Growth Market of Japan
Direct marketing is popular with consumers
February 2007By Klaus M. Knappik and Dr. Diane Rinas (published in the trade journal DIREKT MARKETING, February 2007 issue)
Japan is the world's second largest economy. The Japanese economy has been growing steadily for four years. Japan is the most important market for German products in the Asia-Pacific region. Bilateral trade between the two countries grew by a total of more than EUR 34 billion in 2005 with German exports to Japan increasing by five percent.
The OECD expects the Japanese economy to grow by 2.7 percent in 2006. The main driving force behind the growth of gross domestic product will be investment and private consumption. Boosted by rising incomes, higher market valuations and falling unemployment, Japan's consumers are displaying optimism.
That is also having a positive impact on the success rate of direct marketing campaigns. The surveys conducted by Direct Marketing Monitor International 2006, published by Deutsche Post Global Mail, show that Japan has a disproportionately large older population compared with other Asian countries. 31 percent of this age group are in the so-called "best ager" category of people who are older than 50. On average, consumers have a relatively high level of education.
94 percent have completed more than 10 years of schooling before graduating and only six percent have a lower level of qualification. Direct marketing is very popular in Japan. In terms of mailing distribution strength and the high level of response rates, the country is on a par with the frontrunners in Europe. The mailing density in Japan is far higher than in neighboring Asian countries such as China and India. 45 percent of Japanese consumers receive a mailing at least once a week (as compared with 20 percent in Asia generally) and 37 percent at least once a month. Only 18 percent of Japanese state that they receive advertising mailings less often than once a month or that they do not receive any. Receiving mailings is one thing, actually reading them quite another. Almost all of the respondents (97 percent) who receive mailings belong to the category of people who have an affinity to mailings, in other words, to the consumer group that reads its mailings at least occasionally. 35 percent of the Japanese surveyed read their advertising mailings regularly and 63 percent even respond to them. Those who are willing to respond include a higher than average number of 30 to 50-year-olds (68 percent) and three-person households (71 percent). 42 percent of them prefer to respond by e-mail, 37 percent respond by telephone and 35 percent by reply card. A mere eight percent use faxes.
That is also having a positive impact on the success rate of direct marketing campaigns. The surveys conducted by Direct Marketing Monitor International 2006, published by Deutsche Post Global Mail, show that Japan has a disproportionately large older population compared with other Asian countries. 31 percent of this age group are in the so-called "best ager" category of people who are older than 50. On average, consumers have a relatively high level of education.
94 percent have completed more than 10 years of schooling before graduating and only six percent have a lower level of qualification. Direct marketing is very popular in Japan. In terms of mailing distribution strength and the high level of response rates, the country is on a par with the frontrunners in Europe. The mailing density in Japan is far higher than in neighboring Asian countries such as China and India. 45 percent of Japanese consumers receive a mailing at least once a week (as compared with 20 percent in Asia generally) and 37 percent at least once a month. Only 18 percent of Japanese state that they receive advertising mailings less often than once a month or that they do not receive any. Receiving mailings is one thing, actually reading them quite another. Almost all of the respondents (97 percent) who receive mailings belong to the category of people who have an affinity to mailings, in other words, to the consumer group that reads its mailings at least occasionally. 35 percent of the Japanese surveyed read their advertising mailings regularly and 63 percent even respond to them. Those who are willing to respond include a higher than average number of 30 to 50-year-olds (68 percent) and three-person households (71 percent). 42 percent of them prefer to respond by e-mail, 37 percent respond by telephone and 35 percent by reply card. A mere eight percent use faxes.
A creative design for the mailing, a high-quality layout and an attractive postage stamp always go down well in the Asian region. And in Japan, if you also enclose samples or vouchers, you have the best chance of achieving a positive response rate. The reason is that samples and vouchers are important to 39 percent of consumers. On both scores, the Japanese are far above the average for neighboring Asian countries. The content of a mailing is of great relevance to consumers who have an affinity to mailings, in particular. That is what 83 percent of young consumers (under the age of 30) and 49 percent of "best agers" say. Enclosed samples particularly appeal to female consumers.
