What can we learn from Japan’s lost 30 years?

01 Facts & context

Put the history in context

The phrase “lost 30 years” is commonly used to describe Japan’s prolonged growth challenges after its asset bubble collapsed. It is not a uniform description of every company or customer need. In a February 2025 speech, Bank of Japan Policy Board member Hajime Takata cited the Bank’s 2024 policy review, which linked prolonged mild deflation with insufficient demand and entrenched expectations that wages and prices would not rise easily. Businesses may therefore face changing operating conditions, not merely a weak sales year.

For Chinese brands, the point is not to assume that two markets will follow the same path. Their populations, industries, channels, technologies and institutions differ. One country’s history cannot simply become another’s forecast. A more useful question is: if an established source of growth weakens, for whom do we still create distinctive value?

This article offers a brand-management perspective. The recommendations that follow are GSP editorial analysis, not an explanation of every Japanese company’s success or failure and not a forecast of China’s economic trajectory.

02 GSP analysis

The missing levels between macroeconomic stagnation and business opportunity

The easiest mistake in learning from Japan is to turn a country's long-run statistics into a description of every consumer or every company's future. Aggregate growth, population structure, prices and one firm's revenue sit at different analytical levels. Slow overall growth can coexist with category substitution, channel migration, regional differences and overseas expansion. Even within an industry, contracting volume can coincide with improving operating quality. A historical comparison therefore needs a defined unit of observation: a country, an industry, a customer group or a particular business.

The Bank of Japan's review examines the relationship between prolonged low inflation and behavior. The OECD's 2026 economic survey of Japan considers long-run challenges through working-age population and productivity. Together they suggest that demand constraints and changes in delivery capacity can coexist. A smaller population does not make every service easier to provide: some needs may grow while labor availability or service organization limits supply. These reports should generate questions for category research, rather than be converted directly into a market-size forecast or treated as evidence that a particular brand strategy will succeed.

Consider an illustrative household service. Customer numbers, available time, service frequency and willingness to pay can move in different directions. Fewer households in one area may coexist with greater demand from a particular group for delivery, installation or continuing maintenance. Cutting service solely because population declines may miss this change. Expanding rapidly because one need is growing can instead underestimate recruitment, training and management across locations. Useful analysis connects who needs the service, what they need, who can deliver it and how it will be paid for. Labels such as upgrading or downgrading consumption leave these operating questions unanswered.

Comparisons with other markets must also separate institutions and timing. Financing conditions, labor arrangements, urban density, channels and digital infrastructure differ, changing the resources and returns associated with the same practice. A Japanese brand adopting a low-price or small-store format in one period does not establish that another market is at the same stage. Compare mechanisms: which constraint did the practice address, which resources did it require, which of those resources exist locally, and what evidence would show that the analogy fails? A comparison becomes useful when it can be challenged, not merely when the two markets share a broad description.

A management team can build a table linking macroeconomic hypotheses to observable customer behavior and then to product or process choices. More cautious consumption might mean longer purchase intervals, greater concern about durability, attention to total ownership cost, or simply higher acquisition expense in one channel. Each calls for a different response. Research should identify the corresponding transaction, service or interview evidence and an owner responsible for checking it. Only after this translation does history inform a decision. Otherwise a large narrative can explain both success and failure after the event while offering little guidance about what to do next.

03 GSP analysis

Slower demand calls for closer attention to its structure

When aggregate growth no longer hides weaknesses, it is tempting to describe customers as wanting only lower prices. Yet one person can reduce some spending while paying for greater convenience, dependability or relevance elsewhere. Pressure on total spending can coexist with specific value opportunities. Brands need to understand what customers are reallocating, not only how much less they spend.

Research should move beyond broad demographic profiles into actual tasks: where do people experience friction, which features have become unnecessary, which services remain worth keeping, and what uncertainty prevents a purchase? Within a category, distinguish first purchase, replacement, replenishment and gifting. These different motivations provide a sounder basis for product ranges and price levels.

An opportunity need not mean adding products. Reducing choice overload, explaining specifications or improving repair and replenishment may meet a need better than another product line. Replace “what else can we sell?” with “what else can we help people accomplish?” before allocating resources.

