FEATURE: The Renewal and Effects of Frugality in Japanese Society [Updated]

After the burst of the asset price bubble in the early 1990s and the prolonged recession that followed, Japan has evolved into a post-consumerist country disinterested in luxury goods.

One doesn’t have to look far to find evidence of this renewed sense of frugality. Recent polls indicate that members of the Heisei generation (post-1989) oppose the consumerist attitude of continuous acquisition. Others no longer express an interest in owning a car, buying alcohol or pursuing luxury. Families have cut down on groceries and utilities, and the number of Japanese venturing abroad for work or play has reached record lows. A stark contrast to its spendthrift days in the 1980s, consumer attitudes in Japan have taken the definition of “economical” to a whole new level.

We all know about the devastating cycle of deflation Japan currently finds itself in. Consumer demand in Japan is seemingly dependent on life support from the government: fresh infusions of incentives and tax breaks to keep people buying stuff. When the cash flow runs dry, consumer demand plummets and deflation returns, and the government digs itself deeper and deeper into debt as it comes up with (surprise!) yet another stimulus package to get people to buy again. And the cycle repeats over and over with no end in sight.

You have to understand, though, that the purpose of this article is not to suggest solutions to the problem. That’s what we have economists, market analysts and Finance Minister Noda for. Rather, the purpose of this article is to suggest the existence of a silver lining in Japan’s economic malaise: the development of unique and innovative products in post-bubble Japan; where the latest, greatest and tastiest doesn’t necessarily have to cost the most Benjamins (or Fukuzawas, whatever you prefer).

The best example of this comes in the form of a clothing retailer: Uniqlo. The GAP of Japan, Uniqlo has become iconic of the Japanese recession and the consequential thriftiness of those who have struggled through it. It shows. Uniqlo, a subsidiary of parent company Fast Retailing, has risen to become Japan’s biggest clothing retailer on lines of casual, affordable clothes that go for as little as 500 yen. Most importantly, however, Uniqlo has done so while preserving characteristically unique Japanese fashion; making it possible for ordinary people to look good on a budget.

In the automotive world, the Japanese have reflected a similar principle. Though one may argue on the basis of the efficiency of Japanese public transit (and are probably correct in doing so), cars remain an integral part of life in Japan. Ergo, the Honda Fit Hybrid: at 1.59 million yen, the cheapest and most efficient hybrid car in the world. The Fit Hybrid returns an astonishing 54 miles per gallon, a figure that beats every car on the market today save those of electric cars. Such will set the precedent for affordable environmental sustainability and perhaps stimulate car ownership in Japan, given its low cost of purchase and operation.

The essentials aren’t left out of the mix either. Full meals, like Yoshinoya’s oh-so-famous gyudon, can be purchased with less than 400 yen. 50 yen beers can be found in restaurants and vending machines dispensing 10 yen drinks aren’t all that uncommon. 100-yen shops supply the population with basic necessities and beyond. The best part about all this is that quality isn’t sacrificed in the name of price, which has helped the Japanese get by in these tough economic times whilst maintaining a relatively decent quality of life.

In these subtle ways, Japan’s innovative forces soldier on in the midst of its economic plight. The permanence of the cheap but chic business model in Japan remains to be seen, but until economic conditions improve, the possibility of such is by no means a detriment in any respect.

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About Peter Dyloco
Sophomore at the Queen's School of Business actively completing a Bachelor of Commerce (Honours) degree with a specialisation in finance. Background in corporate finance, product portfolio planning and marketing. Strong interest in pursuing a career within investment banking or the commercial side of the automotive industry, with long term aspirations in Japanese public policy and contributing to the economic revitalisation of Japan. I remain open to new opportunities and to hearing insight from similarly passionate people. Peter Dyloco

One Response to FEATURE: The Renewal and Effects of Frugality in Japanese Society [Updated]

  1. J says:

    I actually don’t think most prices have caught up with the wealth of the average Japanese. Uniqlo is one stand out, but go to many other stores, Japanese and especially foreign, and their prices are still eye shocking. So long as there are enough well off people in/around Tokyo to keep business going at these overpriced stores, which isn’t too hard with 40 million people in the metropolitan area, I don’t know if we’ll see lower prices. Compare prices at American Apparel, Polo, etc. with the costs in the US and factor in the exchange rate and Japanese are still being charged much more for the same products, to the point it may be cheaper to order online from overseas and have them shipped together. Even used clothing shops are still far more expensive here.

    Similarly, CD’s cost less than 1000 yen in the US and still costs 3000 yen here. Music concerts for non-pop artists range from $10 to $50 in the US, yet usually start around 5000 yen in Tokyo. Clubs can be free or $5 in the US, but usually start around 2500 yen in Tokyo, similar prices for local Japanese music artists. I am doubtful these prices fell from a much higher price 10-20 years ago. I think companies, club owners are trying to continue ripping off customers until they really start losing business. If the wealth gap produces enough of a wealthy class to sustain business, these things will be increasingly for the rich (or the sons and daughters of the wealthy), with much of the population priced out of the fun. It may also be that the youth are sacrificing the expensive car, staying at home longer, to maintain this lifestyle since the prices won’t fall.

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