The Cost of Low Cost in Japan

With a population of over 12 million, a negative birth rate, a low unemployment rate and a high average monthly salary, there are millions of Tokyoites ready to spend a lot on themselves! Tokyo has some of the most demanding customers in the world. Accustomed to the highest of product standards, quotidian items, such as toilets, are even available at first-rate prices. That said, low-cost items in Japan are rarely more affordable.

When I asked my husband-- who grew up celebrating his childhood birthdays at the American hamburger fast food chain Wendy’s, in Tokyo-- what he wanted for his 38^th birthday, the answer was simple. In 2009, Wendy’s closed its 71 stores and reopened two years later with a new concept store called "Japan Premium," on Omotesando. Wendy’s Japan Premium serves burgers (foie gras, truffle mushroom and wasabi avocado, to name a few) for six times the price of a regular one. And Wendy’s is now planning on opening 100 of these special-edition stores in Tokyo over the next five years. Successful low-cost brands as a result are being forced to make specific ‘only sold in Japan’ premium goods to appeal to the Japanese market. Domino Pizza's $50 premium Camembert Mille-Feuille pizza is just one of many examples.

Japanese men and women alike will splurge when it comes to designer handbags. Handbags define the Japanese consumer, placing him or her in social stratosphere the way a car would for a driver in California. Japan also has extremely high import taxes on foreign goods, especially when it comes to leather. Second-hand stores, like Wonder Rex and 2nd Street Shop, that sell cheap furniture and clothes will have glass counters selling second-hand designer items in excellent condition. Don’t be fooled, however. The décor might be less than glamorous, but the prices are not.