On the surface it seems that Japan might be one of the worst prospects for anyone selling products or services related to weddings. Marriage rates are declining, because there are just fewer young people, but also because so many women don’t want to get married, often fearful of losing their career. There is good news. With more people marrying later, budgets are larger and the demand for bespoke weddings higher – and some women simply give up and have a ‘solo wedding’, creating an entirely new market in itself. All in all, this means the value of the market is holding up. With less share going to formulaic wedding firms and the jewellery, fashion and food & beverage suppliers tied to them, there is more opportunity than ever for innovative overseas players.
The wedding ka-ching continues
Weddings are big business. Catering, hotels, jewellers, fashion houses, beverage brands, gifts, travel, and a myriad of other industries are impacted by the human inclination to celebrate partnership socially and ritually.
While there are no significant foreign businesses in the wedding event market, many overseas brands are deeply involved through sales of related merchandise including wedding dresses, jewellery for engagements, marriage, clothing for honeymoons and gifts, as well as services such as hotels to hold events, travel, and food & beverages. In the past the stranglehold that the big wedding firms had on most aspects of this business meant it was hard to get a look in, but with weddings becoming more bespoke, opportunities are expanding for both major brands and, thanks to e-commerce, right down to home-based wedding dress designers that have never been to Japan.
Sadly, depopulation and personal preference mean that Japan’s wedding market seems a poor bet when looked at purely from the perspective of the number of weddings that take place – in decline now for more than 15 years (Chart 1).
Nevertheless, while there are fewer weddings, the ones that are happening are taking on more variety, reflecting individual tastes, and usually this means higher budgets. As the age of marriage rises – now at over 30 for men and just under for women – these maturer couples are keen to put their own stamp on this important day. Put simply, the bride and groom are taking charge of their own wedding plans.
This shift is borne out by surveys. Data over the last five years from Zexy, Japan’s leading bridal magazine published by Recruit, shows that of more than 17,000 couples questioned, those choosing a traditional Christian style wedding fell five points to just 55% in 2014 while ‘personal style’ weddings jumped 5.1 points to 25%. Shinto weddings stayed about the same at 17% and the Buddhist religion, normally used for funerals, at just 0.8%.
It is the shift to personal weddings that is having an enormous impact on wedding businesses, as well as those producing the merchandise and services for them, particularly dresses, gifts and jewellery, food and beverages, catering, hotels and travel. The contraction in the number of weddings has been one factor in forcing traditional wedding businesses to restructure or go out of business, but as important has been the demand for more bespoke events by couples. In other words, the formulaic, processed, wedding day of the past is no longer acceptable to many.
The marriage market: by the numbers
A quick look at the statistics suggests that the Japanese wedding market is in decline because the number of people getting married is falling, and indeed by 2013, the number of marriages had fallen to roughly the same as before WWII. The peak was reached in 1972 with 1.01 million weddings, declining after but then rising from the mid-1980s and peaking again in 2001 at around 800,000, in line with the junior baby boomer generation reaching marriageable age. Since then marriage numbers have declined consistently to just 661,000 in 2013 – 40,000 less than five years ago. Given the shrinking population and disinclination to marry, the number is expected to continue to fall. There is some good news; divorce rates peaked in 2002 at 291,000 falling to just 231,000 in 2013.
As if these numbers weren’t bad enough, of those getting married, the percentage not bothering with ceremonies and parties has doubled. In a country where getting married requires just popping down to the local ward office and putting your stamp to a couple of bits of paper in a process that takes about 10 minutes, many couples forego any other kind of ceremony or even party – or at least “postpone” it until some indefinite future time. This trend has worsened in recent years, rising from 20% of marriages in the 1990s to somewhere between 35% and 40% in 2013 according to data from the Ministry of Healthy, Labour & Welfare. One of the reasons for this is the high rate of ‘shotgun’ weddings where the bride is pregnant. The latest data for 2010 showed that well over 50% of all marriages by couples aged under 20 were shotgun weddings, with more than a quarter of those in their 20s also in the same situation.
The good news though is that when people do have a wedding ceremony they spend more, often because they are older. According to Zexy’s surveys, in 2014 the average cost of a wedding party was ¥55,000 per guest, up ¥2,000 from 2010. Indeed spending per guest has risen every year for the last 12 years. The overall average cost of a wedding ceremony and party in Japan has increased to ¥3.34 million in 2014 (Chart 2), slightly down on 2013 and 2012, but well up from the ¥2.93 million spent in 2005; i.e. given the above differential weddings are smaller but much more is being spent per guest. Add in the expenses for the engagement and honeymoon, and the average total budget has risen from ¥3.8 million to ¥4.3 million since 2005.
