Summary of Research Findings

In recent years, the business targeting high-net-worth individuals (HNWIs) or ultra-high-net-worth individuals (UHNWIs) is flourishing. In many cases, the asset possessed by affluent population have multiple income sources that consist of stock dividend, earnings from real estate, etc., in addition to wage income. Rising stock prices since the end of the pandemic are creating favorable opportunities for further asset expansion. The thriving market owes to a growing number of “new HMWIs” prospering from online stock investment or by streaming videos, etc., and to inbound riches showing a major presence by coming back frequently to spend enormously.

The luxury market size (total five categories) geared to HNWIs for 2023 has outperformed that in 2019, before COVID, for most of the categories. The largest growth by category has been achieved by luxury apparel & accessories, with the sales estimated to have reached 1,680,000 million yen, 169% of 2019, contributed by robust consumption by domestic HNWIs and surging inbound demand backed by weak yen.

The domestic luxury market has kept being brisk even after 2024. This largely stems from inbound travelers’ purchase activities. Despite repeated price hikes at many upscale brands, weakened yen still makes them feel inexpensive and has boosted their purchases of high-end products. Meanwhile, domestic wealthy population, too, are lavish in investing in speculative merchandises such as classy watches and costly art (pictures and artworks). Because the more expensive the products are with the expectation of further price hikes by the brand or of rise in value at secondary distribution, the more favorable the sales show, further prosperity is projected for the luxury market.

Noteworthy Topics

Brisk Business by Obtaining New HNWI Customers

New HMWIs are those mainly in their 20s to 40s who themselves have succeeded in building a fortune, mostly by being an entrepreneur, an investor, a YouTuber, or an influencer. They are said to be different from conventional affluent population in earning method, the way of thinking about asset, lifestyle, everything. Their revenues are mostly from work, and those who are not married tend to have freedom to spend at any time they like. Therefore, the efforts on customer retention at companies who provide upmarket services are underway, with the tendency prominent at department stores and auction operators.

Department stores have vamped up their high-unit price gaisho services (door-to-door sales) in service contents and servicing environment directed at new HMWIs. Their urban stores have adopted young gaisho-service personnel in their same ages with the recently increased gaisho-service customers in their 20s to 30s. By placing personnel well versed in fashion trends of similar age as the customers, accurate advice and suggestions to the customers become available. Department stores are striving to cope with each demand by gaisho customers who are becoming multi-layered.

Auction operators have enhanced information delivery by using social media and live streaming at YouTube, which have succeeded in attracting new HMWIs. One of the reasons for auctions paid attention by the new riches is an abundance of items being auctioned that can expect rising values in the future, such as swanky artistic objects (pictures and artworks) and classy watches. Especially, contemporary art intrigues young population, through active collaborations with high-end brands and through strong bonds with street culture.

Research Outline