Dentsu Inc. Conducts "4th Survey on Consumer Awareness Regarding Energy Liberalization"

The text of the Dentsu Inc. news release distributed on January 31 is as follows.

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January 31, 2017

Dentsu Inc. Conducts "4th Survey on Consumer Awareness Regarding Energy Liberalization"

 

・As of last November, 14% of respondents had changed their electricity supplier or rate plan.

・Awareness of residential gas retail liberalization increased to just over 40% compared to the previous survey in June last year. Awareness of the details of residential electricity retail liberalization remained below 30%, the same level as the previous survey.

・Intention to switch gas providers stands at just over 10%. Intention to switch electricity providers has decreased to about 10% compared to the previous survey, likely due to an increase in those who have already switched

・66% expressed the desire to consolidate their electricity and gas purchases with a single provider following gas retail liberalization.

・Many people still feel a lack of understanding or have concerns about changing electricity providers. Those who did not switch lack understanding of basic items.

・Conversely, nearly 70% of those who changed their electricity provider or tariff plan reported being "satisfied with the change." Approximately 40% stated they would "recommend considering a change to others," indicating high satisfaction with switching

・Moving forward, expanding electricity and gas provider switching will likely be effective by dispelling further anxieties about liberalization and widely publicizing the high satisfaction levels of those who switched

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Dentsu Inc. (Headquarters: Minato-ku, Tokyo; President: Toshihiro Yamamoto) has formed the cross-organizational team "DEMS" (Dentsu Energy Market Solutions), bringing together energy professionals. This initiative aims to contribute to the creation of new business opportunities for client companies as the energy industry structure faces its most significant transformation period in history, driven by the full liberalization of electricity retail starting last April and the upcoming full liberalization of gas retail this April. DEMS provides various solutions.

To highlight challenges for future progress, including consumer awareness, understanding, switching intentions, and implementation status related to the April 2015 electricity retail liberalization and the upcoming April 2016 gas retail liberalization, Dentsu conducted its "4th Survey on Consumer Awareness Regarding Energy Liberalization" in November 2015. This survey targeted 5,600 men and women aged 20 to 69 nationwide, seven months after the electricity retail liberalization. This release presents key findings, including comparisons with the results of the 3rd survey (June 2016), 2nd survey (November 2015), and 1st survey (December 2014).

<Key Findings>

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1.　The proportion of respondents who changed their electricity supplier rose to 7.5%, while those who changed their rate plan rose to 6.6%, totaling 14.1%—an increase compared to the previous survey.

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Following electricity liberalization, 7.5% of respondents changed their electricity supplier (previous: 3.6%), and 6.6% changed their electricity rate plan (previous: 3.1%). The total proportion of those who made changes reached 14.1%, approximately double the previous figure of 6.7%.

Those who "compared options but did not switch" accounted for 28.4% (previous survey: 29.1%), while those who "neither compared options nor switched" accounted for 57.6% (previous survey: 64.1%). Seven months after full liberalization, the number of switchers is steadily increasing.

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2.Awareness of gas liberalization increased: "Clear awareness" was 42.1% (previous survey (Jun 2016): 34.6%, survey before that (Nov 2015): 28.7%), and "Content awareness" was 9.5% (previous survey: 7.6%, survey before that: 3.6%). For electricity liberalization, "clear awareness" stood at 78.0% (previous survey: 80.1%), while "detailed awareness" was 25.3% (previous survey: 24.3%), remaining at roughly the same level as the previous survey.

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Regarding gas liberalization, combining those who "know the details" (9.5%) and those who "don't know the details but definitely know it's being liberalized" (32.6%) shows 42.1% have "clear awareness." This is a 7.5-point increase from the previous survey.

However, 34.1% remain unaware, indicating a need for further awareness expansion.

Meanwhile, for electricity liberalization, combining those who "know the details" (25.3%) and those who "don't know the details but definitely know it's being liberalized" (52.8%) gives a "clear awareness" rate of 78.0%, which is nearly equivalent to the previous survey.

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3.Intent to switch gas providers was 12.5% (previous survey: 13.3%, survey before that: 15.0%), showing a slight decrease. Intent to switch electricity providers also decreased slightly to 10.2% (previous survey: 13.9%), partly due to previous switchers having already made the change.

