January 8 2015

Highlights January 2015

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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FOCUS: E-commerce: ¥20 trillion by 2018
While traditional formats struggle with consumption tax increases, saturated markets, locational problems, and low consumer confidence, Japan’s budding e-commerce (EC) channel continues to grow rapidly. Despite the stereotype imagined by people who’ve never been here, Japan is not really the high-tech land where everyone has an engineering degree, doodles artistic works of manga over the breakfast table, and spends their free-time programming complex smartphone apps and discussing the wonders of monetary economics. But if anything defines Japan, it’s a love of shopping and the drudgery of long commutes, two things that e-commerce brings together in harmony.

Seven & I seeks more suppliers for fast expanding own brands
Sales of Seven & I private brands already exceed ¥700 billion a year. The company is now expanding the number of dual branded lines with major manufacturers ranging from apparel to food and across its empire from convenience stores to Sogo Seibu. This seems like a win-win situation, giving Seven & I access to well-established manufacturer brand names, while suppliers from Japan and overseas get their products sold in large quantities in one of the biggest retailers in the country.

The Missus market: population growth driving fashion opportunity
The obsession with youth sometimes seems even stronger in Japan than other markets even though the population is shrinking. Recently suppliers and retailers alike have been waking up to the fact that one of the few segments set to grow in the next decade will be over 40s and 50s women: the Missus market. This segment currently has too few fashion shopping options, relying on major department stores at the top end, but then stuck with regional department stores, GMS chains and independent stores for everything else. Savvy retail-led businesses that target this market are booming.

Itochu signs Accessorize
Itochu has distribution and license deals with a variety of bag and accessories brands such as Hunting World and part-owns Le Sportsac, but most of its brands are mid to upper end with little mass market presence. It has just signed a deal with the UK’s Accessorize chain to fix this.

Household savings rate turns negative, poverty rates rising
Despite receiving a mandate to continue the Abenomics experiment, at least from the 35% of the electorate who could be bothered to vote, the government faces increasing pressure to get the economy back on track. The policies of boosting export income while raising demand at home are looking increasingly incompatible as the Yen continues to weaken. At the same time, inflation remains stubbornly low, with only key import commodities prices rising significantly.

Aeon expands specialty formats
Aeon continues to abide by the ‘keep it in-house’ rule, designing a myriad of small formats meant as tenants for its own stores and mall properties. Now several of these smaller brands will be spun off as new subsidiaries, with expansion to locations outside the direct control of Aeon Group.

Costco: 50 Japanese stores
Although widely dismissed as too un-Japanese to succeed when it first opened in 1999, Costco’s wholesale clubs are a roaring success in Japan. In 2015 it will take its chain to some 24 stores nationwide with ambitions for double that number. The membership club format may be unusual in Japan, but then it is not a common format anywhere, and the mixture of bulk buying, unique product ranges and a fun shopping experience continues to attract converts. The low prices help too.

Farfetch launches in Japan
London-based Farfetch, a fast growing fashion e-commerce business, has just opened in Japan. It hopes to increase the number of Japanese shoppers at its more than 300 boutiques around the world, and encourage more Japanese boutiques to sell globally.

FrancFranc switches to the over 40s
The home fashion market is booming, but despite this, Bals, one of the largest retailers of interior accessories, has seen sales fall in recent years. Part of its problem is new competition from cheaper chains offering similar ranges of pop home goods targeting 20s and 30s women such as 3Coins and Flying Tiger. It now sees a greater opportunity in the more serious home fashion market among home owners in their late 30s and 40s.

Takashimaya introduces direct to airport delivery for duty-free
Tourist shopping is now an increasingly important market for many retailers from high end to low end. Last month Takashimaya added a delivery-to-airport service to encourage tourists to get more shopping done throughout their trip rather than just near the end of their visit. The chain is even offering the service in more remote stores.

Online proving hard for supermarkets: Summit bows out
The benefits of taking existing supermarket businesses online seem significant and there is clear customer demand for convenient, home delivery services, at least in the major conurbations. But successfully implementing an online supermarket business is expensive and subject to lots of competition. Summit, the Tokyo based chain owned and operated by Sumitomo Shoji, has decided to throw in the towel, demonstrating just how tough it can be.

United Arrows seeks growth online
United Arrows gets a healthy level of sales from online sources, but loses much of the margin, not to mention customer data, to third party e-commerce operators. In order to encourage more customers to shop with it directly, it is pioneering a clever tool developed in Sweden that helps to minimise sizing errors.

Isetan-Mitsukoshi opens highway service area stores
It is telling when Japan’s once most exclusive department store chain lends its name to a shop in a highway service area. Rather than a sign of decline however, it is testament to Isetan-Mitsukoshi’s renewed vigour, and its determination to bring its products to its customers wherever they are.

