Dankai Junior – Why you should be marketing to the Japanese Baby Boomers’ kids

Whenever you read anything about demography in Japan the greying baby boomers come up time and again as being the key distinctive cohort. It is certainly true to say that to plot the course of the Japanese baby boomer generation, the so-called Dankai, is to plot the course of the Japan of recent times. Now that this unique and huge group is retiring, we will live to see a redefinition of what it means to be aged. This will have implications for Japan, and beyond these shores.

Certainly we can say that the birth of the Heisei period coincided with the summer of the Dankai generation as they were in their early forties and beginning to peak in their careers. Now as we bring in the Reiwa period, there is another large generation at a similar age – the children of the Dankai, nick-named rather aptly the ‘Baby Dankai’.

In the interests of full disclosure, I’m 44 years of age and if I were Japanese I would be one of these Baby Dankai, so I have a special interest in them. However, I have yet to see a brief pass through my agency’s inbox that asks us to concentrate on this group. Furthermore, on my strolls through Tokyo, on the train and on my mobile apps it is sadly apparent to me that two other demographics of the Japanese population: Young people up to their early thirties and the ageing Dankai seem to garner the lion’s share of attention from marketers.

 My generational colleagues seem to be hiding in the shadows! This is despite the Baby Dankai actually being the biggest bulge in the somewhat bizarrely shaped demographic pyramid of Japan.

The forgotten generation of Japan wants your attention

The Baby Dankai (or perhaps more respectfully, the Dankai Junior) are now 40-49 years old, consisting of roughly 19 million people, or 14% of the Japanese population. They are not only an extremely large demographic group; they also possess about 20% of the total purchasing power in Japan. On average, that is 48 trillion yen per year. Additionally, they will soon be in their 50s, which is when people in Japan, given its still largely seniority based system, are peaking in their salaries, have often finished off paying most of their mortgages and have funded their children’s education so they generally have the increased capacity to spend, and have done so in the past. Therefore it is likely we will see sustained buoyancy in their spending for some years to come. If you can lock in the Baby Dankai, you may well be set for the next 20 years.

Well, at least that’s my PR line on my favourite generation. But it seems fate has dealt them a hand that makes their consumer psychology a little complicated. Most of them graduated from university when the Japanese bubble burst at the beginning of the 90s. This basically meant that there were just too many of them spilling onto the job market at the same time: In the early 90s, there were about 4 jobs available for every 10 fresh grads, so that most of them started off their careers with an unsettling streak of rejection that led to many of them being unable to secure a job in an already depressing economic climate. It was also precisely at this time when lifetime employment, once taken for granted in Japan, began to break down. While companies were bread-crumbing the Dankai Jr., the Dankai stayed on their entitled salaries and in eternally secure employment thanks to the seniority system that was still fully intact 30 years ago.

Generation X looks very different in Japan

So can we liken the Baby Dankai to the Gen X of the West? While they are also definitely not an entitled generation, they don’t carry the rebellious elements that characterized the punk and grunge kids of the late 80s and early 90s in Europe and Northern America. On the contrary, the response to a system under stress seems to be strangely passive in Japan when viewed from a Western perspective. They missed out on the easy pleasures of the bubble, but they don’t complain. The Baby Dankai, instead of protesting, went within themselves. Unsurprisingly, WHO data shows that male Baby Dankai make up one of the largest age groups of suicide victims in Japan.

The Baby Dankai will inherit the Baby Boomers’ bubble wealth

Anxious about their finances, they are conservative spenders. Their silver lining? One day, they will inherit from their Dankai parents. But yet again, Japan is raining on the Dankai Jr. parade as inheritance tax here is extremely high and will swallow a chunk of the wealth accumulated by the lucky generation that preceded them.

Nevertheless, while not possessing quite the same means as their parents, it is likely that the Baby Dankai will do just fine. And we hope based on the behaviors we typically observe in Japanese in the 50+ age group they will finally start spending after a relatively hard-knock life compared to their plush-cushioned parents.

But for now, the Baby Dankai can be characterized as stuck in between their more traditionalist parents and their younger millennial and digital native children, which has made the more dynamic among them competitive and focused on investing in themselves to overcome their lackluster starting position – and what seems like a perpetual disadvantage vs their flashier generational counter-parts.

Our thinking is that the leading consumers in this group are likely to increase spending in the next ten years on real estate, education (formal, informal and cultural) including skills like learning foreign languages or learning the art of Japanese tea ceremony. As you might well imagine skin care to maintain their looks and healthy foods to maintain their bodies will sell well. What to spend their precious money on will be largely driven by the motivation to improve their lives–either through securing a better future, more financial stability or better health, both for themselves or their children.

Opportunities in the food market

As we see this group mature, fresh, organic, and health food is turning into an interesting market segment with growth potential in Japan. Not only are the Japanese slowly following the food health-craze trends that have been established in the West – Kale anyone? – they are also very willing to spend top yen if they can be convinced of the quality of a product. With the EU-Japan Economic Partnership Agreement that came into force in February 2019 between the European Union and Japan, this opens new opportunities for both fresh and processed imported foods and the Dankai Jr. might indeed be the key demographic group with both the interest and liquidity to spend on higher-priced food options.

It is my hope that marketers and new market entrants will have the vision needed to activate the clear and present opportunities among the Baby Dankai. Despite the shrinkage of the younger population creating frightening (albeit overblown) narratives of a shrinking consumer market in Japan, my favourite generation will pay proven stable returns well into the future to those who know how to please them.

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