Raw Japan

Slices of Japanese business, politics and life

Disengaged on rings

June 15, 2009

Six years ago when I decided to propose to my Japanese wife-to-be I went to the main jewellery strip in the Ginza district of Tokyo ready to part with two months’ salary for a diamond ring.

The two-month rule was in my head from my years of growing up in the United States where men are conditioned into thinking that this is the price for locking in your lifetime partner.

LUXURY-SUMMIT/RINGIf only I knew then what I know now.

The fact is in Japan you can get away with spending a lot lessĀ - or with not buying an engagementĀ ring at all.

Diamond producer De Beers is widely credited with creating the two-month tradition with its famous “A Diamond is Forever” campaign that began back in 1947.

After a few decades persuading men in America to buy diamonds, it set its sights on Japan.

In 1977, De Beers first aired a commercial telling Japanese men they should drop the equivalent of three months salary — and the suggestion didn’t seem so outrageous at the time with the country enjoying a historic economic boom.

It played the commercial in movie theatres before the movies, aiming to catch couples on dates.

Then the bubble popped in the early 1990s and Japanese salarymen started to be more careful with their hard-earned yen.

Industry data shows that Japanese men who buy diamond engagement rings now spend about $3,000 on average, down about a quarter from 15 years ago. And only about half of them are buying rings at all, down from nearly 80 percent.

In addition to simple economics, experts say the drop-off reflects changing views on courtship and marriage.

Traditionally, Japanese families have exchanged gifts to commemorate a marriage, with the ring sometimes part of the package offered from the groom. Nowadays, a marriage is more likely to be about two people and what they can afford on their own.

The trend underscores the challenges facing Tiffany and other Western brands trying to profit in a shrinking market. But it is also an opportunity for new market entrants like GNH, which is trying to undercut bigger brands by selling rings online, similar to Blue Nile in the U.S.

“There is no doubt the market will get even smaller,” Hiroyuki Watanabe, the head of GNH, told me. Watanabe said his business was still at an early stage.

“I’m not in the red, but I’m not making money either. I’m just getting started.”

Photo credit: REUTERS/Yuriko Nakao

Comments

As a woman, I would like to see people reevaluate the notion that a man should spend x amount of dollars on a diamond engagement ring. As Nathan explains, this ‘expectation’ has been drilled in to people’s heads by DeBeers for decades, and it’s nothing short of a genius marketing campaign. These are new economic times and people aren’t so willing to lay out cold, hard cash for something that’s essentially useless. Skip the diamond engagement ring and elaborate wedding, and save your money toward a home, travel, future retirement. You’ll be glad you did.

Posted by Lara | Report as abusive
 

I spent three months salary on my wife’s ring. She said it was the going rate, having been brought up in the bubble economy. It was a very tight squeeze and there have been many times since when the cash would have been more useful. However, if she ever complains about meanness, all I have to do is to point to her ring finger.

Posted by RMilner | Report as abusive
 

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •