Demographic shifts in Japan

Although Japan has a population of 120 million people, most market research takes place in Tokyo only. The reason for this? Simple. As Japan is probably the most homogenic society in the world, samples really only need to be recruited in Tokyo, and occasionally in Osaka, in order to capture an accurate representation of the entire country.

However while this aspect of Japan’s make-up has traditionally helped market researchers, it is best to be aware that Japan is also a country where huge shifts are occurring in the demographics of the population. This is something that should be borne in mind when considering target segments and sample quotas.

	aging Japan

One of the most alarming demographic trends is Japan’s steadily declining birth rate and the rapidly aging population. In fact the birth rate has reached such astronomic lows that these days couples are often toasted at their weddings for helping to alleviate the population situation. The total population is expected to begin declining from the year 2006 and by year 2015 it is estimated that citizens aged 65 and above will account for 26% of all Japanese.

The rapidly aging population also poses an alarming economic challenge. The national pension program was originally designed for a larger number of workers supporting a relatively smaller number of senior citizens. Now the tables have been reversed and an ever dwindling number of workers must continue to support the ever growing burden represented by the population of senior citizens.

Japan’s aging society is also linked to another demographic shift: the marriage problem. Increasingly, the Japanese are choosing to marry later on in life or simply to skip marriage altogether. The average age of marriage for a Japanese woman has risen from 23 to 28 years over the past two decades, while the average age of marriage for Japanese males has risen from 26 to almost 30 years over the same period. In addition, not only are more Japanese choosing to stay single, in order to focus on their careers or to preserve the freedoms of single life, even those relationships which do end in wedlock do not necessarily bear fruit. The societal backlash to this phenomenon is seen in the common use of the term “make-inu” which literally means “losing dog” - a reference to single women who have chosen their career over starting a family.

Another manifestation of the desire to maintain personal freedom is seen in the growing number of Japanese who choose to forgo permanent, fulltime employment and who instead decide to become “freeters.”

freeter spirit!

The term freeter refers to someone who has chosen to become a temporary or part-time employee on a long-term basis. While part-time jobs do offer far less financial compensation and lack insurance benefits as compared with traditional employment, for freeters the greater flexibility with their time and the freedom to pursue their interests more than compensates.

The freeter trend has been on the rise for the past couple of decades. But it is only now, as the freeter generation approaches their 40’s and 50’s that the Japanese are being forced to sit up and take note of the gravity of the situation posed by the lack of social welfare coverage among this demographic group.

With a shrinking, ageing population and one less inclined towards permanent fulltime employment you may well wonder about the value of continuing to conduct market research in Japan? Well its important not to forget the strategic importance that the Japan market retains - the country is still the world’s second largest global economy and the level of disposable income per resident is still far higher than most other developed countries. Even for freeters, who often live at home with families, disposal income can be high as the result of low living expenses!

So it’s still very much worthwhile tapping into the lucrative segments that exist in Japan and conducting effective market research to understand their needs and behaviors. But it’s also a good idea to bear in mind how quickly the demographics of Japanese society are changing and be sure to structure your samples accordingly.