘support’ services
Ageing tech

In Summary§

Short term, consumer confidence is taking a big hit• Digital entertainment is a winner§Medium to long term the outlook is cautious but notoverly pessimistic§

It pays therefore to pay attention to the Reiwa era’slong term trends§

Transparency and genuine engagement will be a must
to maintain trust, moving forward§

US businesses that solve problems will do especially
well

53

Thank you for your time.
We are happy to chatfurther with you.

www.carterjmrn.com+81 3 6434 0520
d.carter@the-carter-group.com

All content throughout this presentationis the property of The Carter Group54

A Snapshot of the Carter Group
Japan expertise, Creative Thinking, Safe Hands

insights-driven

marketing consultancy

Long establishedindependent agency inJapan (since 1989)

Experience covers
Japan & APAC markets

Multicultural team ofanalysts and marketing
consultants

Offices in Tokyo, Osaka& Singapore - core teamof 60 & field force of 80

Offering a unique balanceof thinking & creativity

Full-service consumer

55

How We Can Help
ACTIVATION
Fuel the Future
workshops

Active & passive
tracking

Thinking & Creativity

Quantitative

MEASUREMENT
56

Market mapping &trend watching

Qualitative

Experiential &ethnographic
research

EXPLORATION