A closer look at why consumers in Japan prefer functionality

Friday Podcast - This month’s Fashion Friday podcast series by Euromonitor International explores the underdevelopment of Japan’s natural and organic trends. Japan is a unique market where efficacy and functionality are strong selling points, especially in the beauty and food industries. In order to achieve this, manufacturers are putting effort into achieving high efficacy by adding unnatural or processed ingredients.

In the beauty industry, this trend has accelerated within the past few years especially after the local beauty player, Pola introduced a product called Wrinkle Shot in 2017. It was the first approved quasi- drug in Japan, which claimed to have the efficacy of wrinkle reduction. This claim was promoted heavily triggering consumers’ interest in proven claims and efficacy, and since then, functional claims became a key component for manufacturers to promote added value to beauty products.

Likewise, in the food industry, there is an increasing demand for Food with Functional Claims (FFC), which allows manufacturers to label a product’s specific health benefit and functionality on food packaging. One of the successful cases is Megmilk. They had a series of yogurt products called Megumi, containing Lactobacillus, which said to reduce body fat, but the sales of the product dramatically increased after they switched the product to the FFC labeling even though the product itself is unchanged.

Why do Japanese consumers prefer functionality? One of the big reasons is that they seek “value for money” due to their frugal cultural background and people experiencing the decades of deflation. According to Euromonitor’s Consumer Type Survey, the top two consumer types in Japan are Conservative Homebodies and Inspired Adventurers, and these consumer types actively seek “value for money”. It could be said that Japanese consumers seek proof and evidence on what they buy. On the other hand, globally there is a strong wave of the natural, organic and ethical trend and many consumers are seeking simplicity such as fewer ingredients or non-chemical products. It looks like Japanese consumers are going against this trend – will the concept of natural, organic or ethical not be established in Japan?

It’s true that the concept of organic and ethical has been struggling to take root in the beauty and food industries in Japan. According to surveys conducted by Euromonitor, less than 10 percent of respondents said they prefer “all-natural” ingredients for food products and “natural/organic” and “environmentally friendly/ ethical” features for skincare products. Although Japanese consumers are quickly learning with the strong push from the global trend, it’s expected to take some time for these trends to establish in Japan.

Written and created for FashionUnited by Euromonitor. Euromonitor International is the world's leading independent provider of strategic market research.