Source: Brocade
Author: Yaohua

As the first important theme, our research focuses on: Self-pleasure.

This is not a popular term that has come out of nowhere. In the Japanese Consumer market over the past 30 years and in the Chinese Consumer market after 2020, the meaning and weight of the term 'self-pleasure' in the Consumer sector have been increasingly profound and significant, becoming a keyword of the Fifth Consumer Era.

In this era, comparing the causes and characteristics of self-pleasure in the Consumer markets of China and Japan, clarifying the insights that self-pleasure consumption brings to enterprises, is particularly important.

1. Two meanings of self-pleasure consumption.

We also need to start from the definition of self-pleasure consumption.

According to the 'Gen Z Consumption Trend Analysis Report', tweets about 'self-pleasure' on mainstream content platforms such as Weibo, Xiaohongshu, and Douyin have increased by 74% year-on-year. 'Self-pleasure' has become an important label influencing Gen Z consumption.

Of course, for many people born before 1985, there might be a similar confusion: the concept of self-pleasure seems a bit inexplicable.

In most past contextual descriptions, the context of self-pleasure often had a clear opposite, which was investing wealth and time in oneself rather than externally: for example, in order to flatter leaders or clients with gifts, it might be a thankless task, and it would be better to save that effort to improve one's own abilities.

However, in recent years, affordable products can somewhat replace the term self-pleasure: for instance, purchasing traditional brand cars that have a stronger sense of class identity, even though their functionality is not as good as affordable domestically-produced Electric Vehicles, sacrificing inner substance for outer 'face' is not worth it.

From a certain perspective, the logic of the latter seems hard to scrutinize, because the relationship between pleasing others and self-pleasure is always a bit ambiguous.

For Luxury Goods, in the eyes of some, they are merely a means to showcase status and identity, an expression of pleasing others. But if I genuinely love the texture and design of a particular Luxury Good, and purchasing it satisfies me, is that not self-pleasure?

Similarly, normally lipsticks are regarded as lower-tier substitutes for Cosmetic products; I buy lipstick and feel happy applying it, but in reality, enhancing appearance with lipstick is something that others notice, so does that count as pleasing others or self-pleasure?

With this question in mind, I try to seek answers from the expressions of two consumption masters, one is Miura Noboru, and the other is Xiaohongshu, which is also considered a 'consumption master' but more uniquely Chinese.

From Miura's perspective, the self-indulgent consumption in Japan reflects a "re-life" phenomenon: Japanese society has never desired authenticity as much as it does today, rather than an illusory magical expansion. Therefore, self-indulgence has become the most direct and genuine consumption behavior.

From the perspective of Japanese society, the definition of self-indulgent consumption is authenticity. And the definition of authenticity is that it possesses practical value, and only products that can genuinely change life are considered self-indulgent.

In the "self-indulgent" tag on Xiaohongshu, we received similar yet distinct answers.

Most bloggers express that the opposite of the "self-indulgent" tag is not entirely "illusory, inflated," but rather more of an emotional expression, such as against internal consumption, satisfaction, personalization, and learning to say no.

Clearly, the self-indulgent consumption in China and Japan has similarities but is not completely aligned. The commonalities emphasize authenticity and personal experiences of self-satisfaction, such as the self-indulgent lifestyle guide on the far right which involves trying something hands-on); the differences lie in the fact that the "Xiaohongshu" version of self-indulgence is more inclusive, allowing for a slightly more abstract form of consumption (such as exquisite literature, Goods Economy, etc.) to also be considered self-indulgent consumption.

Therefore, we believe that "self-indulgent consumption" has both narrow and broad meanings.

1) In a narrow sense, self-indulgent consumption is akin to what Miura says about pursuing a sense of authenticity, where all illusions, bubbles, and yearnings for the future stand in opposition, and satisfying one's concrete experiences is paramount.

2) In a broad sense, self-indulgent consumption, while pursuing authenticity, includes any expenditure that contributes to positive emotional feedback as self-indulgent consumption.

If the ultimate question we consider is the fifth consumer era, then the implications of self-indulgent consumption for businesses and investments must be explored. We need to get to the root causes of the two versions of self-indulgent consumption to find appropriate solutions.

2. The driving internal factors of self-indulgent consumption.

If we consider the implications of self-indulgent consumption for businesses and investments, it is essential to explore the root causes of the two versions of self-indulgent consumption to find appropriate solutions.