04 GSP analysis

Who pays for service, wages and renewal when prices are under pressure?

Low-price brands often become the most visible examples in discussions of weak growth, but price is an outcome of an operating structure. METI's summary of the 2025 SME white papers discusses labor shortages alongside rising wages and other costs, emphasizing added value, productivity and appropriate cost pass-through. This does not imply that every firm can raise prices successfully. It indicates a boundary to relying exclusively on cost reduction. Treating low price as a self-contained marketing strategy hides the labor, service and renewal expenditure needed to maintain the offer over time.

Pricing capability and value communication interact, but they are not interchangeable. A persuasive story can help customers understand a benefit; it cannot replace performance, dependable delivery or after-sales support. Equally, real capability may not command a corresponding price if purchasing documents and sales conversations fail to explain the difference. Under changing costs, examine which benefits matter, which are actually delivered, which can be demonstrated and how a price change affects total customer cost. Asking only whether people accept a price increase overlooks options involving assortment, service boundaries and how different customers choose between them.

Repair services provide an illustrative case. A firm might hold its headline charge steady while extending waiting times, shrinking the service area or charging separately for essential parts. The customer's total burden may have risen despite an unchanged advertised price. Alternatively, the business could distinguish a clearly defined basic service from a more responsive option, explaining coverage and parts costs. Neither structure is automatically better. Test actual needs and consider waiting, repeated communication and unresolved problems alongside the monetary charge. A useful assessment of value must describe what the customer ultimately receives, not simply compare two prices.

Separate productivity improvement from cutting necessary inputs. Removing duplicate entry, shortening handovers and improving scheduling may release time without weakening the service. Reducing training or maintenance may transfer expense into future rework and complaints. Map the critical service process and identify work that repeatedly consumes resources without helping the customer, then test simplification. Observe first-time resolution, workload, delivery time and customer feedback, rather than only labor minutes per transaction. Optimizing one local measure can make the overall journey slower if it pushes incomplete work onto another team or back onto the customer.

This also changes the meaning of a long-term commitment. Delivering a worthwhile promise requires room to renew capability; it does not require every price and service condition to remain unchanged forever. Explain the benefit and service conditions associated with an adjustment, and allow customers to choose an appropriate option. If an initiative improves the firm's accounts only by creating hidden costs for customers, it is a weak foundation for loyalty. The useful lesson is to study pricing, productivity and relationships together, making clear who bears the consequences of each choice and how that judgment will be checked after implementation.

05 GSP analysis

Make value for money sustainable

Price competition is easy to observe and easy to copy. A company that imitates a low price without the supporting product, supply and operating structure may have to sacrifice delivery quality to sustain it. The more useful question is how a brand consistently provides the value customers consider most important at a price they accept.

In its 2024 business briefing, Fast Retailing described using customer-center input, online product reviews and store feedback to improve products. This offers a concrete point of inquiry: does customer understanding reach product improvement? It is an account of that company’s disclosed process, not proof that one model fits every industry.

First identify the benefits customers will pay for, then examine whether complexity supports them. Distinguish activities customers barely notice but that continually add cost from those that materially affect quality and experience. Efficiency should help deliver the central promise rather than simply push every activity toward its lowest cost.

06 GSP analysis

Make each delivery a reason for the next choice

During expansion, businesses can concentrate on new customers and channels. When new opportunities become scarcer, the quality of existing relationships deserves closer attention. Managing them is not simply increasing contact frequency. It means providing consistent, predictable experiences whenever people use the product, ask a question or need help.

A durable-goods business might recognize future needs through installation, maintenance and repairs. A consumer brand might use feedback to improve flavor, packaging or convenience. A professional-services firm might use follow-up after delivery to understand the client’s next problem. These are illustrative situations, not reported achievements of a Japanese company or GSP client.

When customers return, establish whether the reason is experience, convenience, trust or a temporary price advantage. Different reasons call for different actions. Turning relationships into knowledge the team can understand and act on reduces the pressure to acquire every customer from scratch and repeatedly demonstrates the brand’s promise in everyday life.

