Subscriptions – products and services that consumers access by paying regular, fixed fees – have become a common part of our daily lives and are now available from a wide variety of businesses. Consequently, the subscription market has been expanding in recent years and is likely to continue growing.

In this article, we’ll explore the subscription market in Japan, including popular subscription services and the future of the industry.

What's in this article

• Market size of business to consumer (B2C) subscription services in Japan
  
• Consumer awareness of subscription services in Japan
  
• The most popular subscription services
  
• Finalists and winner of the top prize at the Japan Subscription Business Awards 2024
  
• Future prospects for the subscription market
  
• Subscription market size frequently asked questions (FAQs)
  
• Subscriptions keep up with current trends
  

Market size of business to consumer (B2C) subscription services in Japan

The subscription market in Japan began to expand in the mid-2010s, centred on the content distribution industry, particularly video streaming. The major video distribution service company Netflix, for instance, expanded its streaming business to Japan back in 2015. In addition to content distribution, subscription services for things such as meal kits and home appliances have also become widespread, and multiple other industries are now showing interest in the subscription market.

In 2019, the word “sabusuku” (a shortened form of “subscription” in Japanese) earned a nomination for “Word of the Year”, showing that subscription businesses were already well known at this time.

A 2023 survey conducted by the Yano Research Institute Ltd. covering seven key industries found that the size of the B2C subscription service market in Japan was approximately ¥896.5 billion in 2022. This marked a compound annual growth rate (CAGR) of 13.8% when compared to the market size in 2021, which was ¥787.5 billion. This year-over-year increase shows that the market was becoming increasingly active. The company’s data also suggests that the market is likely to continue its growth.

Background and reasons for market growth

The rapid growth of the subscription market in Japan in recent years is likely to be due to consumers spending more time at home, which started in 2020 due to the coronavirus pandemic. People who used to shop in physical stores started to avoid going out, both for personal and professional reasons, in order to practise social distancing.

The continued increase in the amount of time spent at home has led to the spread of a wide range of highly convenient in-home services – such as subscription-based food delivery and music and video streaming. These services have contributed to the expansion of the subscription market.

In addition, many people’s outlooks and values have changed since experiencing different ways of working and living during the coronavirus pandemic. This is also one of the reasons the subscription market is expanding. These days, more people are valuing experiences, and personal enrichment and growth over material wealth. This makes subscriptions – which allow consumers to access products and services such as e-books or gym memberships by paying a fixed monthly fee – a natural choice.

In general, the growth of subscriptions is not just attributable to the consumer’s need for convenience, but also the desire to live a happy, fulfilling life without accumulating material possessions. The subscription market in Japan is currently seeing a diversification of services that specialise in providing experiences as opposed to physical objects, and many expect the subscription market to continue expanding.

Consumer awareness of subscription services in Japan

A survey about subscriptions published by J.D. Power Japan in December 2023 showed that 86% of respondents were aware of at least one of the subscription services that the company presented to them, with younger generations having the greatest awareness.

J.D. Power Japan’s survey also showed that respondents had the highest awareness of video distribution out of all the possible subscription options, followed by music distribution, and then e-books, and it appears that most respondents equated “subscription services” with streaming specifically. In addition, the company’s survey showed that men were more aware of car and video game subscription services, while women were more aware of fashion, beauty and cosmetics, food, and baby product subscription services.

The most popular subscription services

In a subscription-focused survey conducted by MyVoice Communications, Inc. in 2024, with a sample size of approximately 9,600 people, streaming services ranked highly among respondents in terms of both service awareness and usage. Of the respondents who said they had used flat-rate subscription services in the last year, 76.5% used video distribution (e.g. Netflix or Hulu). Second most popular was music distribution (19.4%), such as Spotify or Apple Music, and third place was e-books, magazines, and comics (11.3%).

With streaming, users can enjoy as much content as they like, without any restrictions on the number of times they can watch or listen to it, generally making it one of the most popular types of subscription services.

