▶️ Understanding the background
Since the beginning of the novel coronavirus outbreak early this year, the way people across the planet are doing ordinary things has seen a drastic change, including how shopping is done. Japan, without being an exception, is equally experiencing an ongoing transformation in different key economic sectors, especially in retail business. The trend is becoming the new normal for Japanese consumers.
▶️ The purchasing attitude of Japanese consumers has changed
“Consumer behavior” is determined by “consumer sentiment” which plays an important role in a nation’s economy. According to Investopedia, “consumer sentiment is an economic indicator that measures how optimistic consumers feel about their finances and the state of the economy”. In the times of financial crisis, consumer behavior usually changes in a significant way depending on the extent of the crisis.
In Japan, consumers are still being pessimistic or unsure about a prompt economic recovery, and most people are remaining very cautious when it comes to their spending, according to a survey conducted by McKinsey & Company in June 2020: “Consumers are becoming more mindful of how they spend their money and adopting habits like making plans and trading down. Up to 1 in 5 have taken on new shopping behaviors, including trying new stores and brands”.
On the other hand, even though it might take another half a year to see things go back to normal, some consumers are proactively intending to get back to their activities hopefully soon and normal shopping habits as usual, after the crisis. This attitude might be explained by the fact that, as the aforementioned survey suggests, 40% among these consumers are waiting for vaccines and treatments before resuming fully.
This evidence is actually supported by the results of another study pertaining to global consumption trends by Ernst & Young (see interactive survey results):
(Reference: https://www.ey.com/en_gl/consumer-products-retail/how-covid-19-could-change-consumer-behavior)
▶️ How spending habits of Japanese consumers have changed:
In the same survey by McKinsey, data shows that consumers are trapped between the need of keeping their usual habits and the necessity of living with as less money as possible, because no one can actually tell when this crisis will be over.
Moreover, experts (see survey by McKinsey & Company) are suggesting that, while some Japanese consumers for example have started to pick up new digital activities such as video conferencing, webinars and fitness lessons online, the majority of consumers have not completely moved to purchasing online yet. However, most consumers are making drastic changes in the way they manage their money, especially with regard to making purchases of goods and services.
▶️Most business are moving online, a golden opportunity to start an online business in Japan
Economic recovery will surely take some time as the virus is still around. This situation is giving consumers a chance to change their shopping habits, as shown in above figures, that may impact businesses negatively. However, in Japan now, there is a high possibility to start an online business and become successful simply because most people started using web related services or buying online. The online businesses in Japan have been registering a significant growth in recent years, as user penetration in the Japanese e-Commerce market reached 76.7% in 2020, according to Statista (a trusted in-depth data analysis platform).
The Ministry of Economy, Trade and Industry (METI) carried out a survey on “internet buying boom” as well that shows a steady growth in eCommerce.
(Source: https://www.meti.go.jp/english/press/2018/0425_002.html )
* Scale of the domestic EC market: business-to-consumer (B-to-C) and business-to-business (B-to-B)
Concretely, The Japan Times reported that web-conferencing or teleconferencing businesses such as online press conferences and webinars are booming now as the coronavirus pandemic is almost forcing workers to do everything online.
Another good example are online salons that offer customized digital contents for people interested. Since many companies have been encouraging their employees to work from home to limit the risk of contamination with COVID-19, some of them are seeking opportunities to learn new things and better their lives by improving their skills. Therefore, this could be seen as a golden opportunity that came to fuel an unprecedented boom in web tele-conferencing business. In Tokyo for instance, a barber launched a new “telecut” service as the virus outbreak impacted their business negatively, according to Japan Times april issue. The shop decided to provide that service to help their customers learn how to cut their hair by themselves, as a temporary solution to the problem.
Companies are contributing to the governmental promotion of the 3C’s to avoid outbreaks, namely:Closed spaces (with poor ventilation), Crowded places (with many people nearby), and Close-contact settings (close-range conversations).
▶️ Looking to the future
There is no need to highlight that the current crisis the world is going through has not shown any sign to end yet. This situation does not leave many options to companies, but adapting to new ways of doing business imposed by a case of force majeure. At the same time, consumers will keep on adjusting their way of spending to be able to enjoy life until the current crisis comes to an end.
“Life and business are like the changing seasons, meaning opportunity is always mixed with difficulty”. This quote by Jim Rohn (an American businessman, philosopher and author) best summarizes what is happening in the world right now. After difficulties brought about by the current coronavirus crisis, the world can already see different opportunities flourishing as businesses are mainly moving online.