Subscription business models are experiencing significant growth across various sectors in Japan. According to Yano Research Lab, the domestic BtoC subscription service market is projected to rise by 5.2% year-on-year in 2023, reaching approximately 943 billion yen. This marks a 4.2% increase from the previous year. The market spans seven major sectors: fashion, restaurant services/takeout, lifestyle, leisure and entertainment, information content, education, and medical and health.
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Market Expansion and Diversification
The subscription market in Japan spans seven major sectors: fashion, restaurant services/takeout, lifestyle, leisure and entertainment, information content, education, and medical and health. This diversity indicates that subscription services are no longer confined to digital content alone but have permeated essential daily life items such as clothing, food, and shelter. The growing presence of platform operators has facilitated this expansion, making it easier for businesses to adopt and thrive with subscription models.
Notable Examples of Subscription Businesses in Japan
Aside from the usual categories that offer subscriptions, like Amazon Prime, Netflix, Spotify, etc., there have been a rise on subscription as a business model in Japan on different kind of businesses – like home appliances, skin care, toys, and clothing. Below are some notable examples that are breaking the norm of businesses.
Rentio: Home Appliance Subscription
Rentio offers a subscription rental service for electronics, allowing consumers to try products without the commitment of purchasing. The range of items includes cameras, electronics, suitcases, baby strollers, instruments, and fashion items. Rentio’s flexible plans cater to both one-time use for travel and monthly subscriptions for daily life, making it a versatile option for consumers.
Rentio’s Rentify
Rentio Corporation has launched “Rentify,” a rental e-commerce site platform enabling businesses to operate their own rental services with flexible subscription plans. This platform allows companies to integrate Rentio’s rental system into their operations, enhancing customer options beyond traditional purchasing.
Curel: Skincare Subscription
Through Rentify, Curel offers a subscription service for their skincare products. This service is also available on Kao’s official online store, My Kao Mall. The subscription model simplifies starting and maintaining a new skincare routine for users, providing a convenient and consistent supply of products.
Kids Laboratory: Toy Subscription
Kids Laboratory provides an educational toy subscription service tailored to children’s development and interests. The service delivers educational toys, mainly wooden ones, to families with children aged 3 months to 8 years old. The flexible exchange policy allows for item swaps beyond the regular shipping dates, ensuring continuous engagement and satisfaction.
Clothing Subscription
Clothing subscription services have become increasingly popular in Japan, offering regular deliveries of stylish outfits selected by professional stylists. These services provide a cost-effective alternative to traditional shopping, with prices starting from as low as 1,300 yen per item. Subscribers receive outfits worth more than their subscription cost, eliminating the hassle of mixing and matching clothes.
Why Prioritize Subscription Models in Japan?
The steady growth and diversification of subscription services in Japan highlight a lucrative opportunity for app marketers looking to enter and expand in this market. Here are some key insights and recommendations:
- Consumer Demand: The increasing consumer demand for convenience, flexibility, and cost savings drives the subscription model’s popularity. Understanding and tapping into these preferences can lead to high customer retention and satisfaction.
- Market Readiness: Japan’s market is ready and receptive to innovative subscription services. The success of companies like Rentio, Curel, and Kids Laboratory demonstrates the potential for new entrants to capture market share.
- Digital Integration: With the advancement of technology, integrating digital solutions such as apps can enhance the subscription experience. Features like personalized recommendations, seamless payment systems, and easy management of subscriptions can attract tech-savvy Japanese consumers.
- Cross-Sector Potential: The subscription model’s applicability across diverse sectors opens up numerous opportunities for app marketers. Whether it’s fashion, lifestyle, education, or health, there is ample room to innovate and provide value-added services.
Conclusion
In conclusion, the subscription business model presents a promising avenue for growth in Japan. By leveraging the increasing market demand and the willingness of consumers to adopt subscription services, app marketers can establish a strong foothold in this dynamic market. Prioritizing subscription models could lead to sustained growth, high customer loyalty, and a competitive edge in the Japanese market.
