I have been a rather passionate patron of Swarovski jewelry to date.
And I was blissfully browsing in a Swarovski boutique recently, admiring their 2011 A/W collection, when this very chic ring caught my eye.
It is everything I love in colour - deep purple and kingfisher!
And I have its cousins in red and black (featuring star shaped crystals).
But what made my blood freeze is the price.
The US price is $270.
The Japanese price is 36,700yen, or US$470.
Just how does Swarovski plan to justify that price difference???
OK, we are used to brands charging a 30% premium, or maybe even 50%.
What do they take us Japanese girls for???
And they wonder why consumption in Japan is going down. ARGH!
I am totally ticked off by this and feel absolutely offended!!!
What makes the Japanese e-commerce market stand out from the other markets?
I think it is still mobile commerce.
According to a survey by Japan's Ministry of Internal Affairs and Communications, 36.9 million E-Commerce users buy on PCs + 10.3 million buy on mobile.
And Japan's B2C e-commerce market is back on track after the slowdown thanks to the Lehman Shock.
Yes, the 3.11 Great East Japan Earthquake had a significant impact on consumer confidence and consumption, but industry insiders say there was a fundamental shift in consumer mindset on HOW they want to consume as well as the WHAT.
The HOW is that the "cheaper is better" craze is passing.
Perhaps the fact that Groupon Japan sales have begun to shrink on a month on month basis since January 2011 is one indication.
I managed a flash sales site myself (sold now and rebranded), but it is evident that the people I used to compete with, like Gilt Japan, as well as sites that push heavily discounted branded goods like Javari, are struggling to grow their membership base and increase their sales.
In a mature market like Japan, there are no "needs" to be met in anything that is consumed as a "fashion purchase."
No Japanese woman NEEDS another bag, pair of shoes, dress, set of lingerie, fragrance, or piece of jewelry.
All these items are consumed driven by WANTS.
And if a consumer does not WANT your product, you won't be able to give it away. So what makes brands think that they can recover their procurement costs by selling them off at 70% off full retail?
Keep on dreaming.
And since 22% (10.3 million consumers out of a total of 47.2 million who shop online) of e-commerce purchases are made on the mobile phone, if you cannot appeal to consumers on their mobile screens, or if your product is not searchable on mobile, you are pretty much dead in the water.
A survey by the Ministry of Economy, Trade, and Industry comparing Chinese, Japanese, and American e-commerce buyers indicated clearly that Japanese consumers still rely heavily on search results when looking for things to buy online, as well as review sites. (blue is Chinese, red is Japanese, and white is American in the graph below)
And another interesting thing for marketing professionals to note is how low TV ads rate for the Japanese consumers compared to both the US and China.
Bill boards for the Japanese are dead.
According to this survey, ezines rate much lower in Japan and the US compared to China, but one should note that in Japan, if 7% of your emails are actually read by the people who sign up for your e-newsletters, we see double that number for mobile email newsletters.
In Japan, we are on CDMA and not on GSM, so SMS is not at all common. Everyone has a mobile email address provided by their mobile phone service providers. These email addresses are capable of receiving emails as long as those received on PCs. And they are a primary personal email address for many consumers. On top of that, many phones do not let the user delete messages unless they open them first. So if you are not blocked as a sender, you have a higher chance of having your emails read on the mobile vs. the PC.
If you are serious about enhancing brand and product awareness in this market, please remember:
if the consumer cannot find you on her mobile phone search, you don't exist for her.