10 Oct 2014
Japanese Gift Market Targets Elderly Amid Economic Concerns
The autumn Tokyo Gift Show saw mixed fortunes for exhibitors with concerns remaining about the Japanese economy. Those targetting older consumers, however, seemed to fare far better than those hoping to appeal to the youth market.
As almost anything can be offered as a present, gift shows offer an excellent means of getting an instant wide-angled view of the smaller item retail sector. The Tokyo Gift Show is no exception. With so much diversity on display – it claims to be the largest trade show in Japan – patterns, trends and useful business data, though, are occasionally obscured by the background noise.
This is particularly vexing at a time when such insights are hard to come by. Despite the best efforts of the Japanese government to establish clear growth patterns, prospects for the country's economy seem mixed at best. Regardless of this, a number of trends were apparent at the event – its second 2014 iteration – that were indicative of the wider state of the country's commercial activities.
For one thing, there was evidence of a continuing adjustment to demographic trends, inevitably taking into account the realities of an increasingly aging population. There was also a renewed emphasis on form, functionalism, practicality and "space friendly" items, rather than on those that were merely decorative. This was reflected in a number of the stylistic and aesthetic trends on show.
Turning first to the economic indicators, there were contradictory signs aplenty. Kenichi Iwasaki, Vice-President of WiZ, a Tokyo-based producer and distributor of toys and various novelty goods, seemed in confident mood. His company had enjoyed recent success with an icemaker designed to make the softer, Taiwanese-style shaved ice.
Taking an overview of the economy, he said: "I generally think all industries are on the up. Orders are increasing." Tellingly, though, his company's shaved icemaker owes at least part of its success to its money-saving benefits.
More positively, Yuko Mukai, an Assistant Manager for Nippon Kodo, a Tokyo-based incense maker and distributor of aromatherapy products, said that demand for aromatherapy goods had remained constant, despite April's rise in consumption tax from 5% to 8%.
Less positive indicators also abounded. Ryuji Suzuki, Sports and Leisure Manager for Hanwa, a Tokyo-based distributor of several home and outdoors brands, was showing a new kind of garden hammock, but had not had a good year overall.
He said: "After the tax hike, sales were down. I'm not so sure that the government's economic plan is working. That means we will all have to work harder."
There is always a subjective aspect, of course, as to just how companies perceive economic trends but, significantly, the impact of the aging market was widely apparent. Hanwa, one of the least positive attendees, deals in brands aimed at a younger market. By contrast, WiZ, as well as seeing significant demand for its shaved icemaker, also enjoyed another success. Tellingly, this came with the US$250 Smile Supplement Robot KABO-chan – essentially a doll that can interact with lonely old people.
Explaining the thinking behind this senior-friendly mannequin, Iwaski said: "We are essentially a toy company, but that sector is going down because of the comparative rarity of children. In light of this, we have had to change our strategy and start selling toys aimed at an older demographic. Our main items now are for more mature consumers. KABO-chan is for elderly people who are away from their grandchildren or don't have any. They buy a doll and talk to it."
Nippon Kodo's market is also more targetted at the older demographic, with Mukai saying: "Our main business is incense sticks for funerary and commemorative purposes. Naturally, this is related to the older market. We are also promoting a number of aromatherapy brands. There is a growing tendency, especially among older people, towards self-care. We are launching many such items, especially essential oils. These are very good for mood and health. There is strong demand from businesses such as massage and aesthetic salons."
The range of health-related goods was, as usual, very wide, with this section of the trade show particularly well-attended. One product that attracted significant attention was the Doctor Air massage seat, which sells for around US$250. In addition to providing a fairly rigorous massage, this product's main selling point is its space-saving benefits. Rather than being a bulky massage chair, it is essentially a mat that can be attached to – or even propped up on – an existing chair. There was also a massage pillow, selling for around US$80.
These products were prime examples of the functionality and practicality that many exhibitors acknowledged as important trends for the gift sector. This has seen an emerging emphasis on items that could be either useful to or enhance daily life, without taking up too much space or time. Yuko Mukai of Nippon Kodo identified similar concerns with regard to aromatherapy goods.
These concerns, along with an interest in gadgetry evident elsewhere in the show, also seemed to be reflected in the dominant aesthetic. A show this big and diverse inevitably includes many styles, but many of the goods on offer were characterised by sleek, minimalist lines, all matched with a pop art vibe or neat areas of bright colours surrounded by whites. This was a style note reminiscent of the items you might find in an Apple store. In addition to electrical items, this aesthetic could also be seen in a variety of clothing, pottery and even wooden items.
Even though the market is clearly aging, this doesn't mean old-fashioned styles and tastes predominate. In fact, far from it. In Japan, older people often wish to be seen to be just as "cool" as the younger generation.
With the general market still mixed, many companies seemed to be adopting a diverse strategy, with many relying on a broad base of traditional and dependable products, while also developing a narrow range of new and innovative products.
A prime example of this is Nippon Kodo. Even with its solid product base of incense sticks (90% of its business according to Mukai), the firm now also promotes French and Californian aromatherapy. Hanwa, too, has adopted this strategy. Traditionally offering a wide, established range of products, including bicycles, fans and humidifiers, this year its stand was mainly dedicated to promoting its new line of hammocks. According to Suzuki, it was important for the company to identify new gaps in the market, no matter how small, in order to maintain growth.
A more daring approach was evident from Daka, a Hong Kong company with a 20-year-plus history of product development, manufacturing and marketing. Business Development Director Jesse Emory Chow said the firm had made a decision not to worry too much about the general economic picture. Instead, its focus was on conveying the uniqueness and quality of its designs.
Chow said: "I think our products should do well in Japan. The market here is quite innovation-oriented."
Accordingly, Daka was maximising its presentation of unique and innovative items, most of which seemed to fit well with the overall aesthetic trends. A number of its products – notably Flexypan (US$15), an adjustable baking pan, and Mix 'n Bake (US$15), a bowl with two functions – also matched the trend for practicality and space economy.
Chow said: "Functionality and aesthetics are very important. We always design products that work first, and then we work on the aesthetics."
This was Daka's debut at the Tokyo show. The company has been selling items in Japan through distributors but, given its ever-widening array of products, it felt a need to directly target more importers and distributors. According to Chow, it was especially interested in those with access to multiple retail channels, such as catalogues, the internet and shops.
The Tokyo Gift Show was held from 3-5 September at Tokyo Big Sight. According to the organisers, some 190,269 people visited the event, a marginal increase on last autumn.
Marius Gombrich, Special Correspondent, Tokyo