First, let's discuss the internal factors that led to the formation of self-indulgent consumption in Japan from Miura's perspective.

We must continue the thought process of generational development of consumption — Japanese sociologist Masataka Senda divides post-war Japanese society into the "ideal era," "dream era," and "fictional era," which respectively correspond to the first to third consumer eras described by Miura.

The transition from the "fictional era" to the "magical era" signifies the switch between the third and fourth consumer eras.

The so-called "magic" actually refers to informatization. After the Hanshin earthquake, Japan's society was rapidly entering a high-speed transition period from material to information. For young people in the information age, not having a car is acceptable, not having material possessions is also acceptable, but not having a virtual world and social networking is unacceptable.

These seemingly cool digital products and high-tech applications are like magic to the relatively conservative Japanese society.

According to Miura's deconstruction, in the late pandemic period, Japanese society gradually entered the Fifth Consumer Era. The corresponding era of "magic" is actually the "re-living era," also known as the "real era."

Of course, similar to the transition between the Third and Fourth Consumer Eras, the Fifth Consumer Era is also driven by key events: one is the aftershock of the Fukushima earthquake, and the other is the outbreak of the pandemic. These two seemingly incidental events have profoundly influenced the thinking patterns of Japanese society.

To quote Miura's original words:

"Many people find that they have no right to know about many significant negative events, and thus entrust their lives and even their existence to others. People begin to question such a life, and they hope to take control of their own lives."

Never has there been an era like today where people crave authenticity. What people desire is life, not magic. Every action reflects real life, people create genuine items, and experience life through real actions, feeling the charm of true life.

From this, we can see that the feelings of distrust towards others and pessimism about the future are the internal causes for Japan's pursuit of authenticity and the emergence of the self-indulgent consumption culture.

Next, let's discuss how the internal causes of self-indulgent consumption differ from a domestic perspective at this stage.

To some extent, our culture of self-indulgence is also a product of the burst of an inflated bubble. However, compared to Japan's consumption bubble, we haven't experienced a long-term consumption bubble but rather a 'expectation' bubble that has burst.

For example, in traditional social cognition, factors such as employment, housing, marriage, and parenting are central to shaping an individual's social value. However, with the rapid development over the past few decades, the driving force has gradually become the pressure that is difficult to achieve in real society, moving away from what normal people's short-term purchasing power can support.

Therefore, our self-indulgent consumption does not carry the transitional pessimism about life and death that is common in Japan.

Of course, some may believe that this is simply because our economic environment is significantly better than Japan during its depression, or that our population structure has not yet fully entered a similar aging society as Japan. Thus, the current differences are merely temporal, and future consumption development will follow the trajectory of the Japanese consumption market.

However, we do not think so; Japan's pessimism is largely rooted in its national history.

As an island nation with limited resources, Japan is filled with a culture of 'mono no aware'. They are consumed by a longing for eternity, symbolized by the emperor, who has become a symbol for the Japanese people to mark their era, but this is inevitably unattainable.

Whether it is in Yasunari Kawabata's notion that 'sadness and beauty are interconnected', or in Osamu Dazai's words 'Being human, I am very sorry', these are poignant expressions of Japan's extreme mononoaware and pessimism.

In contrast, our cultural atmosphere is completely different. As a civilization that has continued the ancient culture, our way of thinking always comes with a broader perspective and a longer time frame. Even when facing setbacks, we can casually say, 'At worst, we’ll just start over.'

From the perspective of economic motivation, we and Japan are in the transition from the fourth consumption era to the fifth consumption era. As a result, self-pleasure has become a core term in the consumer market. However, the underlying cultural differences between the two countries ensure that we will not replicate Japan's consumption philosophy one-to-one.

Thus, starting from the perspective of the fifth consumption era, it is not enough to simply copy Japan's self-pleasing consumption model; we must also take into account the differences. So, specifically in terms of the consumer market, where are these differences?

3. The Revelation of Self-Pleasing Consumption between China and Japan

With this in mind, we can finally briefly answer how we should understand self-pleasing consumption in the context of the fifth consumption era and where the opportunities lie.

First of all, traditional everyday consumer goods in both our country and Japan are recognized for their practicality and penalize nihilism. This is the overarching background of the fifth consumption era, and self-pleasing consumption is no exception.

