I heard that in Japan, shareholders receive gifts such as discount coupons, rice, and soy sauce. Is this 'shareholder benefit' cost-effective?

That's right, what you heard is true! In Japan, this is a very common and unique system called "Kabunushi Yūtai" (株主優待, Shareholder Benefits).

So, is it actually worth it? Let's break it down clearly today, just like chatting with a friend.

First, What is "Kabunushi Yūtai"?

Simply put, it's when publicly traded companies, to thank their shareholders for their support, give out extra "gifts" on top of cash dividends. These gifts are incredibly diverse and interesting:

Food & Drinks: This is the most common. Examples include the rice, soy sauce you mentioned, plus product vouchers, instant curry, beverages, beer, etc., from food companies.
Discount Coupons / Gift Certificates: Vouchers or discount coupons for chain restaurants (like Yoshinoya, Saizeriya), supermarkets, department stores, and clothing stores. If you're a regular customer at these places, this is super practical.
Free Services / Tickets: Railway companies give free ride tickets, airlines offer flight discounts, movie studios provide movie tickets, and theme parks (like Sanrio Puroland) give admission tickets.
Company Products: Cosmetics companies send skincare sets, stationery companies offer stationery gift packs, and so on.

Basically, companies give benefits related to whatever they do.

Why Are Companies So "Generous"?

It's not just about "thanks"; there are several business reasons behind it:

Stabilize Individual Shareholders: Offering practical items attracts many ordinary people like you and me to become long-term shareholders. More individual shareholders make the stock price less volatile due to large institutional trades.
Promote Their Own Products: Giving you a voucher for their restaurant? If you try it and like it, you become a repeat customer. It's direct advertising.
Build Brand Loyalty: When you're not just a consumer but also an "owner" (shareholder) of the company, the feeling is different. You pay more attention and are more willing to support it.

So, Is Buying Stocks Just for "Kabunushi Yūtai" Worth It?

This is the core question. The answer is: It depends; you can't generalize. Let's look at it from two angles:

When is it "Worth It"?

As Tangible Extra Return: Stock returns usually come from two parts: capital gains (price increase) + cash dividends. In Japan, you can think of it as three parts: Capital Gains + Cash Dividends + Shareholder Benefits. These "benefits" are tangible items that save you money or provide enjoyment, effectively increasing your investment return.
Small Investment, High "Benefit Yield": Many companies offer benefits for holding just 100 shares (the minimum trading unit for Japanese stocks is usually 100 shares). Sometimes, you might spend only ¥10,000 (around ¥5,000 RMB) for 100 shares but receive vouchers worth ¥3,000 and ¥2,000 in cash dividends annually. That means the dividend + benefit yield alone is 5%! That's quite substantial.
Small Joys in Life: Frankly, receiving a package from the company each year and opening it to see what tasty or useful things they sent is fun in itself. It adds a human touch and a sense of participation to the otherwise cold world of investing.

When is it "Not Worth It" or Even a "Trap"?

The "Benefit Trap": Buying a Bad Company for the Perks! This is the biggest pitfall! Some companies perform poorly, with stock prices falling year after year, but they use seemingly attractive "benefits" to lure you in. Example: You spend ¥100,000 on a company's stock to get ¥5,000 worth of gifts annually. But over the year, the company performs so badly that the stock price drops 20%, turning your ¥100,000 into ¥80,000. Losing the watermelon (¥20,000 principal) while chasing the sesame (¥5,000 gift) is a terrible deal.
Stock Price Volatility Risk: Japanese companies have a "record date" (権利確定日, essentially the ex-dividend date for benefits) for determining who receives benefits and dividends. Many people buy shares just before this date to qualify for the benefits and sell immediately after. This causes significant short-term price volatility ("rights rush" and subsequent selling) around this date. If you buy at the wrong time, you could easily be left holding the bag at a high price.
Impractical Gifts: If you live in Hokkaido but get a restaurant voucher only usable in Tokyo, it's useless. Or if you live alone and the company sends you 20kg of rice – you can't finish it, and it just takes up space. So, whether the benefits suit your lifestyle is crucial.

Final Advice for You

If you're interested in "Kabunushi Yūtai" and want to try it, remember these principles:

Company Fundamentals Come First: Like any sound value investment, research if the company is fundamentally good. Is it profitable? Does it have growth potential? Is it financially healthy? Only consider the benefits if the company itself is a worthwhile investment.
Treat Benefits as Icing on the Cake: Don't put the cart before the horse. See them as an "extra perk" or "little bonus" on top of investing in a good company, not the sole reason for buying.
Calculate the Total Return: Comprehensively evaluate the "expected stock performance + cash dividend yield + value of shareholder benefits" to see if the overall return is attractive and if you can handle the associated risks.
Choose Benefits You'll Actually Use: Invest in companies whose products you already consume or whose benefits are genuinely practical for you. This maximizes the value you get.

In conclusion, "Kabunushi Yūtai" is a fascinating feature of the Japanese stock market. Done right, it can genuinely boost investment returns and enjoyment. But the key is to be a smart investor and always remember you're buying the "company," not just the "free gift."