Dentsu Inc. Conducts "5th Survey on Consumer Awareness Regarding Energy Deregulation"

Dentsu Inc. Conducts "5th Survey on Consumer Awareness Regarding Energy Deregulation"

・Awareness of retail electricity liberalization for households exceeds 90% and remains stable, but understanding of its details remains below 30%, the same level as the previous survey.

・Awareness of retail gas liberalization for households is 80%, and understanding of its details is just under 20%, showing an upward trend since the November 2016 survey.

・As of June this year, 16.7% changed their electricity supplier or tariff plan. 4.7% changed their gas supplier. Both show regional disparities.

・Intention to change suppliers for both electricity and gas remains below 10%. Consideration intent is also declining, indicating slowing market interest and engagement.

・Basic understanding of electricity and gas liberalization remains insufficient. Concerns and worries about changing their current lifestyle are evident among those who have not changed providers.

・When choosing electricity and gas providers, consumers prioritize cost-effectiveness, customer service, simplicity and clarity, and trust and reliability.

・Various technological advances may lead to lifestyle changes and new service possibilities that increase interest and engagement with energy, including electricity and gas.

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 responds to the major transformation in the energy industry structure driven by the full liberalization of electricity retail in April 2016 and gas retail in April this year. DEMS provides solutions to help client companies create new businesses.

To highlight challenges for market progress, such as consumer awareness and understanding of electricity and gas retail liberalization, as well as intentions and actual actions to switch suppliers, Dentsu conducted its "5th Survey on Consumer Awareness of Energy Liberalization" in June this year. The survey targeted 5,600 men and women aged 20 to 69 nationwide. This release presents key findings, comparing them with previous surveys: the 4th (November 2016), 3rd (June 2016), 2nd (November 2015), and 1st (December 2014).

<Key Findings>

1. Awareness of liberalization: Electricity 91.6% (previous 93.5%), Gas 80.1% (previous 65.9%). Understanding of details: Electricity 24.6% (previous 25.3%), Gas 16.1% (previous 9.5%).

・Regarding electricity liberalization: "Know the details" 24.6% (previous: 25.3%) "I know it was liberalized, but I don't understand the details" 52.3% (previous: 52.8%), "I've heard about it" 14.7% (previous: 15.5%). Combined, this totals 91.6% (previous: 93.5%), indicating electricity liberalization is widely known and awareness remains high.

・Regarding gas liberalization: "Know the details" 16.1% (previous: 9.5%), "Don't know the details but know it was liberalized" 41.7% (previous: 32.6%), "Heard about it" 22.3% (previous: 23.9%). Combined, this totals 80.1% (previous: 65.9%), an increase of 14.2 points. While awareness is steadily progressing, there remains room for further expansion.

・Furthermore, a gap exists between awareness of liberalization and understanding of its details: 67 points for electricity and 64 points for gas, suggesting a lag in understanding the specifics of liberalization.

・When asked about awareness of 13 basic items related to electricity and gas liberalization, over 60% were aware that "you can freely choose the electricity or gas company providing service in your area." However, only about 30% were aware of the following 4 items: "Electricity or gas supply will not stop even if the contracted company goes bankrupt," "Switching electricity providers will not reduce transmission stability or quality," "Changing electricity providers does not require new wiring," and "Gas liberalization allows electricity companies to enter the market alongside gas providers." Only about 30% of respondents were aware of these four points. Awareness of the other eight points was below 30%, and over 20% of respondents were unaware of any of the points. This indicates a need to promote a correct understanding of liberalization.

2. Those who changed their electricity supplier accounted for 9.8% (7.4% previously), while those who changed their rate plan accounted for 6.9% (6.6% previously). Both supplier and plan changes showed regional disparities.

・Among those affected by electricity liberalization, 9.8% (previous survey: 7.4%) changed their electricity supplier and 6.9% (previous survey: 6.6%) changed their electricity rate plan. This brings the total proportion of those who made changes to 16.7%, an increase of 2.7 percentage points from the previous survey's 14%.

・By service area, switching electricity suppliers was most common in the Tokyo Electric Power Company service area (17%), followed by Kansai Electric Power Company (14.9%) and Hokkaido Electric Power Company (14.6%). Changing electricity rate plans was most common in the Chugoku Electric Power Company service area (17.4%), followed by Chubu Electric Power Company (16.3%) and Shikoku Electric Power Company (9.8%). Over a year has passed since full liberalization, and while the number of switchers is steadily increasing, progress in switching varies by region.

