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This article is written based on public information and is only for information exchange purposes. It does not constitute any investment advice

In 2017, the Chinese translation of "The Fourth Consumer Age" suddenly became popular in China three years after its release.

From JD.com, the leader of the new retail e-commerce industry, to Anta, the traditional retail giant, they have visited the author of this book, Mr. Sanpu Sanpu.

According to Sanpu Sanpu's own account, before the epidemic, he had given no less than 30 speeches to various groups of Chinese entrepreneurs visiting Japan, and had come to China specifically to give speeches three times.

After "The Fourth Consumer Age", Hidetoshi Miura published his latest macro-consumption research book "The Lonely Society (Forecast for the Fifth Consumer Age)" in 2023.

In this book, Hidetoshi Miura openly expressed his own doubts: why "my research on Japanese consumer history is regarded as a benchmark by Chinese entrepreneurs"?

Even though Sanpo Miura believes that most Chinese readers do not fully understand the content of The Fourth Consumer Age, he still highly praises Chinese companies and entrepreneurs: "Compared with the relatively rigid business environment in Japan, at least Chinese entrepreneurs are working hard to seek change."

Mr. Miura Hideki has a vision beyond ordinary people, and we also have our own thoughts. Based on Mr. Miura Hideki's new work and the evolution of Japan's consumer industry in the past cycle, we will focus on the following contemporary issues in this report:

With this as an example, today we follow Mr. Sanpu's new work and his past research on Japanese consumption to explore the core reasons for the current price and content of e-commerce platforms. Do these mainstream e-commerce platforms fully understand the historical depth of the Japanese consumer market, and do they really understand the core competition of my country's current consumer market?

01

A brief introduction to the fourth consumer era

Long before the publication of "The Lonely Society (Forecast for the Fifth Consumer Age)", Hidetoshi Miura had also published two research works on the Japanese consumer market: "The Three Lows" and "Underclass Society".

Among them, the 2007 research report on comprehensive social consumption, "The Lower Class", caused a wide response as soon as it was published. This report revealed a social phenomenon: the increasing number of people in the lower class and how it affects the overall consumption concept of society.

The so-called lower class is not really the vagrants at the bottom of society, but refers to those at the lower end of the middle class. Their material life has long surpassed the level of food and clothing and can even reach a well-off level, but they lack the motivation to move forward in terms of material and spiritual development.

The book draws an analogy with the British "IPOD" generation, whose labels represent: insecure, pressured, over-taxed, and debt-ridden.

This generation not only has to bear the debt (housing price) pressure brought about by the economic bubble, but also has to face the dilemma of reduced income and increasingly difficult wealth creation. At the same time, the stagnation of economic development also means that from a personal perspective, the upward channels are blocked and efforts become useless.

Therefore, more and more young people choose a cheap lifestyle that is aimed at maintaining basic survival, and have lost their fighting spirit and will to strive for progress. To put it in a more popular way today, they are just lying flat.

In 2012, after further deepening his thinking, Sanpo Miura had a meaningful conversation with the famous Japanese architect Kengo Kuma. At that time, Kuma's negative architecture (advocating the integration of architecture into the natural environment) was in vogue.

The two discussed the cultural trend of Japanese buildings becoming lower and lower (abandoning the bizarre cyber towers) from the perspectives of consumption, environment, and culture, and eventually formed an influential interview collection, "Three Lows".

During the conversation, the mainstream thinking of Miura Hideki's future market research was mentioned, and Japanese society was gradually moving towards the three-low principle: low risk, low profile, and low dependence.

The author uses the criteria for choosing a spouse to humorously illustrate the real-life connotation of the Three Lows: Today, popular men in Japan need to possess three traits: doing risk-free work, not shirking housework responsibilities, and not ordering their partners around in a condescending manner.

The “Three Lows” is actually another form of expression after the formation of “The Underclass”. It means that after the formation of the “underclass” and “lying flat” mentality, the aesthetic trend and preference orientation of social groups have changed.

In the end, Hideo Miura combined the opinionated content of the two books and wrote "The Fourth Consumer Age", which is regarded as the bible by the East Asian consumer industry.

"The Fourth Consumer Age" became a hit in China, on the one hand, because the "other people's stones" written by Sanpo Miura eventually became a portrayal of us: similar to Japan, our physical retail industry, consumption has indeed suffered a certain degree of impact, and there have been obvious fluctuations in the past specific cycles.

On the other hand, it is the inevitable result that after the inertial thinking of the inherent narrative of most Chinese investors and entrepreneurs was severely impacted, they tried to seek spiritual comfort and guidance in the historical dimension: in the past period of time, those industries that were thought to be infinitely solidified were still subverted without obvious technological iterations, which was shocking and difficult to adapt to.

This is like an e-commerce company that can't find any rivals even with a telescope, but is overwhelmed by the underachievers who are "looked down upon" by everyone. Such companies that advocate respecting consumers and rely on consumers outside the Fifth Ring Road just confirm the consumption concept expounded by Sanpu Hideo in "The Fourth Consumer Era".

But as Sanpo Miura said, in fact most readers and companies do not fully understand "The Fourth Consumer Age" - in our opinion, the reason is that "The Fourth Consumer Age" is actually an explanation of the phenomenon, and the cause of the problem is actually contained in the two works "Three Lows" and "Underclass Society", and the cause and effect relationship is reversed.