Muy Mucho launches in Japan
Tomorrowland signs Canadian lifestyle brand
Daiei name to disappear by 2018
Aeon to build more large scale SCs
A shop window for overseas jewellery designers
Zennisshoku to open supermarkets in depressed towns
Askul sees major growth in 1H2014, Lohaco adds Body Shop and Seijo Ishii
Shibuya 109 in Hong Kong
Isetan Shinjuku updates baby & maternity floor
Futako Tamagawa Rise to add annex in Spring
Uniqlo to open in Antwerp
Look opens Vera Bradley Japanese flagship
Mitsubishi Estate confirms new Nagoya landmark with Isetan as anchor
Toiletry market up 1.2%
Uniqlo sues journalists for articles on work practices
Sogo Seibu sells local lucky bags
Isetan-Mitsukoshi introduces commission-based pay
Amu Plaza Oita to open this Spring with 183 tenants
JR East expands online
Kusuri no Aoki raises operating profit 25% in 1H
Japan Post IPO announced
Benetton closes Omotesando Store
Albis acquires JA stores in Fukui

Company and Brand Index this month
Numbers indicate page of report:

[columns count=”4″]A Colle, 6
A-Coop, 11
A-Price, 15
Accessorize, 1, 4
Aeon, 1, 3-4, 6, 10, 16
Akachan Honpo, 16
Albis, 11
Amu Plaza, 10
Apple, 7
Aramis, 3
Askul, 5-6, 14-15
Asos, 11
Auden, 5
Bals Tokyo, 9
Barneys Japan, 16
Beams, 11
Belluna, 15
Benetton, 11
Bic Camera, 15
The Body Shop, 6
Charlie’s, 1
Cocoku, 7
Costco Japan, 7
Cour Carre, 3
Cycle Spot, 6
Daiei, 3-4
Desigual, 7
Dinos, 11
Doclasse, 4
Dries Van Noten, 3
Edion, 15
Egoist, 8
Emporio, 3
Enoteca, 6
EpsonDirect, 14-15
Expasa Fujikawa, 11
FarFetch, 1, 7-8
Fast Retailing, 7
Felissimo, 15
Fitfit, 4
Flying Tiger, 8
FrancFranc, 1, 8-9, 16
Fuji Keizai, 15
Futako Tamagawa Rise, 7
Hunting World, 4
IKEA, 6, 8
Ikspiari, 3
Infinitye Ventures, 8
Isabel Marant, 3
Isetan, 6, 8-9
Isetan-Mitsukoshi, 1, 9, 11
Ito-Yokado, 10, 15-16
Itochu Shoji, 4
J Front Retailing, 9
J Period, 9
Japan Post, 11
Jason Wu., 4
Jean Paul Knott, 3
Joshin Denki, 15
JR East, 10
JR Kyushu, 10
Kakaku.com, 15
Kanpo Life Insurance, 11
Kenkocom, 15
Kinokuniya, 10
Kirin, 1
Kojima, 15-16
Komiya, 4
Koos, 3
Kusuri no Aoki, 10
Laglaia, 3
Lanvin, 4
Lapine, 3
Le Sportsac, 4
Leilian, 4
Limited Edition, 1, 3, 8-9
LINE, 4, 7, 15-16
Locondo, 13, 15
Loft, 6, 8, 16
Lohaco, 5-6, 14
Look, 7
Magaseek, 11, 15-16
Maison Ullens, 3
Maji, 4
Marui, 15
Maya Magal, 5
MI Plaza, 11
Ministop, 6
Mitsubishi Estate, 8
Mitsui, 8
Mitsukoshi, 3, 9
Mixi, 15
Mizuone, 3
MO851, 3
Monsoon, 4, 11
Muji, 15
Muy Mucho, 3
Nemika, 4
Neopasa Shimizu, 11
Nissen, 13, 15-16
Nitori, 6, 8
Nomura Research Institute, 13
NTT Docomo, 11
Oisix, 15
Outlet Peak, 16
PC Bomber, 15
R. O. U., 6
Rachel Entwhistle, 5
Radishboya, 15
Rakuten, 13, 15-16
Recods, 6
Seijo Ishii, 5-6
Seiyu, 10
Seria, 8
Seven Eleven, 1, 16
Sofmap, 15
Sogo Seibu, 1, 3, 8-9, 16
Soukai Drug, 15
Start Today, 13, 15-16
Stylife, 16
Sumitomo Shoji, 10
Summit, 1, 10, 14
Takashimaya, 1, 9
Toho Cinemas, 10
Tokyu Hands, 6, 10
Tokyu Malls Development, 6
Tomorrowland, 3
Uniqlo, 6-8, 15
United Arrows, 11, 16
Urban Research, 11
Vera Bradley, 7-8
Virtusize, 11
WTW, 9
Yahoo Japan, 15
Yamada Denki, 6, 15
Yodobashi Camera, 15
Z-Chain, 5
Zara Home, 7-8
Zennisshoku, 5
Zozotown, 4, 11, 16


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