However, although people do like sweepstakes, only 12 percent of Japanese rate them as important.
Consumers' preferences
The travel industry in Japan has been able to post steady growth over the past few years. It therefore comes as no surprise that 45 percent of all respondents and 51 percent of people who are willing to respond are interested in the area of travel. However, a surprising result of the survey is the fact that, although almost everyone in Japan owns a mobile phone, interest in the latter, at 19 percent, is relatively low. In other parts of Asia, it is a different story. The Asian average is 35 percent. If you want to attract the attention of Japanese consumers, meaning 49 percent of all respondents and 52 percent of people who are willing to respond, you can also achieve that using entertainment media. The gender ratio is relatively even in this area: 53 percent of men and 47 percent of women have an interest in DVD players and the like. For 38 percent of respondents, culture and entertainment also feature among the most popular areas. What factors are crucial for the purchase of a product? While on average in Asia, price plays a major role for 58 percent of consumers, it is the case for only 30 percent of consumers in Japan. The situation is exactly the same as regards quality orientation. 55 percent of Asians overall are prepared to spend more money on high quality - but only 37 percent of Japanese. 61 percent of Asians are loyal to brands but only 32 percent of Japanese are. Japanese consumers are also remarkably receptive to new products.What factors are crucial for the purchase of a product?
The aim of Deutsche Post's joint venture with the Japanese logistics company Yamato (Yamato Dialog & Media) is to combine international direct marketing know-how with regional expertise. Thus, the aim is for customers to utilize thebenefits of a real one-stop-shop solution - from market analysis right through to after-sales management - in their direct marketing campaigns in Japan.
While on average in Asia, price plays a major role for 58 percent of consumers, it is the case for only 30 percent of consumers in Japan. The situation is exactly the same as regards quality orientation. 55 percent of Asians overall are prepared to spend more money on high quality - but only 37 percent of Japanese. 61 percent of Asians are loyal to brands but only 32 percent of Japanese are. Japanese consumers are also remarkably receptive to new products.
Whether it be new or well-known products - Japanese consumers also like to order their goods conveniently from home. The reason is that the mail-order industry is remarkably well-developed in Japan. 61 percent of respondents frequently use it to place orders. The Asian average is just 24 percent. 30 to 50-year-old consumers and people with above-average salaries, in particular, have an affinity to mail-order companies. Western providers can use direct marketing in a more targeted and successful way in Japan than in almost any other Asian country because the Japanese are very receptive to mailings. However, at the same time, there are more special, country typical characteristics to be considered in Japan than in almost any other country. Besides content, a high-quality layout is just one of many factors that definitely need to be taken into consideration. Local know-how is essential for reaching specific customer target groups and for designing a mailing. The key to success lies in combining international and regional know-how.
Klaus Knappik, Chairman of the MAIL International Divisional Board, Deutsche Post World Net
Dr. Diane Rinas, Senior Marketing Manager, Deutsche Post World Net
Whether it be new or well-known products - Japanese consumers also like to order their goods conveniently from home. The reason is that the mail-order industry is remarkably well-developed in Japan. 61 percent of respondents frequently use it to place orders. The Asian average is just 24 percent. 30 to 50-year-old consumers and people with above-average salaries, in particular, have an affinity to mail-order companies. Western providers can use direct marketing in a more targeted and successful way in Japan than in almost any other Asian country because the Japanese are very receptive to mailings. However, at the same time, there are more special, country typical characteristics to be considered in Japan than in almost any other country. Besides content, a high-quality layout is just one of many factors that definitely need to be taken into consideration. Local know-how is essential for reaching specific customer target groups and for designing a mailing. The key to success lies in combining international and regional know-how.
Klaus Knappik, Chairman of the MAIL International Divisional Board, Deutsche Post World Net
Dr. Diane Rinas, Senior Marketing Manager, Deutsche Post World Net
