The potential spending power of young, wealthy city-dwellers is well-documented. Eighty percent of wealthy Chinese are under age 45, according to a recent McKinsey report entitled The Coming of Age: China’s New Class of Wealthy Consumers. That’s compared with 30% in the US and 19% in Japan.

The economic crisis has shaken the assumptions of the Chinese middle class like anyone else. They are less likely to take risks, spend unnecessarily, or change jobs on a whim than they were a year ago. However, individual confidence – belief in oneself – remains remarkably high, especially among females.

Female consumers in their late teens and early 20s interviewed for the research have clear plans for their futures, which involve 1) early 20s: marriage, 2) mid-20s: having a child, and 3) late 20s: returning to work.

Rather than being a hindrance to a career, the young marriage age increases the opportunities for urban women, who expect to have their child (only one child) by their late 20s. The presence, normally, of four sets of grandparents mean that childcare is free and easy to find, so women don’t have to give up their careers, and most don’t want to. Unlike for previous generations, or for people living in rural areas, these women see work not only as a right they are not willing to give up, but also an escape from the pressures of home and family.

With these social/familial obligations taken care of at a relatively young age, but both men and women retain a sense of adventure and personal belief that might for people in the West or Japan peak in their 20s. This enthusiasm is often channeled into a career, the primary means of achieving money, status, friends and personal freedom.

More details of this and nine other consumer shifts are available in Five by Fifty’s China Shifts 2009 report. For a sample, contact us.

A woman relaxes after a work out in a germanium bath.

The era when a sports gym could get by with an array of exercise machines and perhaps a pool is over in Japan, where people are taking a more holistic approach to wellness. Innovative sports clubs are responding with with an array of new services.

Bodies, a women-only fitness club with 20 locations around Japan, features relaxation stations where women can soak their arms and feet in hot water infused with germanium, a popular treatment claimed to boost the immune system and combat free radicals that speed the aging process.

Recently opened in the trendy Daikanyama area of Tokyo, known for its quaint cafes and fashion boutiques, is Athlonia, Japan’s first sports gear shop specializing in triathlon equipment. The shop recently launched a triathlon school, held in collaboration with fitness club chain Tipness, and an adjoining Hawaiian cafe selling dishes with healthy ingredients such as avocado and brown rice.

Bodies also started a women-only running club, a decision it took after talking to its members as well as users of ABC Cooking Schools. There is a running studio in Marunouchi, an area of Tokyo home to a large number of female office workers. Women pop into the studio to change, then run 5km around the nearby Imperial Palace grounds, then return to the studio for a shower.

The club, which is open to beginners, advises members on improving themselves on several levels through running, fashion and beauty. The club’s website features “Beauty Recipes” for do-it-yourself health drinks, as well as organizing tours to the Honolulu Marathon.

Contact us for our ethnographic research on women’s changing attitudes to wellness.

Students at Athlonia's triathlon school.

Students at the ABC Cooking School in Marunouchi.

As we previously reported, the fact that men are behaving more like women makes them an increasingly attractive target for product developers and marketers, and some multinational corporations are responding accordingly. This shift is happening around the world, but especially in Japan, as well as South Korea and Greater China.

Here are some more examples of the shift in action in Japan, offering inspiration for other markets:

ABC Cooking Schools, with locations around Japan, is training an army of amateur chefs. Until two years ago, they only accepted female students. As the Baby Boomer generation began retiring, the competition began offering men-only classes for retirees. ABC took the step of starting co-ed classes at locations with a high density of corporate workers, such as Ginza and Marunouchi. The number of male students has quickly risen to around 600 at the schools.

Another service associated with women that has begun to patronized by men can be found at the 48 nail salons throughout Japan operated by Nail Quick. The number of male customers has risen to the level that the salons now offer a “men’s course” costing 2,940 JPY, and including disinfecting the hands, removing cuticles, and applying clear or colored polish.

One of more surprising hit products comes from underwear maker Wishroom, which has unveiled a men’s bra, which quickly became a top seller on the online shopping site Rakuten. The Wishroom store on the site claims the bra can give men a “calm, relaxed feeling”.

Click here for more insights on shifts in male behavior or ask for a sample report.

