With the expansion of the low-income class (with annual income of less than 2 million yen, or about RMB 160, 000), the number of people who are showing restraints on spending is on the rise. Unwillingness to spend refers to the discrepancy between income and spending. Traditional consumers would spend more as the economy recovers and the income increases. But consumers who are unwilling to spend wouldn’t spend more even when the economy recovers. To some extent, for businessmen in the manufacturing, distribution, service and other industries, the number of picky consumers is on the rise.
In recent years, spending on life necessities has been increasing. Food cost accounts for 30% of the total expenditure. Expenditures on other life necessities take up another 50%. Excluding spending on durable goods and services, the growth in remaining income has become a symbol of wealth. However, with the phenomenon of unwillingness to spend, the destinations of the remaining income are not predictable.
Where does the phenomenon of unwillingness to spend originate? Which classes of people tend to be unwilling to spend? Why would they be like this? Is this phenomenon commonplace? How should we see this group of people? What effects does this phenomenon have on the economy? This book will give clear answers to these questions. The generation theory is used in the analysis of these questions.
The emergence of a generation unwilling to spend poses a great challenge to enterprises and the industrial and production sectors.
First, it is necessary for enterprises to conduct in-depth research on consumers and the domestic market. In the 18 years since the economic crash, many companies have been relying on the manufacturing industry for overseas expansion and escape out of the “lost decade”. In the decade, Japan’s economy has become highly export-dependent. During the world economic crisis originated in the United States, Japanese companies lost a large number of orders due to neglect of the domestic market, leading to greater negative growth of the nation’s economy.
During the global economic crisis, Japanese companies, manufacturing and sales industries haven’t lost domestic consumers. From the perspective of the economic cycle, recession is a harbinger of recovery. However, for consumers who are unwilling to spend more even when the income increases, the traditional economic model does not work. The emergence of a generation of people unwilling to spend has promoted Japanese enterprises to reinvest in the domestic market and re-build markets.
Second, opposite to the last generation which tend to over-spend, this generation is slightly frugal in the sense of not being wasteful. If this consumption model appeals to the new and the old generations, the Japanese economy will have to face an economic backslide. Meanwhile, Japan’s industrial structure will have an opportunity to transition to the more efficient industrial merge.
The phenomenon of unwillingness to spend shrinks the market of enterprises and industries, but brings opportunity for change at the same time. It is possible to shift the consumption from too little to moderate through innovations in products, marketing, sales and industrial structure.
Third, enterprises and economic policy makers are faced with the challenge of drawing up policies for the coming 5 years. Making policies is like driving past a corner. You don’t steer the wheel toward the right direction if you only see a short distance ahead. It is important to see farther till the end of the corner.
In this book, the author uses the generation theory, a theory derived from what he observed, heard and thought, to predict the future and proposes viewpoints different than statistical and sampling methods.
Just like the defeat of World War II bred the “Generation of Ruins”, the burst of the economic bubble produced the “Bubble Economy Generation”, who is unwilling to spend. These two generations are both affected by shorted-sighted economic policies. The “Generation of Ruins” took on the responsibility for the post-war economic recovery and the creation of new economic order after the collapse of the pre-war economic system. The “Bubble Economy Generation” now bears the responsibility for deconstructing and reconstructing the modern economic system. Their unwillingness to spend can be seen as an objection to short-sighted policies.
This book analyzes and deconstructs an abnormal consumerism phenomenon: unwillingness to spend. After the burst of the Japanese economic bubble, the main consumer group of the country (people born in the 1980s) has been unwilling to spend. Consumption hasn’t increased along with the increase in income, thrusting the Japanese economy into long-term downturn and reliance on exports.
After a decade of observation and investigation, the author finished the most detailed and comprehensive research on consumers in the history of commerce. Using knowledge in sociology, psychology, consumer behavior, statistics and many other disciplines, the book conducted deep research and analysis on this abnormal phenomenon, and convincingly displayed the effects of the economic crash on the consumption pattern of a generation. The book was listed as a must-read in many business schools in the United States the year it was published, and one of the books having the greatest influence on Japanese people in recent years.
China today is under an enormous pressure of high inflation and economic bubble expansion. Part of the major consuming group has started to be pessimistic about consumption and show restraint. If this trend continues, it will resemble the weak consumption in Japan. Since the consumption habits and patterns in China and Japan are similar, we hope this book could shed some light on how to mitigate the negative effects of the bubble economy on China in the coming decade. (Edited by Guo Yan)