April 2020 Issue
Covid-19: FMCG gain amid nationwide pain
Japan is suffering as much as anywhere from the current coronavirus crisis. At least until March, the biggest issue was the country’s huge reliance on China as a supply base for everything from car parts to baby supplies, but as the government gave up hopes of running Abe’s Olympics in 2020, there is now an even greater sense of concern as parts of Japan are likely to go into long or short-term lockdown soon. This will continue to benefit retailers of FMCG and food, but it spells disaster for the travel and discretionary goods sectors. Japan’s government will certainly offer financial support, but this might not be enough for some long-ailing companies.
Editorial: Abe’s last hopes dashed
Donki to ignite off-price retail market
Unlike the US and Europe, Japan had no off-price fashion market to speak of until last year when Geo Holdings, World and Joyful Honda launched Japanese versions of TJ Maxx. Last month, Don Quijote operator, PPI, weighed in with its own chain, a move that is likely to spark a rush of stores and rapidly increasing popularity among consumers.
Aeon to close Claire’s stores
US accessories chain, Claire’s, has been in the Japanese market for more than two decades under Aeon management but all of its 110 stores will close this year. Aeon has almost completely pulled out of foreign lifestyle contracts in the last few years, following the closure of Talbots and Laura Ashley.
“Leaving Rakuten” becomes a trend
In mid-March Rakuten went ahead and introduced free delivery on purchases of just ¥3,980 or more, but only for vendors willing to pay the price. The controversy continues to reverberate and increasing numbers of vendors are abandoning the online mall as a result. Whether this will turn into a major revolt remains to be seen, but the more major brands that depart, the worse it is for Rakuten’s reputation. Meanwhile, there is disquiet in the company about its pending mobile phone service launch.
Mitsukoshi Ebisu and Matsuzakaya Toyota to close
February saw Japan’s first department store-free prefecture and, as department store operators continue to rationalise chains and close loss-making stores, more will follow, helped along by the current crisis. Last month, Isetan-Mitsukoshi and Daimaru-Matsuzakaya announced further closures.
Aeon Mall bigger than department stores in 2020
By the end of this year, Aeon Mall will have more space than all directly managed space in department stores. Even excluding properties run by Aeon Retail and other parts of the group, by December Aeon Mall will have around 5.3 million sqm of space across 143 properties. The shift demonstrates Aeon’s relentless pursuit of rental income, as well as perhaps too much reliance on expensive capital.
Z Holdings and Yamato create fulfilment service for all
It has taken Z Holdings just six months to transform from owners of just the third largest e-commerce mall to become a potential leader in online ecosystems. With online demand increasing during the health crisis, last month Z Holdings announced the accelerated introduction of a new logistics and fulfilment system offered in conjunction with Yamato Transport. The new system will primarily support PayPay Mall and Yahoo! Shopping vendors, but will soon be available as a SAAS solution for other e-commerce providers.
2019 a good year for department stores, but the trend is still down
Top department stores generally performed well in the 12 months to December 2019, but compared to five years ago, most stores and most regions are well down as the sector continues to shrink. There are some exceptions, however, and Takashimaya is currently driving what growth there is.
Stripe CEO resigns amid sexual harassment accusations
Stripe International’s sales have grown five times in a decade but slowed recently, delaying hopes to launch an IPO. The resignation last month of its CEO following charges of sexual harassment will not help it return to the stellar growth rates achieved up to 2016. Stripe is hopeful, however, and continues to invest heavily overseas as well as expecting a 3-5% increase in gross margins at home from digitising supply chains.
Qoo10 to sell 1.2 billion Ebay items
Qoo10 is working hard to catch up with the big three online malls but is coming from a long way behind. Fortunately it is owned by Ebay which is backing it with heavy investment and integration with Ebay in the US.
FOCUS: Fashion e-commerce: direct investment on the rise
Fashion is the fastest growing and largest category in the e-commerce channel in 2018. Fashion items are easy to stock and ship and low cost. Consumers still like to see, feel and try on their fashion purchases, but the ease and lower cost of shipping means that it is also an excellent category to shift to omnichannel, integrating customer touchpoints across promotion, through product trial, purchase and delivery. This is exactly what is now happening. All the major brands are selling online in some form, mostly through one or more of the big onlne malls, including the one dedicated fashion mall, Zozo, but more and more are now also selling direct online, with the best ones integrating online sales with their stores.
Retail Data: Discretionary down in February
Lumine NEWoMan, Yokohama: more luxury, more food
Uniqlo to open biggest stores yet
Urban Famima!! opens in Tokyo
Otsuka Kagu: a rare bit of cleverness
LINE to take 60% stake in Demaekan
Mitsui to open 2nd Lalaport in Aichi
Gap updates Shinjuku flagship with cafe
L Catterton buys into ETVOS
Beams launches online-only brand for Z generation
Georg Jensen opens Ginza flagship
Lululemon to open biggest Asian store at Roppongi Hills
Prologis to build dedicated DC for Oisix
Yamada Denki acquires Leo House
World plans big growth for Laxus
Dean&Deluca: no impact from bankruptcy in USA
Locondo signs French footwear brand, ties with YouTuber
Lazartigue vegan haircare brand comes to Japan
TSI signs US golf brand Ping
Otto Japan launches lifestyle store
Direct to Consumer brand, AllBirds, online in Japan
Sumitomo to open 65,000 sqm in Koto-ku
City Hill files for bankrupt
Richardson to open in Tokyo with Supreme collaboration
Seven Eleven introduces tablets to restore chain control
Yaoko adds 6th netsuper
Apps and SNS drive sales
Brands and Companies in this Issue
Blue Bottle Coffee
Craft Standard Boutique
J Front Retailing
Kaldi Coffee Farm
New Balance Golf
Oisix Ra Daichi
Polo Ralph Lauren
Power Station Osaka
Sumitomo Real Estate
Tokiwa Department Store