S. Korean cosmetics retailer The Face Shop

One air-traffic route that hasn’t slowed amid the recession has been the one between Japan and South Korea. In February, Japanese tourist arrivals in South Korea were up 70% from a year ago, accounting for 48% of all visitors. Numbers were also up from China and Southeast Asia. The primary attraction is shopping, especially cosmetics.

Until now, the reason was the exchange rate, with the won tumbling and the yen soaring, making Seoul an attractive shopping destination. Although the exchange rate has since leveled off, South Korea remains attractive for Japanese, who see it as accessible and safe, and because many South Koreans in retail and hospitality speak Japanese.

The most appealing products are cosmetics, with Korean brands such as Missha, The Face Shop, Skin Food and Nature Republic selling high-quality products at affordable prices for Japanese. At the Nature Republic store in the Myeong-dong shopping area, around 80 percent of customers in April were from Japan, according to the JoongAng newspaper.

In February, the Korea National Tourism Organization chose IKKO, a Japanese transgender makeup artist, as an official ambassador. IKKO has advocated Korean cosmetics in the past.

IKKO, makeup artist and tourism ambassador

“Korean women have better skin than Japanese women,” IKKO said when appointed to the role. “I want to introduce the lifestyle of Korean women, who constantly detox their bodies and minds, to Japan.”

It’s not only the government that has wised up to the revenue potential. Retailers in Myeong-dong are adding Japanese- and Chinese- speaking staff and signage.

The most popular product is Korea-originated BB cream, short for Blemish Balm, which was Japan’s seventh most popular brand last year, according to the Nikkei newspaper. Some 2.6 billion yen (US$26 million) of BB cream were sold in Japan after its launch in April, according to its manufacturer, Hanskin. Eyeshadow, mask packs, mascara and lip gloss from mid-to-low range local brands like Etude House and Missha are also top sellers. Their focus on natural ingredients is an added appeal.

Photo: JoongAng newspaper

“Whenever I come to Korea, I buy around 10 BB creams and refrigerate them so I can use them over a year or so,” Japanese tourist Yoko Wada, 22, told JoongAng at a Hanskin store in Myeong-dong. The price is about half that in Tokyo.

With South Korean brands seen as increasingly trustworthy and desirable in Japan, and Japanese consumers being increasingly cost conscious, the opportunities for South Korean cosmetics brands are obvious. The exchange rate advantage they have enjoyed since October is evaporating, so instead of waiting for the Japanese customers to come to them, they will find it increasingly necessary to target Japanese consumers on their home turf.

To request a sample of Five by Fifty’s Korean Beauty Report, 2009, contact us.

Your message here? (AP Photo via The Daily Beast)

Without wanting to minimize the seriousness of the health issues at hand, the reality is that people around the world are considering how to protect themselves. The prospect of having to wear a face mask if Swine Flu continues to spread may be no big deal in Japan and Asian countries that experienced SARS in 2003. However, for consumers elsewhere unused to such things, the face mask poses a serious fashion dilemma.

The result is the mask becoming a canvas for personal expression. Individuals in affected areas who want to be victims of neither health nor fashion have begun to get creative and decorate their masks, as this photo gallery from The Daily Beast shows.

Mint Designs' cheeky chimp face mask

Some manufacturers like Kimberly Clark already put out limited numbers of colorful masks decorated with Disney cartoon characters for children. Japanese brand Mint Designs has fashioned a cheeky monkey-style mask, and artist Yoriko Yoshida was recently inspired to create a set of beautiful, witty and sometimes faintly morbid face mask illustrations.

Mt. Fuji face mask by Yoriko Yoshida

What’s next? The face mask covers the most important area of the body for communication, and the natural target of the eyes of others. So if face masks do become de rigueur in some places for a while (and it’s far too early to say that they will), the blank white space will become a unique marketing opportunity for the right brand with the right design and the right message.

Contact us to find out more.

Japanese office workers in their 20s prefer communicating on the sports field.

Mori Building, a Tokyo-based property developer, manages offices occupied by several leading Japanese and international companies such as Rakuten, TV Asahi, Yahoo! Japan and Goldman Sachs. Participants in the survey were readers of Office Life News, a free magazine distributed to people working in Mori offices.

