Annual Issued Value of Points and Mileage in Japan: Estimated to be Greater than ¥660
Billion in 2006 and Expected to Exceed ¥780 Billion in 2012
Billion in 2006 and Expected to Exceed ¥780 Billion in 2012
March 13, 2008
Nomura Research Institute, Ltd.
Nomura Research Institute, Ltd.
Nomura Research Institute, Ltd. (NRI: Tokyo, Japan; Akihisa Fujinuma, President, CEO & COO) has estimated the monetary value of the mileage and points issued in FY 2006 by top companies in terms of sales (limited to those offering point or mileage programs) in nine Japanese industries. These projections revealed that the total Issued Value has at least reached around ¥660 billion in FY 2006. The forecast for annual Issued Value also indicates that such value will expand, and will exceed ¥780 billion in FY 2012.
Projections for the Issued Value of points and mileage by nine Japanese industries (FY 2006)| Industry*1 | Basic index and value | Point application rate*2 |
Point redemption rate (%, yen/mile)*3 |
Annual Issued Value (¥ million)*4 |
|
| Basic index | Value | ||||
| Mass home electronics retailers (top 10 companies) |
Total sales (¥ million) |
4,149,274 | 75% | 6.5% | 201,759 |
| Credit cards (whole industry) |
Amount used for shopping (¥ million) |
32,170,100 | 100% | 0.5% | 160,851 |
| Mobile phone carriers (top 3 companies) |
Total sales (¥ million) |
8,483,146 | 100% | 1.3% | 108,543 |
| Airlines (top 2 companies) |
Revenue passenger miles (1,000 person miles)*5 |
97,240,887 | 50% | ¥1.5/mile | 72,931 |
| Oil (major 3 companies) |
Total sales (¥ million) |
11,689,117 | 40% | 1.3% | 61,711 |
| General merchandise stores (top 5 companies) |
Total sales (¥ million) |
8,594,207 | 50% | 0.5% | 21,486 |
| Department stores (top 10 companies) |
Total sales (¥ million) |
5,760,457 | 50% | 1.0% | 28,802 |
| Convenience stores (major 3 companies) |
Total sales (¥ million) |
3,364,732 | 15% | 1.0% | 5,047 |
| Drugstores (top 5 companies) |
Total sales (¥ million) |
861,684 | 50% | 1.0% | 4,308 |
| Total value*6 | 665,438 | ||||
| *1: | Companies not offering point service programs are excluded. |
| *2: | This rate refers to the percentage of use of point service programs provided by each company. The percentage is set at 5-percent increments based on the results of the Internet-based NRI survey of 3,000 persons conducted in April 2005 and various kinds of publicly available information. |
| *3: | Based on various kinds of publicly available information, the lowest value was adopted as the industry standard value. For airlines, the rate of ¥1.5 per mile was adopted. |
| *4: | Point and mileage Issued Value = Value of basic index × point application rate × point redemption rate |
| *5: | Calculated by multiplying the number of revenue passengers by flight distance. |
| *6: | This projection covers points and mileage that are issued when products are purchased. Those that are issued in the forms of coupons and stickers (or stamps) and electronic money are not included. |
It is highly likely that points worth more than ¥660 billion were actually issued in FY 2006. The reason is that, in addition to the points issued in accordance with purchase prices, points are sometimes provided at occasions such as campaigns and are not dependent on prices, and that the point redemption rate differs depending on given conditions (high redemption rates are offered to VIP members, for specific products, etc.).
Forecast for Annual Issued Value of Points and Mileage in Japan
The primary factor behind the forecast for the expansion of the annual Issued Value of points and mileage in the future is the spread of point and mileage programs offered by companies that provide services closely connected to everyday life and that have a large customer base such as WAON points by the Aeon Group and nanaco points by Seven & i Holdings that started in 2007. By looking at the evolution of these companies’ services, companies that give expectation to point programs as a means of attracting customers and those considering that customers are highly conscious of point ownership will start offering point or mileage programs in the future.
NRI has today published our proposals concerning "business currencies" (points, mileage, electronic money) including these projections in a book entitled Kigyo tsuka maketingu (Enterprise Currency Marketing) by Toyo Keizai Inc. NRI will continue to conduct research and analyses on the trends of business currencies and publish our proposals on the direction of new business.
* In the news release published on August 16, 2006, we estimated the Issued Value of "business currencies" in nine Japanese major industries for FY 2005 at ¥451,972 million. This estimate has been updated for FY 2006, and the methods used to set the point redemption rate were changed to better reflect the actual situation.
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No reproduction or republication without written permission.
No reproduction or republication without written permission.