From purchasing nearly 70% of the Global Luxury Goods market, with logos plastered all over streets and alleys, to the rise of Fast Retailing and MUJI, the practicality of Japanese Consumer behavior has intensified. The 2023 social survey by Miura revealed that in recent years, the practicality in Japanese consumption has further increased, with a 20.7% growth in consumer preference, ranking first.

In the past two years, we have also experienced a shift towards practical consumption, with budget alternatives becoming the most popular consumer label. The essence of oversupply and channel competition is the practical consumerism on the demand side.

Corresponding to this, the previously hot new consumption trend has gradually receded, and the nihilistic symbolism has temporarily withdrawn from the consumer market. Even brands that expanded through the new consumption wave (such as new tea drinks) are launching Lightweight budget products to meet the most basic needs of the public.

In this fifth era of consumption, for the vast majority of consumer goods, pragmatism is the most typical label.

Furthermore, whether the internal factors driving self-satisfying consumption are the pursuit of authenticity or the rebellious spirit of escaping social pressure, there will always be a demand for immediate feedback, and leverage consumption will worsen.

After the Fukushima earthquake, the immediate demand in the Japanese consumer market significantly increased. Most businesses and individuals are not telling long-term stories, just like in Japan's Asia Vets market. Analysts can identify various reasons for the lagging performance of Japan's Electric Vehicles, but they always overlook one point: Japanese consumers are unwilling to trust the future technological commitments of companies, such as how many Charging Stations or Software updates will be built.

The domestic consumer market is likewise not accepting superficial promises as the core of self-indulgence. Labels such as brave people enjoying the world first or that spending money leads to making money are actually reflections of the immediacy of consumption.

Of course, our tolerance for long-termism is far higher than in Japan; otherwise, Electric Vehicles wouldn't be creating miracles. It's like the confusion experienced by childhood and old age in Shi Tiesheng's writings about the future: the former is confused about an uncertain future, while the latter is unsure about accepting a singular path, yet those who cannot see the future have, in fact, already glimpsed it.

So, is there a specific indicator to understand this immediacy? In our view, all consumption with 'leverage' characteristics will increasingly deteriorate.

This 'leverage' does not refer to absolute loans, but rather to spending beyond purchasing power, such as spending 90% of one's salary on consumer electronics; while this does not involve borrowing, it affects daily life and counts as leverage.

Such prepayment of future consumption will become less frequent, and startup consumer enterprises should also avoid creating such products.

Again, the biggest misconception about self-indulgent consumption at the current stage is that affordability equals self-indulgence.

The inherent impression that affordability equals self-indulgence is primarily due to the pragmatic nature of the self-indulgence label. However, the core of pragmatism is not merely affordability, but the ability to meet long-tail demand.

This has often been considered a typical Japanese enterprise that has benefited from the affordable dividend. $Fast Retailing (9983.JP)$ In fact, it is not so. The growth rate of household consumption in Japan did not show significant negative growth until the mid-1990s. Fast Retailing opened its first store in 1984 and was already listed by 1994, not simply because of absolute low prices.

As Yanai expresses in his book 'One Win, Nine Losses,' Fast Retailing's focus on leisurewear is because there was a lack of supply for men in their twenties apart from suits. Leisurewear not only meets this demand but also has high turnover characteristics, which leads to success. It's not merely a simple statement about low prices that covers the ingenuity involved.

Another typical example is the transformation from Japan's 'Huaqiangbei' to a two-dimensional paradise, Akihabara, which has become a typical label of the fifth consumption era. To use a phrase from a fan on Hupu, Akihabara's success does not rely on absolute low prices, but on extremely rich product supply.

Therefore, what businesses need to do is actually seek to satisfy the needs of most users through price discovery while meeting emotional value.

For example, we have always believed that,$PDD Holdings (PDD.US)$Success is not only due to Low Stock Price, but more so by breaking down demand to satisfy more Consumers, thereby achieving more trade; Low Stock Price is merely a result of price discovery.

Take the example of needing a size S wrench to repair a computer; usually, one would need to buy a complete toolset for a single repair. Can you say a 19.9 yuan toolbox isn't affordable? But your actual need is just to have someone sell you a wrench for 1.99 yuan, and PDD Holdings has achieved this.