07 GSP analysis

Follow customer feedback all the way to a product decision

Fast Retailing's 2024 Ariake Project briefing describes collecting customer views through service contacts, online reviews and store feedback, and incorporating that information into product development and operating systems. It also discusses demand forecasting, production planning and logistics coordination. These are the company's account of its own practices. They illuminate process design but do not independently establish that one system caused growth or loyalty. The useful question is how an observation passes through decisions before it changes a product, rather than simply how much information reaches a dashboard.

The first issue is representation. People leaving reviews may not represent all buyers, and a product with more complaints may simply sell in larger volumes. Examine issue frequency, customer group, use context and sales volume together to distinguish individual preferences from shared difficulties. Service conversations and focused interviews can provide information about customers who do not volunteer comments. Research non-buyers as well: why did the brand fail to enter their consideration set? An organization listening only to its most active supporters can become better at serving an existing audience while remaining unable to explain why new customers leave.

The second issue is decision authority. Service teams identify difficulties; product teams assess materials or design; supply teams assess production implications; stores contribute context about use. If every team submits information but nobody sets priorities, additional data may increase waiting rather than learning. Separate immediate delivery issues, testable product improvements and demand signals that remain uncertain. Give each category an owner and a response route. Not every comment should become a new product, but recurring classes of difficulty should receive an explicit decision instead of circulating indefinitely between departments that each hold only part of the answer.

The third issue is verification after change. Suppose customers find a garment difficult to care for. A team could first establish whether instructions are understandable and which tasks cause difficulty, then decide whether to change information, materials or assortment. Afterward, compare relevant problems in similar use contexts, check for new wearing or maintenance difficulties, and examine production and inventory complexity. This is an illustrative research sequence, not a specific Fast Retailing project disclosed in the source. A higher review score alone cannot distinguish product improvement from a changed customer mix or an incentive to submit favorable reviews.

A smaller business need not begin with a large customer-data platform. It can maintain a problem register for one core category, bring service, product and supply owners together regularly, and record the path from an observed problem to a decision and subsequent check. A small amount of information that changes action may be more useful than extensive collection without ownership. The capability worth sustaining is a repeatable learning process: keep the central brand promise, but allow new customer evidence to change products, channels and working methods. That makes continuity compatible with adaptation rather than treating every revision as abandonment of the long-term strategy.

08 GSP analysis

Long-term thinking requires an organization that renews itself

Long-term thinking can be confused with sticking to an existing plan. Remaining unchanged for too long, however, can distance a business from its customers. A more productive commitment is to remain accountable for core value while allowing products, channels, technology and organizational arrangements to evolve. Decide what deserves continuity and what needs renewal.

Management can put two kinds of work on the agenda together. One protects present delivery through quality, service and customer relationships. The other tests new ways to create value, giving small experiments a defined owner, resources and criteria for evaluation. Each experiment should explain the customer problem it addresses, rather than merely demonstrate a new technology.

Digital investment should follow the same sequence: define an obstacle in decisions or collaboration, then determine how data and tools can address it. Moving an inefficient process onto a screen may add systems without improving learning. An organization that keeps hearing customers, diagnosing problems and improving delivery can turn long-term intent into practice.

09 Suggested actions

Turn the lessons into your own operating questions

Studying Japan should ultimately bring a business back to its own evidence. Choose a core product and customer group, then examine changes in reasons for choosing, complaints, departures and repeat purchases over several buying cycles. Consider sales, prices, channels and service changes together to distinguish growth from external conditions from growth supported by internal capability.

Select an improvement that can be evaluated over a complete business cycle: make value easier to understand, simplify use, improve an important service or shorten the path from customer feedback to a decision. Specify the intended customer, responsible team, deliverable and evidence that would support or challenge the result. Another company’s decades of outcomes are not a set of steps that can be copied immediately.

The useful question is whether the business can continue creating and delivering meaningful value as conditions change. Loyalty growth connects that value to repeated choice, then turns repeated choice into stronger operating and organizational capability.

Learn from the operating questions; test answers in your own business.