The highest spending region too is a surprise; not one of the bigger cities it turns out, but the rural prefecture of Gunma, where the average spend on the wedding alone was ¥3.70 million – the lowest was Hokkaido at just ¥1.9 million.
For those targeting the luxury end of the market whether for weddings, apparel, accessories and gifts, there is more good news; the ratio of weddings with budgets of ¥6m to ¥7m rose from 2.3% in 2008 to 5% in 2014.
As a result, despite the significant fall in marriages, the total wedding market has managed to hold up. Yano Research estimates the total value of the wedding market was ¥2.6 trillion in 2014 down slightly from the ¥2.76 trillion in 2009 but the same as 2005. Take and Give Needs, a leading wedding event firm, believes the market was worth ¥4 trillion in 2013, and has itself seen sales jump 30% since 2010. This matches data from Teikoku Databank for the combined sales of all wedding services businesses with sales of more than ¥1 billion, at around ¥3.6 trillion.
Marrying much, much older
One of the reasons for value holding up is that the average age of brides and grooms has increased. Brides in 2013 were an average of 29.3 if it was their first marriage, up from 25.9 in 1990 and grooms were 31 up from 28.4. This might not sound like much, but it took 60 years for a similar increase from 1930 to 1990. Data from Zexy’s own surveys suggests growth in certain ages more than the average. Couples between the age of 25 and 29 accounted for 45.5% of weddings in 2014 compared to 56.6% a decade before. 30-34 year olds accounted for 29%, up a couple of points, but the over 35s had jumped from 8.7% to 18.4%.
It is this last segment which is causing wedding budgets to rise more than any other factor. Couples are older and generally wealthier, but so are their parents, many of whom still contribute to weddings even when they are at or past retirement age and, apart from the prospect of a 40 year retirement, have little to spend their savings on other than their children and hoped for grand children. Zexy’s survey suggests around 68% of weddings are supported by parents and on average 63% of wedding costs are covered by parents, but the more expensive the wedding the greater the proportion paid by the couple themselves.
Another key factor is that traditionally guests also contribute by giving cash gifts rather than presents. Gifts from family and close friends can often be ¥30,000 and for others ¥20,000 – but the amount now varies much more due to the vagaries of the economy and the growing differentiation in wealth in Japan. With the number of guests averaging 70, the contribution from guests can reach as much as ¥2 million.
While traditional gift giving rituals are in decline in Japan, this particular gift event has gained new life through the emphasis couples now place on entertaining their guests. So-called ‘guest-participation weddings’ (it sounds better in Japanese), mean guests sharing the day by, for example, printing Polaroids and writing messages, having a band and/or karaoke, as well as receiving a much higher standard of door gift at the end of the party than in the past. These types of weddings now make up 20%, up four points since 2008. As a result the average amount spent on gifts for guests increased to a total of ¥350,000 per wedding in 2013 from ¥291,000 in 2005.
House weddings and even on the train too
Wanting a more bespoke wedding has fed a new industry in untraditional wedding formats. Around 80% of weddings used to be a facsimile of a church service followed by a hotel-based reception following a very specific formula, with the only differences depending on the budget and status of the couple’s parents.
Today weddings happen in every conceivable location, from bars and nightclubs to parks, beaches and hot spring resorts. You can even get married on the train. Seibu Railways and Kawagoe Prince Hotel (part of the same group) hooked up to offer a wedding plan aboard the Seibu Railway express. Called Happy Train Wedding, couples enjoy an hour and a half train ride wedding followed by photos in front of Seibu’s basketball stadium – apparently a popular choice – all for ¥700,000 for 50 guests.
So-called House weddings are becoming particular popular. These are held in specially built “villas” surrounded by a small patch of landscaped garden and obligatory swimming pool. They come in as many themes and styles as a love hotel’s bedroom selection, such as Southern Mansion, French Chateau, Bali Resort, Palm Beach Palace and so on.
