Segmentation in Japan – 10 years of Chomonicx - 2005 - 2015

In 2005, we introduced Chomonicx, a segmentation system built by Acxiom to the Japanese market. Here's what we have learned about Japan over the last 10 years:
In 2005, we were told that Japan was “different”, that it was too homogeneous, that we could not segment it and that nobody would buy our product. 10 years later, we are selling the third version of Chomonicx so clearly we were right not to listen to these negative opinions.
In 2005, Japanese lifestyles where already diverse if still much less than in the US and Europe. Compared to the 65 clusters of the UK and the 45 of Holland, we created 32 clusters in Japan focussing mostly on urban areas. In 10 years, Japan has catched up with most European countries, if not yet with the US and the UK. We now use 36 clusters in Japan and can segment further with other tools.
The most obvious differenciation has been between the big cities and the countryside. In 2006, for the first time, the Tokyo, Osaka and Nagoya areas represented half the population of the country. Since growth in these cities as well as in a few secondary cities such a Fukuoka, Sendai and Sapporo has accelerated while the countryside is now contracting.
The evolution of Japan over the last 10 years has followed that of The UK and France where growth concentrated in London and Paris to the detriment of the countryside. Japan is a complex country with many cities of different size and it could therefore have followed the example of the US and Germany where growth is more balanced among a large number of cities without one taking a clear lead. It did not. Looking at clusters, the contrast between Tokyo and Osaka is now extreme. The richest clusters which did not exist 10 years ago are now almost exclusively concentrated in Tokyo.
Conversely, the emptying of the countryside and of small cities is accelerating. The two main factors: lower incomes and aging being the main engine of this decline. This pattern is mostly visible in the hollowing out of small cities where city centers have been decimated by suburban shopping malls. The contrast between cities where the center has survived and those where it has not is extreme and is clearly visible through its impact on income.
Likewise, in the countryside, the income decline has been relentless over 10 years but it is mostly due to aging and the impact has therefore been less severe. Still, the avarage age in many areas is now over 65 and should therefore be of extreme concern to the government. The merger of villages has dampened the effect of the closure of facilities and ironed out the statistics but eventually the “trick” will stop working when there is only 2 or 3 hospitals left in Tottori or Akita and the avarage population of the whole prefecture approaches retirement age!
The income in the large suburbs of Japan has also declined although less severely than in the countryside. The contrast between the social groups is less severe than in the downtown urban areas but very visible nevertheless.
The Japanese suburbs have grown as onion rings around the old dense city centers after the second world war, following the road and rail networks and were therefore, from the beginning segmented by age, or year of development. This structure has now cristalised with many areas where everybody belong to the same age group. This is especially true for council flats and “my home” housing developments.
The consequence is that after 20 years, schools are empty and inexistant nursing homes in high demand.
We have also seen the growth of the suburbs stop with very few localised exeptions and a trend of retired people going back to live in mansions closer to the city centers. This has been one of the trends behind the explosion of high rise apartments in downtown areas of Tokyo and Osaka.
There will be a new census in 2015 and we should therefore see the confirmation of these patterns over time. When the results of this census are published by the end of 2017, we will have moved to our new, more precise household segmentation system. Japan will then have a very precise view of its population and the challenges it is facing but it will still need to find appropriate answers.