A bad scenario appears in the big economy in Asia. It is people who do not want to spend money on shopping and companies also do not raise ...
A bad scenario appears in the big economy in Asia. It is people who do not want to spend money on shopping and companies also do not raise salaries for employees.
When a famous Japanese popsicle ice cream maker decided to raise product prices for the first time in 25 years, their executives - Akagi Nyugyo, stood out to apologize to customers. In April 2016, they published a 60-second video, appearing with the president with silver hair escorted by a group of people wearing dark colors, all bowing deeply apologetically. Three years later, Akagi Nyugyo's manager, who gave the idea for the video, still felt remorse. Fumio Hagiwara said: "It's not like customers have to pay an extra sum."
Akagi Nyugyo decided to raise the price of popsicle ice cream for the first time in 25 years, managers must bow their heads to apologize to customers.Japan is the only developed country to witness a steady decline in wage levels every year. Since 1996, inflation-adjusted wages have fallen by 13 percentage points, an important reason why businesses do not want to raise product prices or invest in a narrowing market. The "spin" of the decline has led to a "deflationary mindset" imprinted on every Japanese citizen. The Bank of Japan (BOJ), Haruhiko Kuroda, took the blame on his side for not making efforts to revive the economy, applying all means in the central bank's strategy.
Savings mentality is so deep in every Japanese that when they receive bonuses for each round, they use it to save instead of spending on shopping. Michael Causton, an expert on Japanese spending patterns and co-founder of JapanConsuming research firm, said: "It is not surprising, because their wages go down for a while long".
Japan's inflation-adjusted wage growth goes down every year. (Chart: Bloomberg).After six recessions of 30 years, finding enough ways to save has become "an obsession" across the country. Therefore, Cocorico Creates a Legend, a television program, has become a hit of the early 21st century. This program presents challenges for celebrities to join, they must "survive". within 1 month with 3 USD per day. This is a profound "joke" for a rich country, where living standards are declining and poverty rates have risen to 16%.
Therefore, some people with delicate saving strategies also become famous. In recent months, bloggers have shared their life experiences - Miwa Komatsu, has joined a number of talk shows about how she earned $ 100,000 in 10 years, even though her salary is only $ 1300 per month with her personal work. office staff and have to raise 4 children by themselves. One of her secrets is to cut a pair of tissues so that she can use it twice and use a radish to clean the sink instead of paper. The 49-year-old woman said: "Everything is like a game for me. I still like to do it even though the economy is not as tight as before."
Andrea Ferrero, an economist at Oxford University, is one of the first to argue that Japanese anxiety is related to something more difficult to understand than thinking, it's demographics. . In a 2014 report called "What Explains Japan’s Persistent Deflation?" (Translated: What causes leading to deflation in Japan?), He and co-author, Carlos Carvalho, pointed out that the aging population affected the decline in interest rates and increased. Chief. That is part of the reason why Japan recovered quite slowly after the bubble of real estate and securities broke up in the early 1990s.
Japanese people all bring in their psychological savings, creating conditions for the "throne" of copper shops to cost 100 yen.5 years passed, many agreed that this will be a warning signal for other developed economies, which are aging rapidly and are struggling to face the slow growth rate after the crisis. Ferrero said: "For countries that are stepping out of the crisis, this may be the time when demographic pressures are increasingly likely to emerge."
The tight "pockets" of retired people like Makoto Miyakawa, 71, are largely the reason why Japan's growth only reached an average of 0.9% since 2000, which is about 1 / 3 compared to the previous decade. Miyakawa said his wife controlled the family's financial problems. After he retired, she decided to cut his monthly spending by half, equivalent to $ 10 a day. The couple is very careful in spending, because they do not want to overspending or fail to pay for medicine and medical treatment.
If there are "winners" appearing in this gloomy context, it is the retailers with discount programs. Nitori is a popular furniture store with a famous slogan "More than the money you spend!". Accordingly, this store has expanded its business, reaching the top 10 retailers nationwide, each month there are about 3 more stores opened. Along with the 100 yen shops, most have not yet appeared until the late 1990s, now have more than 7,000 stores and earn $ 7 billion in revenue each year. A "believer" of cheap stores, 75-year-old Naoko Ishikawa, said: "Now there is no reason to feel embarrassed when shopping at a 100 yen shop."
Huong Giang
Follow Tri Thuc Tre/ CNBC
Source: cafef
Translated and edited by Hightechbrain