02

Prelude: The Fifth Consumer Age

Let’s first look at some of the superficial characteristics of books in the fourth consumer era:

The rise of shared consciousness
From pursuing famous brands to pursuing simplicity and practicality
·From admiring Europe and America, cities to pursuing self, local
"From material to service", more emphasis on people

If we only look at the literal narrative of the book "The Fourth Consumer Era", the sharing economy, the white-label economy, and the rise of domestic products just correspond to the explicit characteristics of the fourth consumer era. And these four labels are exactly the hottest topics in the entire Chinese consumer market at that time.

History always repeats itself in a surprising way, but it is not a simple repetition. Can there really be a business bible that can be summed up in one sentence? Not necessarily.

Whether conducting market surveys or conducting historical research, the study of the reasons for the formation of Japan's consumption trends cannot be separated from four macro-backgrounds: household income, asset value, expectation management and population structure.

From these four perspectives, the origin of the Japanese consumer market has a similar but different trend evolution to that of China:

In terms of household income, Japan has experienced more than two decades of negative year-on-year income growth since the 1990s, which is a core factor determining Japan's consumer market.

Figure: Average monthly income of Japanese working families, Source: Southwest Securities

From a domestic perspective, the growth rate of urban population income has indeed declined significantly in recent years. However, there are two core differences with Japanese household income: our income structure has slowed down, but there is no negative growth, and compared with Japan, where the labor force structure is relatively simple, the income growth rate of my country's rural population in recent years has been significantly higher than that of the urban population.

Figure: Trends in China’s per capita income since the 21st century, source: Choice Financial Client, compiled by Jinduan

In terms of household assets, the Japanese urban residential land price index has fallen by nearly 60% since the 1990s. The growth rate of the domestic real estate market has also declined sharply, but only third-tier cities are currently in a long-term negative growth trend, and the trend of housing prices stabilizing in first- and second-tier cities is relatively obvious.

Figure: Trends in Japan’s asset prices and asset structure, Source: Southwest Securities

Figure: Growth trend of average real estate prices in 100 cities in my country, source: Choice Financial Client, compiled by Jinduan

In terms of population, the trends are converging. In the past two years, my country's natural growth rate has dropped to negative, while the historical node when Japan's natural population growth rate turned from positive to negative was 2005, which was just before entering the fourth consumer era.

But from a structural perspective, in Japan's fourth consumer society, the population is densely concentrated in the 60- and 40-year-old range, while my country's current population peak range is between 20-30 and 40-50 years old.

Figure: Comparison of the population structure of Japan's third and fourth consumer societies and my country's population structure, source: "The Fourth Consumer Era", Zhiyan boutique research report

Expectations are essentially the result of judgments based on income, asset value and population. Overall, in terms of trends, whether it is income growth, asset prices, or population structure, we are very similar to Japan before the fourth consumer era.

However, from the perspective of specific structure, there are very obvious differences. The growth rate of income and assets has slowed down but is far from entering the range of long-term negative growth. The population structure is relatively young and consumption power is more concentrated.

And when we make comparisons, we often compare two samples, namely, samples from towns or first- and second-tier cities, and samples from rural and third-tier cities. The former are more similar to the trend of Japan's economic development, while the latter are still in the growth stage.

This is the crux of the matter:

In the vast China, its consumption characteristics can no longer be described by a single word. Its cross-sections are becoming more and more numerous, and the markets in different regions will present completely different situations. There are a large number of real consumer demands hidden in different regions and at different stages of development, which are difficult to compare one by one with the social history that has already occurred in Japan.

Maybe the economically underdeveloped third-tier cities are showing the samples of "low society", the overdeveloped industrial towns are facing the pattern of "lonely society", and the northern cities that have experienced rapid rise and gradually slowed down advocate the so-called "three lows", but there are still various regional consumer markets that are still booming. If we use one word to characterize the current domestic consumer market, it is:

Consumption classification.

We can see that Shenzhen, which is experiencing the development of new industries, and Hangzhou, which are honoring the symbols of the third consumption era, are pursuing customized, exclusive, and high-end consumer brands; we can also see that traditional industries have risen and fallen, and the Central Plains cities with a stable population structure are pursuing quality-price ratio and practicality, gradually entering the fourth consumption era; and Beijing, Shanghai and Guangzhou, which have gone through the boiling years with turbulent and illusory crowds, are paying more and more attention to cultural connections and gradually entering the fifth consumption era.

Therefore, we can see the revival of domestic products and white-label products, as well as the rise of brands such as Arc'teryx and Lululemon.

In the foreseeable future, this trend of consumption stratification and demand stratification will continue to develop. It not only has the core of the third and fourth consumer eras (the revitalization of white-label products and the rise of brands), but also initially demonstrates the trend of the fifth consumer era (connections between people, more emphasis on service and humanity) - and such an era style is destined to have both similarities and differences with Japan's typical "fourth consumer era".

Regarding such era characteristics, we tend to define it as: we are in an atypical consumption cycle context, that is, the "4.5" consumption era.

At the crossroads, whether to go left or right, whether to break out of the constraints of the fourth consumer era and rush into the new and more logically positive fifth consumer era, will be the core issue for China's economy in the next 10 or even 30 years. Under this framework, how to find a better development idea is destined to be the common historical mission of future generations.

In future research, Jinduan Research Institute will also use the theoretical framework of the "Fifth Consumer Era" as a guide, focusing on capturing typical cases in various sub-industries, in order to gain insight into the direction and context of the evolution of the times together with all sectors.

The general trend of the world is vast and unstoppable. Those who follow it will prosper, and those who go against it will perish. The above is the order.

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