J-Marketing.net | Marketing in Japan | Consumers Speak Out | How do Japanese people spend winter bonuses?

Consumers Speak Out

How do Japanese people spend winter bonuses?

Sachiko Yamawake

The Japanese use the word "bonus" somewhat differently from how it is used in the US. For a long time, the bonus has been regarded as an integral part of a worker's salary, rather than an incentives associated with corporate or individual achievement. In many Japanese companies, full-time employees, not limited to those in administrative positions, receive money corresponding to a month's, or more, salary as a bonus in both the summer and winter. Although more companies are reviewing this rather standardized system and introducing achievement-based evaluations to set bonus amounts, people still count on bonus as an important income source.

JMR recently conducted an online survey of our monitors to determine how Japanese workers spend their winter bonuses.

1. 76% of workers received winter bonus

Figure 1 Did you receive a winter bonus?

According to our survey, 76.0% of 384 full-time workers received a winter bonus (figure 1). The remaining 24.0% did not receive a bonus, of which 12.5% said it is because their employment system does not include a bonus in the first place. Workers hired under a set annual salary system, rather uncommon here, are a case in point. The remaining 7.6% of those not receiving bonuses said it was due to the poor performance of their company or division.

Our survey showed nearly 8 out of 10 received a bonus. Also, according to the Japan Federation of Economic Organizations, the winter bonus paid at the end of 2003 went up slightly, after 3 years of decline. Next, let's take a look at how people spent their bonuses this winter.

2. How do they spend their bonuses?

(1) "Conservative use" accounts for 63%

Figure 2 How did (will) you spend your bonus?

In our survey, we presented 34 items as potential spending categories and asked which applied. The list included general things, such as travel, fashion items, and cars. It also covered currently popular items, such as digital camera, cell phones, and advanced game consoles. Finally, we added a category for savings and paying off loans.

The result is shown in figure 2. The top item, by a large margin, is "Saving", which makes up 53.4%. On the other hand, only 5.9% of workers plan to put their bonus into stock investments.

About half of those who received bonus deposited some, or all, of the money. Of all the presented items, "saving" , "paying off loans" and "keep in cash" can be regarded as the most "conservative" use of the bonus uses. In this case, the bonus is neither part of consumption nor does it generate income as an investment might. Overall, 63.0% of workers chose at least one of the "conservative" behaviors (see Fig. 3), confirming the impression that the Japanese are still largely in a "thrift mood."

Figure 3 Spending or Saving your bonus?

However, "conservative-use only" consumers, those who did not buy any product or service and chose to save their bonus or pay off loans, account for 25.7%. On the other hand, 74.3% of workers did consume something using their bonus money. In the next section, we will look at Japanese workers' wish list for this season.

(2) Top 10 Wish List

Besides "conservative use" plans adapted by consumers, what else do people here wish to spend money on? (Refer to the upper-half of figure 2 that covers what specific items workers intend to buy.) First place goes to "Domestic travel". Then come " Daily Fashion items" and "Digital cameras."
The wish list includes fashion-related items, housing, and travel. Five high-tech gadgets are among the products on buyers' wish-lists. Digital cameras, DVD/HDD recorders, and plasma TVs are at the center of attention these days. In a reference to the ancient Japanese sacred treasures of the mirror, the sword and the jewel, these modern-day gadgets are called "the modern three sacred treasures" - that is, they are must-have items.

The term "three sacred treasures" was also used in the 1950's. Back then, it referred to another set of must-have gadgets: black-and-white TVs, washing machines, and refrigerators. The common link here is that the modern version of the treasures are all symbols of middle-class life. Anyone aspiring to get on the middle-class bandwagon wanted to own these items. The most recent incarnations of the treasures of ancient Japan are the digital appliances listed in our survey. Nevertheless, they evoke people's willingness to buy.

<2004>