JapanConsuming Headlines: June 2010

Jun 18
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Retail pioneers: selling food online
Selling food online remains a business still in its infancy in Japan despite Seiyu opening the first online supermarket way back in 2000. Small though it may be, most of the leading food retailers now have some form of sales channel through the internet, and there are a few other notable players who sell purely online. While there’s increasing standardisation, with similar ideas being copied by most companies, no one has yet developed serious scale or shown a clear commitment to make the business more than a drop in the food retailing ocean, but all agree that it is a business that will take an increasing share in the future.

Chinese firm buys Renown
Renown. One of the worst managed apparel companies in Japanese commercial history and an example in how intransigence, not to mention overly lenient banks, could ruin one of the leading apparel companies of the 1980s and result in turnover falling 80% from its peak with close to 20 years of continual losses. Its takeover by a Chinese textile business could not be more apposite.

Itochu plans big push into childrenswear
Itochu has signed a new license deal with childrenswear giant Carters of the US, a deal which incorporates Oshkosh B’gosh. Given the size of the Carters business and its accessible price points, Itochu says it believes it can create a major new childrenswear retail operation around the two brands, albeit with a cautious start.

Japanese underwhelmed by eco-friendly products
Despite a fairly constant insistence that consumers here love nature and the environment, Japan never really seems to lose its preference for concrete, convenience and ever longer lasting consumer products. High profile marketing of Toyota’s Prius, Coca Cola’s iLohas and even the Cool Biz campaign sponsored by the government have all entered the consumer mindset, but, in the end, punters are only willing to save the environment if someone else is paying the cost.

Supermarkets: not all shops are equal
Things are changing rapidly in the retail sector, with most major chains now fully aware of the need to create a return on investment. In the older, more supplier dominated sectors, however, the emphasis is still on a constant stream of additional volume, with less interest in providing long-term returns from existing stores. This has to change, but it is proving difficult.

Aeon: Japan’s source for bicycles and funerals
Aeon had a poor year last year, being saved from making a second loss in a row by massive cost cutting (see JC1005). The group plans to continue this cost cutting exercise, and given the huge amount of operational duplication among its many subsidiaries and group parts, there is plenty of room to create more profit from the existing business. It will also introduce a few more interesting new ideas too.

Aeon and Parco to bid for Seibu Yurakucho Building
Bids are coming in for the key Seibu Yurakucho location in central Tokyo. A wide range of retailers and developers are rumoured to be interested, with Yamada Denki publicly on record as wanting the site. In the end, however, the store could simply revert to one of Seibu’s historical affiliates.

Jeansmate: no jeans here
Jeansmate has decided that the market for jeans and other casual apparel alone is increasingly too competitive to maintain its business – probably sound reasoning given its dramatic fall in turnover in the last few years. The chain is now taking steps to diversify into variety goods, with parts of existing sales floors being converted and completely new store formats in the offing.

MC+ aims to lead in Shibuya 109 fashion online
MC+ entered the online sales and fulfilment market in April, launching their first website outsourced from gals’ fashion brand, Harlem. The company is the latest in a growing number of website sales and fulfilment companies appearing on the scene, but MC+ will specialise in the fairly narrow niche of cutting edge women’s clothing.

ShopStyle comes to Japan
There are already many home grown and highly successful social networking sites in Japan and some of these include shopping for products like cosmetics and fashion as a focus, but there is as yet no site which defines this segment. US-based shopping search site ShopStyle thinks it has something unique to offer and hopes it can become the Yahoo of shopping searches.

United Arrows diversifies beyond fashion and fashionable locations
Competition for space in the best station and fashion buildings is intense and getting tougher. This is even the case for the select shop firms like United Arrows that helped create the success of buildings like Lumine. The select shop business itself is also facing a tough set of trading conditions with pressure on prices from mass market chains, and a host of nimble start ups in the select shop space offering that key value add for this market: originality. United Arrows’ answer is diversification – of both formats and locations.

Forever 21 Ginza gets 300,000 visitors in a week
Forever 21 has been a media and consumer hit since opening here last April, a success replicating its home market. Executives suggest this is just the beginning with a target of 100 stores in Japan within a few years. And while the Ginza flagship looks big enough, there are hints that stores similar to the 8,000 sqm spaces in the US could be forthcoming. Could these even replace the higher density regional department stores?

More Chinese coming: Japan relaxes visa rules
Just a year after allowing individual tourist visas albeit to a tiny fraction of the wealthiest Chinese, Japan has relaxed the rules with a potential 16 million households now allowed in. Once again the lure of lucre helps break down political and social barriers, and retailers here are celebrating.
Box: Ginza tops Chinese list of places to visit

Start Today affirms web lead
Start Today posted another record set of results and now has more than 2 million young fashion consumers in its database. As a sign of its growing maturity, it has taken a big stake in Cyberagent’s fashion auction business too.

News in Brief
D&G exits JapanTokyo Blouse Goes into administration
The Apple iPad as shop window
Japanese buying more luxury at discount
TV ads working for fashion chains
ROU quiet at opening
Ginza Mitsukoshi hopes for sales of ¥70 billion after expansion
Seven Home: store No. 2
Men like baseball, women like figure skating
Fauchon to launch own stores
Men’s fashion: now even parasols
More cheap suits
Mitsui Outlet mall sales up
Japan 101st in terms of women’s empowerment
Triumph sales fall 7%
Mitsubishi Fashion launches
Crocs opens in Shibuya
Tower, HMV: struggling to survive
Cecile attempts fast fashion store
Sanrio to close Japan stores, expand overseas
WeSC opens first Japan store
FrancFranc village opens in Aoyama
Aoyama: Suits for China
Look signs Repetto

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