March 7 2014

JapanConsuming Headlines: March 2014

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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Get ready for 20 million tourists
Japan has the lowest levels of inbound tourism among advanced economies, but this is about to change thanks to lavish marketing, the growing affluence of neighbouring populations, Japan’s increasing soft power, and in 2020 the Olympics. The benefits to retailers and brands will be immense.

Focus: The Senior Market has arrived
The fact that Japan has the most rapidly ageing population in the world may be well known, but the impact of this change is still only vaguely understood. Retailers, however, are at last beginning to think through the implications and respond – they have little choice.

Editorial: Retail Sales Booming

Isetan-Mitsukoshi launches more small format stores
Isetan-Mitsukoshi has already proven its capacity to think beyond department stores through a series of small format concepts, and it will launch two more in the next year. These are helping the department store group reach new customers and better serve its core target too. Given the scale of investment, calling Isetan a department store business could well become a misnomer in a few years. Other department stores are looking at similar moves too.

Marui, Shimamura, Honeys to hold down prices from April
Although regulations demand that powerful major retailers don’t force suppliers to absorb the coming consumption tax increase, the same rules cannot be easily applied where private brands are now the norm. In the past couple of weeks, multiple companies have come out to say they will keep prices static and some will even reduce prices after 1 April in order to counter the general perception that everything in the shops is more expensive.

Kenzo signs with Yagi Tsusho
The Yen may have weakened from ¥100 to ¥140 to the Euro but enthusiasm for European brands continues unabated. Yagi Tsusho signed three brands in the last six months, including Kenzo.

Trinity Arts growth continues
Japan has a host of fast growing fashion retailers. One of the most consistent is Trinity Arts which is using the large cash pile of new parent Adastria to rapidly expand existing chains and launch new ones, including for overseas markets.

Supermarket M&A boom imminent
2014 could be a rough year for some – but problems with consumer confidence could be yet another reason pushing retailers towards greater consolidation. Last month saw what is the most significant merger in retail history between H2O Retailing and Izumiya. There have been bigger mergers financially speaking, but this is the largest between two solvent and actively competitive retailers. The news could well mean a psychological barrier to similar mergers has finally collapsed.

Direct marketing firms face pressure
Apparel e-commerce is an intensely competitive business and getting tougher. This is making life harder than ever for the main catalogue businesses, helping explain Nissen’s decision to accept the embrace of Seven & I Holdings.

Itochu signs more brands
Itochu Shoji isn’t shy about signing brands for the Japanese market, and almost monthly announces a new tie up in areas as diverse as sports and high end jewellery. Its latest deals range from designer fashions to outdoor shoes but, whatever the category, all are part of plans to greatly increase profits for the trading firm in the next few years.

NTT launches e-commerce mall
NTT Plala, the telecom giant’s internet service provider arm, has launched a smartphone e-commerce portal. Although NTT Docomo has its own mobile e-commerce services such as D Shopping, NTT Plala is offering a different take on e-commerce by creating what it calls a catalogue market, with Aeon and Tokyu Hands already on board.

Lawson enters supermarket sector
Lawson has been building up its fresh food business for the past five years, acquiring discount supermarket chain Shop 99 and turning it into Lawson 100, buying farms, and rolling out fresh foods in its convenience store business. In February it took the next step, announcing it would enter the mini-supermarket business proper, taking on Aeon and other supermarket operators directly.

Matsumotokiyoshi looking for M&A
Matsumotokiyoshi sits at the head of the drugstore sector, the biggest chain in Tokyo and one of the most aggressive retail banners of any format. It has struggled to expand into the regions, but Matsukiyo is setting aside more cash for acquisitions.

More station SCs, large and small
Railway operators continue to accumulate more share of retail sales, with a welcome impact on their bottom line. As well as upgrades to existing buildings, making stations much more attractive places to shop and dine, railway operators and partner developers like Aeon are building more station shopping centres every year with wide variation in SC size, from large malls to the tiniest metro corridor.

Daiwa House: logistics innovator
If you need logistics services for e-commerce or are looking for store construction, Daiwa House may have the solution. It is about to break ¥120 billion in sales from its logistics business, offering multi-tenant logistics facilities ideal for SMEs and especially for anyone selling online. It is also a major, if low profile, SC developer and operator with leasable space reportedly rivalling even Aeon.

Retail Data: Department store tourist sales double

News in Brief
Old Navy to open 25 stores in 2014
Fast Retailing eyeing J Crew
IKEA to double sales by 2020
Sazaby signs Raquel Allegra
Bow & Arrows: a new label from United Arrows
Jewellery market booms in 2013 but WILL slow in 2014
UK brand French Sole to open
Sogo & Seibu: new brand for senior couples
Takashimaya to open in Aeon Okayama
Laura Ashley to expand home stores
Daiei Tachikawa closes after 43 years
Beer sales booming
Mitsukoshi changes its old bags
Ito-Yokado opens first store in China for three years
Yahoo ties with Zozo, 109 and Parco on search
Daiei to close marche chain, write off DEBT
F.Clio opens Marunouchi store
Amazon invests in merchants
Heart Market buys Clean
Lula Magazine to launch in Japan
Rakuten pressured to stop scams
Urban Research Meiji Dori flagship planned


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