How Japanese brands can find security in volatile China

Japanese brands walk a tricky tightrope in engaging with China. Politically, they still endure negative perception relating to Japan's wartime actions. At the same time, they are often welcomed as being more culturally appropriate than those from the West.

To deal with the political tension, Japanese brands consciously present themselves as 'culturally odourless'. This is a process of avoiding obvious associations with Japan through brand and product design. Scholar Koichi Iwabuch has detailed how this strategy informs the export of Japanese brands not just in China, but throughout East Asia.

While this approach was initially associated with Japan's famous electronics brands such as Sony and Panasonic, it has also spread to other categories.

For example, skincare brand Shiseido has developed China-specific brands such as Aupres that mask overt connections to Japan, and Uniqlo creates an international image which locals do not connect with the brand's Japanese origins.

Arguably this has countered subconscious consumer bias against Japan, but Japanese brands are still not immune to political backlash. Surges in anti-Japanese sentiment are a constant threat. The cyclical periods of conservatism that define Chinese politics typically see events like disputes over the Senkaku/Diaoyu Islands escalate into boycotts of Japanese brands and products.

The next step for Japanese brands in China is to create a permanent role in the lives or their Chinese consumers—the ultimate form of political insulation. 

Japanese brands in China 2.0 

The queues to get into Muji flagship stores in China can be epic, spanning a whole block. The Japanese homeware brand has become a hit with urban consumers keen to upgrade their lifestyles and homes.

In 2015, Muji increased its stores in China by 27, creating a network of 132—the largest outside Japan. Despite dipping consumer confidence, Muji also reported sales increases of 20 to 40 percent nationwide. 

Key to this success has been creating a consistent premium vision through brand storytelling and retail experience. Rather than talk about individual products, Muji presents its wider philosophy of innovation and design through in-store videos, unique shelf presentation and in-store restaurants. It also extends this vision through a unique 'online passport' system that connects consumers to the brand beyond the store.

As at Ikea, Chinese consumers 'feel right at home' in Muji stores, often treating them like their own living rooms. This level of brand engagement is the ultimate protection to any level of anti-Japanese sentiment that may arise politically.

Looking beyond Muji, similar consumer relationships can be formed by Japanese brands in other categories.  

Japanese automotive brands in China, such as Nissan, Honda and Toyota, have traditionally been seen as more economical than US and German cars. But they have not fully developed this into wider propositions such as 'the family car' or the 'urban people mover'.

As Chinese drivers become more sophisticated, Japanese auto brands have the opportunity to present themselves more as a lifestyle choice rather than simply a commodity. Future car owners in China will see their vehicle as enabling a way of living, rather than as something that signifies status.

The Japan-friendly post-95 generation

Most encouraging for Japanese brands is the attitude of China's post-95 generation, members of which see Japan in a very positive light. As the youngest of China's millennials, they are massive fans of, and participants in, Japanese popular culture. 

Local online platforms such as Bibibili, which focuses on Japanese anime, TV shows and games, are highly popular with this group. Japanese culture forms part of their lives, not as something they ape, but a reflection of themselves as modern digital natives.

This suggests that the next generation of Chinese consumers will have a more open attitude to Japanese brands. But brands will have to work as hard as their pop-culture compatriots to become a welcome and consistent part of local lifestyles.

Jerry Clode is head of digital and social insight at Resonance China.