This has served companies like Take and Give Needs (T&G) well (Chart 3). T&G itself says that house weddings now account for about 22% of all wedding venues and that hotel weddings have fallen from 75% in 2000 to just 58% today. T&G, a listed company, was established in 1998 by the then 26 year old Yoshitaka Nojiri, a former insurance executive who saw the demand for more personal wedding events and set up a business to develop wedding halls that look more like US southern mansions, but with a more Japanese feel. Crucially, T&G limits the number of weddings to two per venue per day to ensure the couple and guests feel that the space is theirs for the day and they are not part of the old-style conveyor belt, as well as offering a high standard of food. Since the launch T&G has become one of the leading providers of bespoke wedding services, all offered through its own wedding halls. It has also recognised the demand for completely customised weddings, especially within cities, and has begun opening wedding spaces with little decoration such as its new Brooklyn-style loft space in Shibuya. T&G had sales of ¥60.8 billion in FY2013, up from ¥46 billion in FY2010, and just ¥3 billion in FY2001.
At the high luxury end of the market are brands like Bulgari, which signed a collaboration with wedding business Hatsuko Endo last Autumn. As a result of the deal, Bulgari, which operates hotels and restaurants too, is able to offer an end to end wedding package from the engagement to honeymoon, right down to the hair and make up preparation before the wedding.
Wedding firms are becoming more flexible in order to meet the demand for better value. As part of the package, more are now offering a dress to take home, rather than the usual rental, and credit for weddings is also being offered at low rates of interest. IT companies are also helping; Sugukon Navi (www.sugukon.com) offers a comparison website for wedding packages to help foster greater competition, while Smakon (smakon.jp) offers a wedding management service through a nationwide chain of showrooms.
As well as healthy budgets, another source of new, if bizarre, business is that even though more women are foregoing marriage to someone else, that isn’t stopping them having a wedding. So-called ‘Solo Weddings’ are a new niche market, helping to keep wedding dress brands and designers in business. While many career women believe that marriage in Japan means choosing between work or married life – all too true in many cases – they still want to enjoy the moment. Companies offering a solo wedding ceremony are now doing brisk business. Rather than a full wedding ceremony, the ‘bride’ chooses a wedding dress, some new jewellery if she wants, flowers and a long session of grooming, and then enjoys an afternoon having her picture taken in a pretty garden. All at a cost of as much as ¥500,000.
Travel companies are also exploiting the trend, offering weekend and even week-long holidays incorporating a solo wedding ‘experience’. Prices for a one night package range from ¥250,000 to ¥500,000 but with just a rented wedding dress.
A striking fact is that although around half of the clients of solo weddings are single women, the rest are already married but feel their actual ceremony hadn’t been up to scratch or simply want to do it again – some even receive the weddings as a gift from their husbands.
The attire: less on the ring, more on the dress
Whether getting married alone or with a partner, clearly spending on weddings is on the up. For jewellery though, spending varies with no long-term trend. Zexy again has a mountain of data, showing that the average spend on engagement rings has fallen to ¥366,000 in 2013, peaking at ¥392,000 in 2009.
What is changing is the decision maker. In Tokyo, 31% of men now make the choice of engagement ring against 16% in 2007. Of note to retailers, 26% make a selection from just one shop visit, 15% after two stores, and 26% after three. 28% buy their ring from domestic stand alone stores but the second highest percentage, 14.8%, by from international brand boutiques. Overall international brands accounted for 29% versus 41.4% for domestic brands. Department stores account for 28% of engagement ring sales. The average spent on wedding rings for the bride was ¥124,000 in 2014 and in Tokyo ¥130,000 – this was actually the highest in seven years, up from ¥110,000 in 2008. For men the average rose from ¥95,000 to ¥109,000.
In Japan, the overwhelming majority of brides only get to wear the dress for the day. Almost 85% of women rent the dress, perhaps not surprisingly given the traditionally inflated prices for wedding dresses in Japan compared to Europe and the US. Indeed the cost of rental in Japan is often as much as an outright purchase in Europe. Overall the average spent on renting or buying a dress was just under ¥250,000 and the total budget for the couple, ¥450,000. In Tokyo the budget has risen from ¥230,000 to ¥250,000 in seven years. There are however now many more options (see box this page).
Fewer marriages, more choices
Marriage is declining but the value of the market is holding up well. This is also remarkable given the squeeze on incomes of the couple as well as the increasing pressures on the savings of their parents due to rising costs of basics. The exciting news for international brands and service providers is that the market is a lot more interesting given the proclivity to custom design the wedding day, as well as the much higher spending per guest, and the stable budgets on clothing and jewellery. With the major wedding businesses losing share and their traditionally tight hold on all wedding consumption waning, the opportunities for international businesses are greater than ever.
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