The number of single-person households has been on the rise in Japan, driven by changes in culture and lifestyles, and rapid population ageing. This has impacted consumer spending patterns and led to an increase in the total number of households, thus offering potential for many sectors including household durables, communications, leisure and recreation and retailing. Japan’s social welfare system will however be further burdened by the rising number of elderly people living alone.
Households by Number of Persons: 2001-2011
Source: Euromonitor International from national statistics/ UN
- The number of one-person households in Japan reached 16.1 million, accounting for 31.5% of all households in 2011. This is significantly higher than 13.2 million or 27.9% of all households in 2001;
- The rise of single households is related to changes in Japanese culture and lifestyles. While young professionals tend to delay their marriages in order to focus on their careers, the number of never-married adults as well as the divorce rate are rising. Japan’s marriage rate declined from 6.3 per 1,000 people in 2001 to 5.7 per 1,000 people in 2011. As more Japanese women are working nowadays, the average age of women at marriage increased to 30.0 years in 2011, up from 28.8 years in 2001.
- In addition, rapid population ageing has resulted in a rise in the number of elderly people living alone. The share of population aged 65 and over made up 23.3% of Japan’s population in 2011, compared to 20.8% in 2006.
Being the largest group of all household types, one-person households constitute an important market segment in Japan. Businesses will have to adapt to changes in consumer demands caused by the growth of one-person households:
- Due to the rising trend of single-person households, the number of households continues to expand in Japan despite a slight drop in population since 2008. In 2011, the number of households in Japan stood at 51.1 million, compared to 47.3 million in 2001. An increase in total household number will enlarge the potential market for household goods including durables such as televisions, refrigerators, furniture and washing machines;
- Generally, higher per capita living costs including rents and energy among single-person households can lead to less disposable incomes, especially for elderly people living alone. The purchasing power of single households consisting of professionals, however, can still remain high owing to steady sources of income and no family responsibilities. The annual average consumer expenditure of one-person households in Japan stood at US$41,319 per household in 2011, compared to US$66,999 for two-person households;
- The growing number of single-person households means there will be more demand for single-value packs and convenient products including foods. Convenience stores selling packed foods and everyday items have experienced rapid expansion in Japan since the 2000s;
- People living alone tend to have a greater demand for entertainment activities, thus creating opportunities for businesses in the leisure and recreation sectors. Solo-dwellers also offer a potential market segment for communications equipment and online social networking since communication is often crucial to their social lives;
- The rise in one-person households will lead to a higher housing demand, especially for apartments. While this creates opportunities for the construction industry, it also poses a challenge for Japan’s urban regions such as Tokyo given their shortage of living space;
- A higher number of lonely elderly people who often have no family to fall back on will place a further strain on Japan’s already-burdened social welfare budget. In 2011, Japan’s government expenditure on social security and welfare grew by 4.7% year-on-year in real terms, higher than a 3.0% real growth of total government expenditure.
Annual Real Growth in Government’s Total Expenditure and Expenditure on Social Security and Welfare: 2006-2011
Source: Euromonitor International from Government Finance Statistics (GFS)/national statistics/Eurostat
Single-person households will continue to be the fastest growing and largest household group in Japan.
- The number of one-person households is forecast to grow by 11.5% over 2012-2020 to reach 18.2 million by 2020, making up 34.5% of all households in 2020.
- The number of all households is also expected to increase to 52.7 million by 2020, up by 3.3% over 2011. The size of households, however, will continue getting smaller as a result of low birth rates and changes in traditional family values. By 2020, the average number of occupants per household would be 2.3 people, compared to 2.7 people in 2000. Meanwhile, Japan’s total population would shrink to 123 million people by 2020 from 127 million in 2011.
- Due to the uncertain economic outlook and the decline of lifetime jobs in Japan, the trend of shifting towards lower-priced products and services will continue to rise among Japanese consumers including single-person households. Per capita consumer expenditure is however forecast to grow at an annual average rate of 1.5% in real terms over 2012-2020, partly due to greater spending by retirees out of their wealth accumulated from the past.