Weak yen. Most tech products aren’t manufactured in Japan anymore and have to be imported.
In terms of Sony(one example), they reduce prices outside of Japan to compete internationally. At home it’s the “regular” price.
It’s a combination of many things:
* Captive market with few players. In places like the US there’s intense competition between retailers, wholesalers, etc. for your dollar — but in Japan there’s simply fewer players in the market so there’s less incentive for them to truly compete * Foreign exchange risk. Importers totally “pad” their prices to account for USD/JPY fluctuations. They effectively get paid in JPY but must pay in USD, often 3-6 months in advance, which is very risky for them if the JPY devalues in the meantime. * Lax anti-trust enforcement. Many importers/wholesalers here have “near monopoly” for certain product categories. E.g., some PC components have been effectively controlled by a single importer for many years. For various reasons, the government prefers to keep the “status quo” in the market vs. rocking the boat. * Higher servicing costs. I don’t have solid data on this but I’ve heard that Japanese consumers tend to have high quality expectations which leads to higher support and servicing costs. E.g., often products with very minor blemishes that would go unnoticed elsewhere will be returned for exchange or refund in Japan. Likewise there may be higher warranty claims in Japan vs. elsewhere.
With which country you’re comparing?
On the up side, l find used tech products far cheaper in Japan than in other countries I’ve tried buying in. People don’t seem to realize things can be repaired and just dump them.
6 comments
Weak yen. Most tech products aren’t manufactured in Japan anymore and have to be imported.
In terms of Sony(one example), they reduce prices outside of Japan to compete internationally. At home it’s the “regular” price.
It’s a combination of many things:
* Captive market with few players. In places like the US there’s intense competition between retailers, wholesalers, etc. for your dollar — but in Japan there’s simply fewer players in the market so there’s less incentive for them to truly compete
* Foreign exchange risk. Importers totally “pad” their prices to account for USD/JPY fluctuations. They effectively get paid in JPY but must pay in USD, often 3-6 months in advance, which is very risky for them if the JPY devalues in the meantime.
* Lax anti-trust enforcement. Many importers/wholesalers here have “near monopoly” for certain product categories. E.g., some PC components have been effectively controlled by a single importer for many years. For various reasons, the government prefers to keep the “status quo” in the market vs. rocking the boat.
* Higher servicing costs. I don’t have solid data on this but I’ve heard that Japanese consumers tend to have high quality expectations which leads to higher support and servicing costs. E.g., often products with very minor blemishes that would go unnoticed elsewhere will be returned for exchange or refund in Japan. Likewise there may be higher warranty claims in Japan vs. elsewhere.
With which country you’re comparing?
On the up side, l find used tech products far cheaper in Japan than in other countries I’ve tried buying in. People don’t seem to realize things can be repaired and just dump them.
Because it doesn’t explode like in China