Category Performance - A Mixed Year
During a period when total brand value for the Japan Top 50 declined by 9 percent, the category-level view told a more multifaceted story. While many prominent brand categories saw double-digit percentage declines, others saw strong growth.
This analysis is not geared toward simply identifying category “winners and losers” — this is too simplistic a lens when the “game” at hand involves an unprecedented global pandemic. What these category-level results do capture, however, are the ways that some categories have found themselves at the forefront of consumer demand – while others now have an opportunity to transform and reposition themselves for the new world ahead.
Can we lay this out in a chart where the text doesn’t overlap – something like the layout from the 2020 report, or how you did it for this year’s India report, which looked great
In some ways, the 2021 category data exhibits continuity from the year prior.
Cars is once again Japan’s leading brand sector, followed by Telecom, Retail, Technology, and Entertainment – in the same order as last year. Cars is once again led by Japan’s most valuable brand, Toyota. And for the second year straight, Cars accounts for about one-quarter of the BrandZ™ Top 50’s total value.
The year-to-year data paints a slightly different picture of Japan’s biggest brand categories. Though their share of the Top 50’s total value remained relatively stable, Cars and Banks logged double-digit percentage declines in value from 2020 to 2020. Neither decline is exactly a surprise: Banks’ balance sheets were unavoidably impacted by the 2020 global economic contraction. And overall sales for cars (and, indeed, all forms of travel) has also taken a hit. (Even in cases where consumers might want to buy a new car, their ability to pay for big-ticket items has declined of late).
Categories like Technology and Retail present an interesting case. While not desirable in normal times, their year-on-year declines of 9 and 8 percent, respectively, puts them squarely in line with the overall value decline of the BrandZ™ Japan Top 50. What’s more, there were numerous cases in each category of brands successfully retaining their relevance in uncertain times. In retail, brands focused on home and health performed especially well, while technology brands that were focused on providing digital fun also proved resilient.
Overall, Japan’s de-growth trends are consistent on the category level with global shifts in spending through 2021. In addition to global weaknesses in aforementioned categories like Cars and Banks, Alcohol and Food brands everywhere are struggling to cope with restricted foot traffic and bar closures.
What’s interesting, however, are the ways that current moment may also create new conditions for categories’ recovery.
The automobile industry, for instance, has traditionally faced competition from public transport and ride-hailing apps. Now, however, cars may have an edge as personal transport vehicles become seen as the more “safe” and “sanitary” alternative. (So, too, does road-trips and domestic travel seem like an attractive alternative to long-haul vacations - with implications for both the Automobile and Travel categories).
In the Banks category, sanitary concerns have brought many new consumers to the world of digital money, credit cards, and online finance. Already, 2020 has seen some of Japan’s biggest financial institutions struggling to keep up with demand for new credit card numbers. Brands in categories ranging from Banking to Retail plant to continue with experiments with automation and robotics – and have an opportunity to set a new global standard in how to fuse new technology with typically Japanese high standards of service.
The category with the largest percentage growth for 2021 is Entertainment, which increased by 19 percent. This, however, is a category represented by a single brand in the BrandZ™ India Top 75: Nintendo, which saw strong worldwide demand for its Switch console as in-home entertainment soared – and which also boasts a beloved stable of Intellectual Property characters like Mario, Animal Crossing, and Pikachu. Home Care, represented solely by the detergent brand Attack, grew by 5 percent.
Equally notable, then, are the larger, multi-brand categories that managed to grow in 2020. These include Personal Care, which increased by 7 percent thanks to growth by Shiseido and SK-II. Telecom grew nearly as fast, with an overall increase of 5 percent. Telecom, meanwhile, grew by 5 percent in 202- with consumer demand for data on the rise as people moved activities like entertainment and business into the home. Telecom providers au, Softbank, and NTT all exhibited positive year-on-year growth in the BrandZ™ rankings.
Going forward, Japanese brands of all stripes and pedigrees will have to work hard to maintain their positioning into 2021. Brands that are part of these “Top Categories” are no exception. Personal Care brands, for instance, will have to contend with the fact that Japanese are leaving home less often - and thus may exhibit less demand for makeup or luxury skincare. Nintendo, meanwhile, will need to balance its growing shift into the experiential space (including its partnership with Universal Studios theme parks) with new protocols for travel.
Brand Spotlight: Nintendo
“Ring Fit Adventure,” “Animal Crossing,” and “Pokémon Sword and Shield” are just some of the many Nintendo games that made the brand’s Switch console a must-have during the COVID-19 period. Even moreso than other entertainment brands, Nintendo’s games fit well with the new lifestyles and needs of a post-pandemic world. Some were designed for players to be physically active at home and outside, while others met the need for social interaction – helping people escape from the stress of social distancing.
As a brand, Nintendo is seen as very Different - as leading the way, and shaking things up. It is also considered the best at what it does.