Another example is that many people think the fourth and fifth Consumer eras find it hard to carve out new paths. However, Luckin Coffee can drive market growth through its 9.9 yuan pricing. The core logic is that Luckin matches the most essential need for coffee—caffeine—through a lower price, instead of providing a quiet working environment.

There are countless such examples today; Xiaohongshu's practical silent dress shoes and Mi Xue Bing Cheng's affordable dopamine supply have both shaped a commercial myth.

Lastly, Consumption that delights oneself emphasizes being small and beautiful rather than large and complete; small refers to brands being sufficiently niche, while beautiful refers to meeting consumers' emotional values.

The mainstream narrative of Japan's manufacturing industry over the past twenty years is small yet exquisite, revolving around product sophistication and miniaturization, but Japanese enterprises have always pursued being large and complete.

From Consumer Electronics to chemicals and pharmaceuticals, and then to emerging media and cultural industries, any well-known Japanese enterprise is always pursuing industrial integration and corporate diversification, with cases of beverage companies investing in pharmaceuticals and pharmaceutical companies investing in Semiconductors being plentiful (for example, the Japan Automobile Alliance,$Sony Group (6758.JP)$Acquisition of Columbia Pictures and so forth).

The narrative logic of being large and comprehensive is actually a brand value of symbolism from an era of supply scarcity, leveraging the image of a large enterprise to endorse products. At that time, consumers did not have high professional needs, so they often relied on large companies for product selection.

However, in recent years, Japanese companies have narrowed their investment scope and returned to their core lines (for example, the previously discussed Sanrio and$Suntory Beverage & Food (2587.JP)$), because the majority of consumers no longer trust symbolism, but instead have basic product discernment abilities.

Looking at the domestic scene in recent years, the brands that have gone viral are $Lululemon Athletica (LULU.US)$ To $POP MART (09992.HK)$ There is a common characteristic where products and users are relatively focused on a specific track, deepening their expertise in the industries they excel in.

The concept of emotional value is relatively abstract, but we summarize two main categories that intuitively hit the core elements of emotion: transparency and low profile.

Transparency corresponds to the sense of authenticity consumers crave in the fifth consumer era. A typical example is the case of Fat Donglai, which has formed emotional resonance with consumers through overwhelming employee care, and once again broken through with transparent price tags.

It is possible that what Fat Donglai sells is not considered cheap, but the transparency of the pricing system means that the choice of consumption is entirely handed over to the consumers, once again satisfying the emotional value.

A low-profile approach corresponds to the old adage of product logic—never educate the Consumer. Products with a high learning cost simply cannot be sold; instead, products that cater to individual emotions provide enough emotional value to consumers.

POP MART is a perfect example of a brand that is sufficiently niche and has a high emotional value. Most of POP MART's products do not express emotions (refer to Molly, the designer in "Trendy Play: Happiness and Justice", who intentionally flattens the doll's mouth around the edges); when users are happy, the doll they see represents happiness, and when they are worried, the doll symbolizes their worries, which is the lowest-cost emotional resonance.

Looking back, this year, the companies that truly achieved 'small but beautiful' have indeed been rewarded by the market.

4. Conclusion

Lastly, let’s summarize our current basic views on 'Consumer's Joy':

· The definition of Consumer's Joy can be divided into two types: the narrow definition seeks authenticity and a personal touch, while the broad definition includes any consumer behavior that can bring positive emotional feedback.

In the fifth era of consumption, the internal motivations for Consumer's Joy in Japan and China are different. Japan's motivation comes from a long-standing culture of 'mono no aware', which has recently been catalyzed by sporadic events; whereas China’s motivation is a release of social pressure and an expression of dissatisfaction, with the former being more profound and the latter less so.

· For consumer goods merchants, the psychological factors needed to comply with in the fifth era of consumption include: first, pragmatism; second, immediacy without empty promises; third, companies should seek broader supply; and fourth, brands should aim to be 'small but beautiful' rather than large and comprehensive. By adhering to these four points, Consumer's Joy will reward companies in this era.

Of course, as Miura Tatsuya explained in the postscript of the Chinese version of "Lonely Society": over the past thirty years, people have experienced bubbles and disillusionment, seeking a sense of authenticity. If future young people continue to live simply, will they yearn for the lifestyle of the bubble economy period?

It must be pointed out that consumer culture is always changing with the economy, population, and education, and there is no unchanging standard answer, so the above views are for reference only.

Editor/rice