3. Gas supplier switchers: 4.7%. Compared to Chubu and Kansai, Kanto saw a flat start.

・As of June this year, three months after gas liberalization, 4.7% of respondents had changed their gas supplier, while 21.3% had compared options but not switched.
For comparison, the third survey (June 2016) conducted three months after electricity liberalization showed 5.9% had changed their electricity supplier and 34.6% had compared options but not switched. Comparing the three-month marks after liberalization, both switching rates and comparison rates are higher for electricity liberalization.

・By service area, gas supplier changes were most active in the Chubu region (Toho Gas service area: 6.8%) and the Kansai region (Osaka Gas service area: 6.5%), while the Kanto region (Tokyo Electric Power service area) saw only 2.1%, about one-third of the others. Regional differences emerged early in the market's development.

4.The "intention to change" electricity suppliers stood at 7.9% overall (previous: 9.3%), rising to 46.5% when including "consideration" (previous: 55.7%). The "intention to change" gas suppliers was 7.3% overall (previous: 12.4%), rising to 46.9% with "consideration" (previous: 58.4%). Both electricity and gas showed a downward trend.

・Intent to change electricity suppliers: 7.9% (combining "Want to change immediately" at 0.9% and "Want to consider changing" at 6.9%). This is a 1.4-point decrease from the previous survey. Adding "Considering but unsure if I will change" at 38.6% brings the total to 46.5%, a 9.2-point drop from the previous survey, falling below half.

・For gas, the combined intention to change suppliers ("Want to change immediately": 1.0% + "Want to consider changing": 6.2%) was 7.3%, a 5.1-point decrease from the previous survey. Adding those "Considering but unsure if they will change" (39.7%) brings the total to 46.9%, an 11.5-point drop from the previous survey, also falling below half.

When asked why they hadn't switched suppliers and had no intention to do so, the top responses were: "It wouldn't be cheaper than my current provider" (electricity: 27.5%, gas: 23.8%), "I prefer the company I'm used to" (electricity: 25.9%, gas: 24.6%), "I don't understand the benefits" (electricity: 25.9%, gas: 24.2%), "Don't want to lose out by switching" (electricity 24.5%, gas 23.8%), and "Anxious about switching" (electricity 20.8%, gas 21.3%). These responses reveal concerns about altering their established lifestyle for both electricity and gas.

5.When choosing electricity or gas providers, consumers prioritize affordability, customer service, simplicity and clarity, and trustworthiness/reliability.

・Regarding electricity and gas providers, respondents strongly prioritize "cost savings" (67.2%), "better deals than competitors" (33.7%), and "generous points programs" (15.9%). Simultaneously, they value "response to accidents/troubles" (40.5%), "routine maintenance" (36.2%), "service response" (23.5%), "easy-to-understand contract terms" (38.1%), "simple procedures" (27.3%), "stable supply" (42.1%), and "well-known and trustworthy" (33.8%).

6.For receiving information from electricity providers, familiar channels are preferred.

・Sources from which respondents have received notices or information from their electricity provider: "Billing statements" 34.5%, "Company website" 26.7%, "Web member page" 22.1% (in descending order). When asked about preferred information receipt methods, "meter reading statements" ranked highest at 51.8%, followed by "mailed materials or direct mail" at 31.5%, and "web member pages" at 27.9%.

・While channels allowing viewing at one's convenience are preferred, there is a tendency to avoid push-type information delivery via sales representatives, operators, email newsletters, or SMS.

7. Technological advancements and new services, along with changes in lifestyle, may further increase engagement and interest in energy in the future.

・When asked about services and technologies expected to increase energy engagement and interest, responses included "wireless charging" (46.1%) and "generating electricity from small amounts of energy around us" (43.9%). This reflects interest in freedom from the hassle of outlets and charging, leading to expanded mobility. Additionally, "living close to self-sufficiency per household without relying heavily on purchased electricity" (41.2%) and "Treating self-generated electricity or reduced consumption from conservation as generated power for trading in the electricity market" (38.8%), and "Sharing electricity between homes" (29.3%).

＜Survey Overview＞
・Title: 5th Survey on Consumer Awareness Regarding Energy Liberalization
・Survey Method: Internet survey
・Survey Period: June 28 to July 1, 2017
・Area: 9 electric power company service areas (excluding Okinawa Electric Power service area)
・Respondents: 5,600 men and women aged 20–69 nationwide
・Respondent Criteria: Household heads or their spouses who pay their household's electricity bills
・Survey Content: 35 questions
Basic attributes of general consumers (demographic attributes, family composition, housing type, etc.), actual energy usage (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, awareness of content related to electricity liberalization, etc.

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Dentsu Inc. News Release
http://www.dentsu.co.jp/news/release/2017/0818-009345.html