Japan electrical sales stimulated by Government Eco points system

26 June 2009
Japan, Retail Services 

The Eco point system was announced by the Japanese government on 10th April and began operation on 15th May 2009. The Eco point system has 3 principal targets: To accelerate high energy saving products, expand the spread of Digital Terrestrial TV and stimulate the economy. The intended categories are FTV, refrigerators and air conditioners.

Eco points are granted by the government, and a point can be charged to various products from gift cards, regional specialty products to train passes. The number of points consumers can receive depends on the product, the average is 10% of the sales price for FTV and 5% of the sales price for refrigerators and air conditioners.

Unit % of intended product FTV Prior to the announcement on the 10th April, YTD growth was +31% in terms of volume and +15% in value in the FTV sector.

In the period from the announcement to immediately before the operation commencing (10th April to 14th May, 5 weeks), consumers held off on purchasing. For the five week total after the 15th May, FTV showed strong growth of +43% in volume and +27% growth in value.

In terms of both the spread of digital TV and the contra cyclical policy, the Eco point system made an encouraging start. Most FTV models already meet the criteria for eco points so they can therefore, be considered a ‘government discount’.

Unit % of intended model Fridge Immediately after the implementation of the system, refrigerators exhibited high growth. Although sales in terms of volume demonstrated limited growth, value growth rose +23% after the 15th May. This trend shows that consumers clearly select the eco point intended models.

Eco point intended models have experienced slight increases prior to the announcement due to the increase in environmentally conscious consumers. In terms of the unit share, intended models greatly increased after 15th May. After the operations began, the average sales price increased to approximately 95,000 JPY, from 76,000 JPY.

Unit % of intended model AirCon Despite high unit increases just after the eco point system started, growth became limited two weeks later. The highest sales season of air conditioners is July, so it may be difficult to judge the impact of the system until this time.

Even acknowledging July as the highest sales season, intended models still increased after 15th May. The price gap between intended models and non-intended models was 40,000 JPY – 50,000 JPY in standard models. In such products, only 9,000 eco points will be granted. As a result it is not easy to switch to intended models just because of the eco points.

Retailers should push the consumers from the ‘total energy-saving’ point of view, including lower monthly electricity charges.