Japanese brands pressed to play up ‘cool’ side
WHILE Japanese products are perceived to be reliable and of top quality, consumers in Asia’s emerging markets do not necessarily see them as cool or chic, thus hurting potential sales of brands headquartered in the Land of the Rising Sun.
This is according to a recent study by J. Walter Thompson (JWT) Asia Pacific, which also said that Japanese companies need to amp up the cool factor if they want to penetrate markets in the region, which are home to young and growing populations that are among the world’s upbeat and confident.
In a 2014 survey, JWT asked 3,200 consumers aged 20 to 49 from Indonesia, Malaysia, Philippines, Vietnam, Thailand, China, India and Japan a range of questions such as factors that influence their purchase decisions and how they perceive a range of countries and the products they make.
The survey showed that Japan was seen as a “mentor,” a “best friend,” or a “loved one,” but the Asian powerhouse was not seen as “cool,” “chic,” “trendy” or “fun.”
“There is plenty that’s cool about Japan. Japan’s counter culture has a huge influence worldwide, from manga and anime to street fashion. There’s also plenty of innovation coming from nimble startups, founded by a new breed of young entrepreneurs from the post-Economic Miracle generation,” the report noted.
“Big Japanese brands, however, have not yet tapped the rich vein of cool. To amp up the X-factor, companies could partner or acquire startups to inject fresh talent, new approaches and out-of-the-box ideas; they could hire and empower a new breed of designers and bring them in on product decisions,” it added.
A brand idea that incorporates functionality and reliability with emotional appeal is key, given the affinity of consumers in the region to Japan, the survey said.
When asked to describe certain countries as a person, respondents who referred to Japan either as a “loved one,” a “mentor” or a “best friend” accounted for half of the respondents.
“Consumers in much of emerging Asia already love Japan. Brands just need to tap into that ready, deep pool of af- fection, trust, admiration and respect,” Ratan Malli, JWT Asia Pacific Director of Strategic Planning said in a statement.
Another indication of the emotional bond that consumers in the region already feel with Japan: Japan, together with France, emerged as the top travel destination among emerging markets included in the survey, except China.
In particular, consumers in Association of Southeast Asian Nation (Asean) bloc are most interested in visiting Japan, with 59 percent of the respondents in the Philippines saying they would like to visit Japan in the future, while Chinese consumers are the least keen with only about a fifth saying they wanted to visit Japan.
In Vietnam, the percentage of respondents who cited Japan as a future travel destination was 60 percent while it was 52 percent in Indonesia, 47 percent in Malaysia and 42 percent in Thailand and 33 percent in India.
The survey also found that consumers try to buy products from their country as much as possible. But despite this, seven in 10 respondents said that they like buying brands from countries they admire and Japan tops the list with 64 percent saying they are very likely to purchase products made in Japan, followed by those made in the United States (52 percent) and made in Germany (47 percent).
Further, aspiring Japanese multinational brands have an advantage in the Asean region as less than half of the respondents in Southeast Asia think Western brands are more stylish than Asian brands.
“The fact that respondents in Asean don’t necessarily rate Western brands as better than Asian competitors goes back to the profile of this cohort of consumers: this is a young, increas- ingly educated, optimistic group that’s entered adulthood in a time where Asia has been a driver of the global economy,” the JWT report said.
According to the survey, consumers in emerging Asian markets want brands that are functional and cool or products that satisfy their needs as well as project their personality. They are also conscious about cost but are willing to pay extra for a product that has better quality.
Online engagement is higher in emerging Asia than in Japan, the survey also found, noting that consumers in the region are “very willing to engage and participate online with brands that help them both stand out and fit in or offer information that they can’t get elsewhere.”
“There is no greater brand building potential than harnessing the power of Japanese brands as they expand abroad. In Asia and beyond, Japanese products and services boast assets that can be skillfully leveraged to create enduring loyalty,” Tom Doctoroff, CEO of JWT, said in the same statement.
In 2013, outbound foreign direct investment by Japanese companies hit a five-year high of $135 billion, according to a report by the Japan External Trade Organization.