The survey found that 85% workers in their 20s see such “informal communication” as important. By comparison, only 24% of workers over the age of 50 responded that it is “important”, with 47% seeing it as “somewhat important.”

New recruits at an admission ceremony for Toyota. Casual Friday is still a dream for most corporate employees.

Workers in their 20s stated they value communicating with coworkers outside of the office because they can “get new information” (59%), and because it can “improve the work atmosphere in the office” (34%). 70% of workers in their 20s said they would like to increase opportunities to informal communication with coworkers.

Mori Building has begun organizing activities to give workers a chance to meet up outside of the office, such as the “Mori Cup” a soccer tournament for teams of people working in Mori Offices.

A guest house in Tokyo with a stylish interior.

Some young Japanese are rejecting single-living and opting to share spaces with others, usually strangers, as they search for a sense of community. Guest houses (rental residences with private bedrooms and communal kitchens and bathrooms) are enjoying a surge in popularity, especially among Japanese women.

The number of guest houses in Tokyo and three surrounding prefectures was less than 100 in 2003. Today there are over 600. A website, Guest House Hitsuji (“Guest House Sheep”) provides a directory of guest houses around Japan as well as advice for choosing a guest house. In the past, guest houses were used mainly by foreigners staying in Japan for a short time, but non-Japanese now make up less than 30% of residents. According to a recent survey by Guest House Hitsuji, around 70% of guest house residence are single Japanese women, mostly in their twenties.

Popular guest houses emphasize communal living spaces.

One such guest house is “Bauhaus” in Minami Senju, a commuting hub, which boasts a stylish interior, luxury amenities such as jacuzzis and fireplaces, relaxing communal spaces and comfortable private rooms. Prices for a single room range 65,000-82,000 yen, which is slightly more than a small studio apartment.

Living with others offers a feeling of security, space and community, especially when compared with the tiny, often uniform apartment. It’s part of a growing shift – powered especially by the mobile Internet – of young Japanese creating new communities beyond the traditional realms of work and family.

Catherine Zeta-Jones for Unilever Japan's Lux campaign

In a recession, consumers treat themselves with daily luxuries and are often prepared to replace a holiday to Hawaii with a small-scale splurge. Beauty and Wellness categories are ripe for premiumization at this time.

That’s why cosmetics and consumer goods’ companies are currently hiring Oscar-winning actresses and handing out free samples to grab customer interest.

Shiseido completely updated and relaunched its Tsubaki line for the first time in March. Kao has expanded its Asience line, Unilever has done the same with Lux Super Damage Repair, and P&G is aggressively marketing a leave-in treatment with the Panteen brand.

Shiseido and Kao have taken the battle to the streets, with prominent ads in subways stations and free samples for pedestrians. Unilever and P&G, on the other hand, have focused on television and high-profile web advertising. For Lux, Unilever employed a Hollywood crew to shoot a short film staring Catherine Zeta-Jones.

For more on current “Up-Trading” trends, click here.

An advertisement for the Isetan Girl floor of the Isetan department store.

A Starbucks location in the department store was specially designed for a communal feel.

Since September, 2008, Isetan department store in Shinjuku, Tokyo, has operated a successful section called “Isetan Girl,” which offers affordable fashion items, accessories, and interior goods aimed at Japanese women from mid-teens to early 20s. Stylish yet affordable Japanese brands such as Rich, Plush&Lush, and Cher.  The focus here is not on the luxury goods that Isetan has long been associated with, but rather functionality and affordability. A new shop sells the Japanese brand Bonica, offering casual clothes to be worn at home.

When planning the department, Isetan survey consumers in the target group and found that women in their teens and 20s choosing clothes based on various people’s opinions and expectations, depending on the situation. At home, their own opinion governs what they wear, at school and on weekends that of their friends, and at formal occasions the opinion of their parents is the important thing. Accordingly the store is divided into five different sections: Weekend, Private Time, Campus, It! Girl, Communication.

A recent addition is Swati, a shop that sells decorative candles shaped like high-heel shoes and other interior items. Other shops sells affordable jewelry and accessories.

A Starbucks location on the floor was specially designed to create a communal feel, with shared sofa seating rather than private tables.

Swati brand candles.

The 100ml bottle has a suggested retail price of 190 yen.

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