By Melissa Francis
Subscription-based offerings are everywhere these days. From shaving kits to medical testing and underwear to meal boxes, brands are realising how important it is to offer something regular and personalised for their customers.
Subscription services in Japan are equally growing in popularity, but not necessarily in the same way as in places like the UK where more than 58 million consumers spend around £2 billion on them. Yes, Netflix, Amazon Prime and other strong contenders are also performing well in the market, but there are many Japan-only offerings catching the eyes of consumers. As a result, subscription services in Japan rank second behind the US in terms of most prominent market, with a forecast to reach a value of $7 billion USD by 2021.
What types of subscriptions are Japanese brands offering?
1. Shiseido Optune
Leading cosmetics giant Shiseido has developed an IoT solution for skincare problems in Japan called Optune, targeting busy women in their 30s and 40s. The service analyses the user’s skin condition, measuring factors like humidity as well as data such as sleep pattern and menstrual cycle. Upwards of 80,000 different combinations can be generated from the personal dispenser, which features five cartridges. The cost is 10,800 JPY ($92) per month. There is no need to order more refills manually, as this process is completely automated and users receive new cartridges once the previous ones are almost empty. The technology was introduced at RISE 2019 in Hong Kong, Asia’s largest tech conference.
2. DMM Pachinko and Media Subscription
DMM has been long known for its vast online selection of media for rent and purchase. In recent years, the company has branched out into other areas such as 3D printing and pachinko, through its Pachi-town service. Now, DMM is offering a flat-rate subscription service which will be launched in collaboration with amusement specialists Ace Pro. The upcoming service was announced in November 2019. Pachinko is the most popular form of gambling in Japan and has been legal for a long time, unlike casinos which have only recently been deregulated.
The elaborate electronic counterpart to pinball has such a strong presence that in 2015, Japan’s pachinko market generated more revenue than casinos in Las Vegas, Macau and Singapore combined. DMM’s subscription package aims to boost customer loyalty through convenience, by offering free water and a range of premium services via a smartphone app as well as lottery draws and unlimited consumption of available media, such as comics. This not only targets regular users, but also DMM employees.
3. Dining out subscriptions
There’s an increasing tendency for restaurants to offer some kind of subscription service for customers, either in the form of a discount commuter pass, a monthly membership, all-you-can-eat/drink.
For instance, Kushikatsu Tanaka, a restaurant chain operating 265 stores across Japan started offering a drinking pass at a cost of ¥500 JPY per month, which gives customers discounts on any drink ordinarily less than ¥400 JPY. This was introduced because the restaurants are now completely non-smoking, which means the customer base has shifted more towards families and so less alcohol is being consumed. The passes are available in a physical commuter card format, or digitally via the user’s smartphone. Within two months, more than 100,000 cards had been issued.
But these types of subscription services are not limited to chain restaurants. 29ON (Nikuon), a high-quality yakiniku restaurant in Tokyo that has an annual membership enabling customers to receive the usual ¥14,000 JPY course of yakiniku at a discounted price of ¥5,000 JPY each time they visit. Membership is limited, and the slots sell out quickly through a crowdfunded process. Likewise, Coffee Mafia, an independent cafe in Shinjuku, Tokyo offers a monthly ¥3,000 JPY subscription service that enables customers to get a free cup of coffee worth ¥300 JPY each time they visit throughout the month.
2019 Japan Subscription Business Awards
There is even an official association dedicated to the promotion of subscription-based services in Japan, with an award ceremony held in December, hosted by the Japan Subscription Business Association and sponsor companies. The top prize value is ¥1 million JPY.
The winners for 2019 are as follows:
Grand Prix: Toy Sub by Torana, Inc.
Torana, Inc. offers a monthly rental service at a cost of ¥3,340 JPY for toys and educational items for children aged between 0-3, delivered to the customer’s home. Each toy is chosen in accordance with the child’s age and growth level. It was started in 2015 and serves more than 2200 households.
Jocy, Inc. offers a beauty salon subscription service called “MEZON” featuring a menu specialising in shampoo, blow dry, and hair care starting from ¥16,000 yen per month. The service allows consumers to go to any beauty salon. This service was started in 2018 and currently has over 25,000 users.
We’ve covered this service here already, but Shiseido was recognised for its contribution to the premium subscription line-up, and has gained a lot of popularity considering it only launched in July 2019.
This is one for photography enthusiasts. GooPass is a service that enables the exchange and replacement of camera parts and accessories at a cost of ¥5,800 JPY. It was established in 2018 and has more than 10,000 users. In November 2019, GooPass announced a tie-up with smartphone-based home rental service OYO LIFE. Camelove also partnered with messaging app giant LINE to allow users to access camera equipment at a discounted price.
Paidy Award: lenet by White Plus Co. LTD
FinTech company Paidy awarded White Plus with their award for the ‘lenet’ home dry cleaning service. This is a convenient option for busy individuals who often find that dry cleaning shops are shut when they want to use them, or they can’t fit a visit around their schedule. According to the company, ‘if you use lenet, laundry won’t be a chore.’ The service includes regular clothing, shoes, bedding and also a clothing storage solution.
GMO Payment Gateway Award: Dyson Technology Plus
Dyson won the award for their 1,100 JPY per month service allowing users to trial a wide range of products without having to commit to a full purchase. This is an ideal way to gain the trust of local consumers, which is extremely important in Japan.
Both established and new brands can tap into this market
Although it certainly makes a difference to have a high level of trust among Japanese consumers before launching a subscription service, well-established companies aren’t the only ones who can benefit from this model. It’s worth bearing in mind that media and entertainment remains to be one of the primary subscription service areas, and these often need to be localised to appeal to Japanese interests to compete with the likes of Hulu, Apple Music, Netflix and Amazon Prime. If you’ve got an existing subscription offering elsewhere in the world and want to know whether there’s truly a demand for it in Japan, nothing will tell you better than conducting market research direct with consumers.
Tokyoesque can help you to test your service and guide you towards gradual expansion. Contact us to discuss how we can help your business.