00:03Japanese eyeglasses maker Jinz has built a national brand on its quick, affordable and all-inclusive services.
00:10Founded at the onset of deep deflation more than two decades ago,
00:14Jinz now faces a dilemma many Japanese businesses are grappling with for the first time.
00:20Sustained inflation.
00:21As prices rise across the economy, Jinz has embarked on a delicate repositioning
00:26to capture shoppers as they become used to paying more for features and designs beyond the basics.
00:32At its recently opened Jinza store, the company tested the upper limits of what Japanese consumers will tolerate.
00:3990,000 yen limited edition frames or around $560.
00:43A six-month supply sold out in two.
00:47People often talk about a polarization of customers, but I don't think it's a polarization.
00:52I think it's becoming multipolar.
00:55So while there are still differences in high and low incomes,
00:59I feel that more than that, it's becoming clearer where exactly people find value in a product or brand and
01:05why they buy it.
01:06Its multi-level Shinjuku store with its own cafe is another sign of the brand's evolution
01:11from typically unassuming locations in train stations and local shopping centers.
01:16The strategic shift to capture demand across a wide range of price points still comes with risk.
01:20Real wages in Japan still lag behind price gains.
01:24And many local shoppers are still cost sensitive after decades of stagnation.
01:29The cost of living, the rise in the price level over the past five years has been very significant.
01:35So I think even with inflation slowing at the margin, even with the government subsidies suppressing prices,
01:41households feel like the cost of living has gotten significantly higher.
01:45And I think there's still a lot of dissatisfaction around that.
01:49But for Jin's, the CEO says the key is figuring out how to create value that customers can well see.
01:58So back in the day, the only things that had value were expensive things.
02:02But we've managed to imbue these products with value, even without a high price tag.
02:07I think that represents a democratization of value.
02:11That's why these kinds of products sell.
02:13So far, it seems to be working.
02:15The company is posting record profit in sales and customers appear to be willing to pay more for its frames
02:21and lenses.
02:22Now Jin's is setting its sights on expansion, with American customers its top priority.
02:29After all, the U.S. is the world's second largest market.
02:32I believe that succeeding in the U.S. will change the way investors view Jin's.
02:37And there's that desire to grow into a global brand, isn't there?
02:40Other Japanese companies such as Daiso and Uniqlo have also been able to raise prices,
02:45while others have stuck to the cheaper is better model.
02:47It remains to be seen how sustained inflation will be and how much consumers will tolerate.
02:52But for now, what's clear is that price rises are changing behavior on both sides of the checkout counter.
02:59Reid Stevenson, Bloomberg, Tokyo.
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