March 2017 Highlights

FOCUS:
Fashion: The biggest e-commerce category – and still growing fast
Our recent focus on e-commerce (JC1701) showed just how rapidly the sector is growing in Japan, catching up with other advanced markets, and in some ways surpassing them, especially in mobile e-commerce where Japan is now a global leader. One of the main drivers of this growth has been fashion, with apparel the biggest category overall by value, and one of the top two fastest growing categories for the last five years. Along with the pure play firms, fashion retailers and brands have a very mixed record when it comes to grasping the opportunities and threats of what is already Japan’s biggest distribution channel.

Amazon Japan jumps 30% in 2016
Amazon Japan is the most successful international retailer in Japan ever, and one of the most impressive foreign market entry stories. And its latest results show it hasn’t finished yet. Sales surged in 2016, as the US giant continued to plough ahead with high levels of investment in new infrastructure, new services, increasing mindshare in categories like fashion, and most tantalising of all, seems to be putting in place the building blocks for a full scale attack on the biggest category of all: food.

Editorial: Japan to become EC leader

H&M Japan: ‘high expectations’
H&M has been one of the biggest foreign retail success stories of the last decade, and its new Japan CEO sees plenty of potential for expansion, with the H&M chain reaching 100 stores in the next few years and other H&M brands also being considered, including a return of Monki and Weekday which exited the market last year.

Tourist spending rose 7.8% in 2016
Tourist spending rose last year, although expenditure per head fell. Rising tourist numbers will help to increase net spending further, and it looks like per tourist spending will stabilise too. Some visitors, notably Australians, Chinese and Spanish, seem happy to spend their way across the archipelago.

Valor ready to break out of Chubu
Valor, until recently a relatively little known regional supermarket, is now one of the fastest growing food chains in the country, and is challenging Uny for dominance in its home market around Chubu. A new three year strategy looks to extend its retail focus, aiming to improve same store sales as well as build growth. Key to this is its new discount format, proving once again how welcome discounters are in today’s Japan and how much potential there is for more.

Don Quijote does rapid delivery
Don Quijote is known as Japan’s largest discount retailer, but it is quickly becoming much more, branching out into foods, services and multiple formats. Last month it announced a new rapid delivery service set to begin in Tokyo, and yet more record results.

Nitori considering push into apparel market
Nitori is currently Japan’s most popular retailer, with developers and consumers alike. Its founder and CEO Akio Nitori says he is now considering applying his supply chain and marketing magic to the apparel market, seeing a chance to create the first national low price chain for the older market.

Flying Tiger: 80 stores by 2020
Danish chain Flying Tiger has been a major hit with young consumers but it now wants to attract an older crowd more interested in homemaking. To do this, it will introduce a new type of small format store aimed at expressing the Danish concept of ‘Hygge’, and plans 30 such stores in the next three years, as well as many more standard stores too.

Otsuka Kagu fights back
The furniture market is today a three-way race – at least for now. Nitori and IKEA lead, with a number of small, but rapidly growing online retailers quickly making a mark lower down the ranking. The number three chain, Otsuka Kagu, continues to struggle, with another poor year in FY2016, but it still hopes that new concept stores could help revive its fortunes.

Daiwa House: leading provider of ‘build-to-suit’ distribution centres
The years up to the 2020 Tokyo Olympics will see many retailers expanding, and beyond that, most analysts expect e-commerce to continue to boom further. This growth requires new capacity and technology in the supply chain, and Daiwa House is rapidly taking the lead in providing it.

Joix to open 12 Psycho Bunny stores
Itochu continues to mop up licenses across key lifestyle categories such as sports and fashion. One of its biggest successes in the last 20 years has been the UK designer Paul Smith, and it now thinks New York-based brand Psycho Bunny will be his successor.

Sanyo Shokai to launch value brand
Sanyo Shokai is being pummelled from all sides, but a new, energetic president has big plans to shake up one of Japan’s most traditional apparel firms. A new lower cost chain for the shopping centre market is to be launched soon, but it may not be enough.

Retail Data: Department store sales fall 1.2% in January 

IN BRIEF
Mitsubishi makes Lawson wholly owned subsidiary
Japanese chasing bigger, stronger buttocks
Chinese fashion chain Read_Me to launch in Japan
Korean chain Redeye in Kansai
Trollbeads aims for growth
Kansai Supermarket launches mobile stores
Footwear market falls 1.8%
Facebook used by 27 million Japanese
Askul shares drop following DC fire
Mizuno to open ¥1.3 billion flagship in 2018
G-Foot acquires Mitsubishi shoe business
Japanese rapidly adopting mobile payments
Adidas and Haruyama launch suits collection
Tokyu tries to revive 109 brand
Goldwin buys Helly Hansen trademarks
Komehyo to close 9 stores
Laox forecasting a return to profit in FY2017
Lumine launches apparel brand with Pal
Yamada Denki acquires U-NEXT MVNO operator
Capitaland acquires four Tokyo properties
Brand license market shrinks 4%
Kitamura to close 129 stores

Companies and Brands mentioned in this Issue
ABC Mart
Adastria
Adidas
Aeon
Alpen
Amazon
Asics
Belluna
Burberry
Buyma
Capitaland Mall Asia
Cox
Crestbridge
Crooz
Daimaru
Daiso
Daiwa House
DeNA Shopping
DoClasse
Don Quijote
Ellesse
Facebook
Familymart
Fashionwalker
Fast Retailing
FDC Products
Flying Tiger
G-Foot
Goldwin
Guild Prime
H2O Retailing
Hakuhodo
Hankyu Men
Harukas Style
Haruyama Shoji
Helly Hansen
IKEA
Instagram
Itochu Shoji
J Front Retailing
JR Freight
Jupiter Shop Channel
Kansai Supermarket
KDDI
Kintetsu Department Store
Kirin
Kitamura
Komehyo
Lalaport
Laox
Lapine
Lawson
Leilian
Life
Lifegear
Lohaco
Lumine
Magaseek
Magica Premium Now
Marui Shoes
Matsuya Ginza
Mega Don Quijote
Mitsubishi Shoji
Mizuno
Mizuone
Monki
Muji
Nishimatsuya Chain
Nissen
NTT Docomo
Oisix
Okay Super
Omotesando Hills
Onward Holdings
OPA
Osaka Nanko
Otsuka Kagu
Outlet Peak
Pal Group
Parco
Paul Smith
Pelican Soap
Perfect Suit Factory
Polo Ralph Lauren
Psycho Bunny
Publisher Michael Causton
Put
QVC
R. Newbold
Rakuten
Redeye
Retro Girl
Ryohin Keikaku
Sanyo Shokai
Sazaby League
Seibu
Seiyu
Sense of Place
Senshukai
Shanghai Immensity Fashion
Shenery
Shimamura
Shop-List
Start Today
Stripe International
Sun Drug
Suning Appliance
T-Site
Tachiya
Takashimaya
The North Face
Tipness
Tokyo Metro
Tokyu Malls Development
Trollbeads
U-NEXT
Uniqlo
United Arrows
Uny
Urban Research
UTme
Wacoal
Walmart-Seiyu
Wego
Welcia
Yahoo
Yamada Denki
Yodobashi Camera
Zebra Japan
Zozotown