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The intention to change suppliers after gas liberalization, combining "Want to change immediately" (1.9%) and "Want to consider changing" (10.6%), stands at 12.5%, nearly unchanged from the previous 13.3%. Meanwhile, the percentage of respondents who "are considering it but are unsure whether they will actually switch" (46.0%) increased by 8.1 percentage points from the previous survey. This suggests that while the intention to switch is growing, it has not yet translated into decisive action.

Intent to switch electricity suppliers totaled 10.2%, combining those who "want to switch immediately" (1.7%) and those who "want to consider switching" (8.5%). Seven months after liberalization, some intenders have already switched, leading to a 3.7-point decrease from the previous survey.

The percentage of consumers who "are considering switching but are unsure whether they will" (45.8%) decreased by 2 points from the previous survey but remains close to 50%, suggesting consumers are still taking a wait-and-see approach to electricity liberalization.

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4. With the start of gas liberalization, over 60% express the intention to consolidate their electricity and gas purchases with a single provider

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With gas liberalization starting, 13.1% want to consolidate electricity and gas purchases with "an electric power company," 11.0% with "a gas company," and 42.1% "haven't decided which but want to consolidate with one." The total intention to consolidate with one company reaches 66.1%.

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5.The top reasons for not wanting to change electricity providers were "I don't really understand the benefits," "I feel somewhat uneasy," and "I prefer the company I'm used to." Furthermore, understanding of electricity liberalization itself remains limited.

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When asked why they would not change suppliers, the top reasons among those not changing were "I don't really understand the benefits" (48.8%), "I feel somewhat uneasy" (38.2%), and "I prefer the company I'm used to" (33.7%).

Regarding electricity liberalization, around 40% of respondents still answered that they "don't understand it well enough to make their own decision about changing electricity providers." Other top reasons included "I'm worried that changing without understanding it well might cause problems" (36.9%), "Few people around me have changed yet" (33.5%), and "I want to wait and see a little longer before deciding whether to change companies" (31.3%).

When asked about awareness of nine basic items related to electricity liberalization, those who changed suppliers/tariff plans showed relatively high awareness rates. However, among the "non-switchers," only about 40% were aware that "switching electricity providers does not reduce the stability or quality of power transmission." Awareness for the other eight items remained between 20% and 30%. Furthermore, among the "non-switchers," one in three was unaware of any of the items.

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6.Two out of three electricity suppliers/tariff plan changers are "satisfied with the change itself," and over 40% responded that they would "actively recommend others consider switching."

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Meanwhile, when asked if they were "satisfied with having changed" their electricity provider or plan, 67.0% of those who did change answered "satisfied." Regarding satisfaction with their "electricity charges after changing," 53.0% also answered "satisfied," indicating very high overall satisfaction.

Furthermore, those who switched felt that "their current provider still delivers stable power supply with no worries about outages" (62.1%) and that "the switching process was simple" (66.9%). This suggests that the concerns felt by those who did not switch do not apply to those who did.

Furthermore, 41.2% of those who switched stated, "If someone were considering switching, I would encourage them to actively look into it." Communicating the satisfaction of those who changed their electricity provider or plan to those who haven't could significantly contribute to the progress of liberalization.

<Survey Overview>

Title: 4th Survey on Consumer Awareness Regarding Energy Liberalization
Survey Method: Internet survey
Survey Period: November 18-25, 2016
Area: 9 Electric Power Company Service Areas (excluding Okinawa Electric Power service area)
Respondents: 5,600 men and women aged 20 to 69 nationwide
Respondent Criteria: Household heads or their spouses who pay their own or their spouse's electricity bills
Survey Content: 45 questions in this survey
Basic attributes of general consumers (demographic attributes, family composition, housing type, etc.), energy usage patterns (energy supply type, proportion of energy costs relative to income, etc.), knowledge and awareness regarding energy liberalization, status of considering or changing suppliers, general attitudes and awareness trends regarding energy, desired image and services from suppliers, awareness of electric power companies and new power suppliers, process and information sources for changing suppliers, understanding of electricity liberalization content, concerns, etc.

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Dentsu Inc. News Release
http://www.dentsu.co.jp/news/release/2017/0131-009144.html