Finalists and winner of the top prize at the Japan Subscription Business Awards 2024

The Japan Subscription Business Awards (hereafter, referred to as the Subscription Awards), organised by the Japan Subscription Business Association, is an annual award ceremony that recognises the best subscription services in Japan. The Japan Subscription Business Association judges the awards strictly on six criteria: value for money, problem-solving, convenience, novelty, growth potential, and safety.

The 2024 Subscription Awards received a large number of entrants, from startups to major corporations, spanning a wide range of industries. Nine of these businesses became finalists due to their potential to bring about positive change in people’s lives, as well as for their convenience.

List of companies that were finalists for the Subscription Awards 2024 (in no particular order)

The winner of the competition’s Grand Prix was the Speak Buddy subscription service from Speak Buddy Co. As to the reasons the company won, the Japan Subscription Business Association noted various excellent aspects of the service, including the fact that it “allows you to have efficient, stress-free English conversations with an AI partner at any time”, that it “makes use of excellent technology, such as voice recognition, conversation AI, and digital voice”, and that it “is available at a low cost”.

Future prospects for the subscription market

As you can see from the list of companies shortlisted for the Subscription Awards 2024, Japanese society values innovative ideas as well as perspectives that are in tune with the everyday concerns and issues of consumers. The wide range of services and products from the finalists also shows that various types of subscriptions are attracting interest regardless of business size, industry, or type of service. And it is likely that the number of companies taking on the challenge of imaginative subscription possibilities will increase in the future.

That said, there are concerns about the use of “dark patterns” in subscription services, which can be detrimental to consumers. An example of these problematic practices are when a business makes a cancellation process unnecessarily complicated or makes information about how to cancel deliberately difficult to find. This is why the entire subscription industry must take the services they provide seriously, and all business owners must ensure that information is as transparent and truthful as possible.

Improving online payment systems for subscription services

When operating a subscription business, it is important to have an online payment system that customers can use to shop seamlessly and with peace of mind. Business owners aiming to start a subscription service business can use Stripe Billing, a specialised continuous payment service, to provide various subscription-related features and functions, such as regular customer billing, multiple supported payment methods, and a deposit management system. Companies can design a subscription plan that meets the needs of their businesses, and streamline and optimise all subscription-related administrative tasks.

Again, many expect the market for subscriptions to continue to grow in the future. Being ready for this, including efficiently managing and improving payment operations, is important to provide quality service to customers with your company’s subscription site.

Subscription market size frequently asked questions (FAQs)

Will the market for fashion subscriptions continue to grow?

People do not usually use fashion subscriptions – which allow customers to rent clothes, accessories, etc. – as much as other subscriptions, such as streaming services.

However, as the idea of not owning or accumulating things becomes more accepted, subscription services that allow customers to use multiple items for a fixed monthly fee are attractive for those seeking a minimalist lifestyle. Fashion subscriptions have many benefits for users, saving space in their wardrobes and allowing them to get their hands on the latest trends and their favourite items without having to go shopping.

With this in mind, yes, there is potential for the fashion subscription market to grow.

What is behind the expansion of the home appliance subscription market?

In recent years, there has been a lot of attention within the lifestyle sector on home appliance subscriptions.

During the coronavirus pandemic, many people avoided shopping in physical stores. This accelerated the spread of e-commerce sites, including those offering subscription services.
As a result, consumers began switching to subscription services that allowed them to rent items, including home appliances, instead of buying them from brick-and-mortar locations.

Home appliance subscriptions have remained popular even though the pandemic has subsided. And one of the reasons for their continued success is likely that the consumer has the ability to buy the product after using it.

Which companies are famous for subscriptions?

Generally, the most successful subscription services are from major companies in the streaming industry. Some of these companies include Amazon Prime, Netflix, and Hulu for video streaming, and Spotify and Apple Music for music streaming. However, there are also numerous success stories of subscriptions in other fields, such as food and drink, and educational toys for children.

The reason subscription services are successful

The market for subscription services has expanded in line with the development of the internet and logistics, and has also been affected by changes in people’s living environments and economic conditions.

As mentioned previously, one of the reasons subscriptions have grown is that they have increasingly provided services that match people’s attitudes and values, such as the desire to use items without owning them. In this sense, the subscription business model is highly representative of the needs of the modern era.