May 14 2021

Fashion e-commerce has watershed year in 2020

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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May 2021 Issue

Key stories in this month’s issue of JapanConsuming, the essential monthly analysis and data update on Japan’s retail & consumer markets:

FY2020 proves better than expected as savings surge
Inevitably, there were widespread problems throughout the retail sector in 2020, and with drugstores and supermarkets suffering a relative decline in the first quarter of 2021, things are still yet to improve. Department stores were hit hardest, with convenience stores also suffering their worst year on record but, in contrast, big specialty formats and supermarkets had a good year. Although incomes were robust, consumption declined, meaning that savings accounts are fuller than ever before, promising a surge in spending once confidence returns.

Editorial: Knowing there will be light at the end

Zozo: record sales and a future plan
Zozo had a great 2020, boosted in part by consumers’ buying online in the pandemic but also because of longer-term strategic changes to its business – and its new collaborative engagement with its majority shareholder, Z Holdings. While there may be a short-term correction once consumers return to stores, Zozo’s current operations and its future plans are so much stronger and more viable than two years ago that it is likely to emerge as a contender to be 2nd in apparel rankings behind Uniqlo.

Adastria says, “apparel market to shrink by 30% in next 6 years”
Adastria is pessimistic about the medium to long-term outlook for the apparel sector but not, that is, for Adastria. It sees its future as one of a small number of increasingly dominant leaders in apparel but also as a more diverse retailer.

J Front to focus on real estate
J Front is well aware of the weakness of the department store format but also knows a market for high-end emporiums will remain. The key, it believes, is making the most of multiple formats and commerce at its best locations and that means investing in real estate of all kinds.

Aeon 2020: a year of ups and downs
Aeon Group managed to maintain revenues at ¥8.6 trillion in FY2020, the third straight year with little change. Although it has no department store divison to drag it down, GMS operations and its heavy reliance on real estate and SCs, which make up more than 60% of revenues, meant it had a very difficult year in terms of profits – operating profit dropped 30%. A new five-year plan suggests it will spend heavily on e-commerce, and even wants to earn more from retailing rather than just from renting space.

Daiso goes upmarket
Daiso Sangyo’s stores were always temples to plastic but the 100 Yen shop leader is now moving a fraction upmarket and even becoming a channel for European brands.

Beams creates “people-centred” business
Moving beyond apparel has become a major theme for fashion retailers. Beams’ latest idea is to become a “people-centred curator” by which it means creating an incubator to find ways to help artists and other creators to commercialise their talent.

JP Rakuten Logistics online in July
Rakuten is playing catch up with Amazon in logistics and this is the primary driver behind its new collaboration with Japan Post. The two companies will set up a new joint business to cover the country in new, efficient fulfilment centres.

Fast Retailing optimistic for home and overseas markets
Fast Retailing was one of the few retailers to benefit from the pandemic, at least in its home market. Overseas, its ongoing commitment to the Asian market means it is now one of the top apparel chains in the region. Increasingly, the differentiator in performance among the big global chains is e-commerce integration and, in that respect, Fast Retailing still needs to catch up.

Mash: majority stake in Stylevoice
Competition in online fashion malls is cutthroat and has proved too much for one fledgling mall, Stylevoice, despite strong backing. It has now remodelled itself as a conduit for D2C brands and those lucky enough to be selected will now have help from some of the leaders in retail and marketing, including Mash Holdings and Cyber Agent.

Palette: Aeon’s new, cleaner discount supermarket
Aeon opened two new stores for yet another new supermarket chain in December 2020. The new Palette chain takes lessons learned from Aeon’s other discount chains, such as Big A and A-Colle, offering a more streamlined, cleaner format while maintaining a low-cost, low price operation. The first two stores have impressed.

Izumi to focus on food and online
Izumi is Japan’s largest retailer in the South and, at least until 2018, was the last GMS to maintain a growth trajectory. Now, with the popularity of the Cosmos Yakuhin discount food chain eating into Izumi’s profits in Kyushu and the same lack of enthusiasm for the GMS format also spreading as it has elsewhere, Izumi last month announced a wide-ranging and ambitious plan to reinvent itself over the next five years.

Fashion e-commerce has watershed year in 2020

Momentum was building for fashion EC well before 2020 but the situation last year brought an overwhelming response from both consumers and merchants. As a result, market share for the online channel has spiralled upwards and, although there will be a correction once shoppers return to stores, the medium-term trajectory is clear. The big malls continue to dominate – as Zozo’s 21.5% growth in 2020 attests – but retailers and brands are investing much more in their own online stores, creating a level of dynamism and competition not seen in other fashion retail channels.

Retail Data: The big bounce back

Consumer prices continue to fall
Takashimaya makes ¥34 billion loss
D2C food growing rapidly
Right On closes Harajuku store
Nitori does design with Beams
Seibu Shibuya to create D2C floor
Yamato fund buys into 60% fashion site
Rakuten opens homeware section
Marui offers full e-commerce package for D2C brands
Coca cola introduces vending subscriptions
Takashimaya signs Lina Stores from London
3rd Midtown SC planned in Yaesu
Cleaning up disposable diapers
Locondo aims for ¥100 billion
Sports footwear and apparel market down 10.6%
Rakuten luring customers from banks
400 queue for United Arrows’ outdoor brand
Sugi opens beauty store in Meitetsu Department Store
L’Occitane ties with Yamato Transport
Lawson to expand delivery service to 2,000 stores
Kohnan Shoji opens on Alibaba’s Lazada
Amazon Life netsuper further expands sales area
Rakuten food ordering moves to Gurunavi

Brands and Companies in this Issue

Adastria, 1, 5-6, 15-18
Aeon, 1, 7-8, 12, 16
Akachan Honpo, 15-16
Aldi, 12
Alibaba, 12-13
Amazon, 9, 13, 15, 17
Anap, 17
Another Address, 6
Anteprima Japan, 17
Aoyama Shoji, 15, 18
Barebones, 11
Baroque Japan, 15, 17
Baycrews, 5, 14-18
Bayflow, 5
Beams Design, 5
Bershka, 11
Big Yosun, 12
Bonwe, 11
Bshop, 17
Bulgari Hotel, 8
Burberry, 16
Buyma, 17
Camp7, 5
Cawachi Yakuhin, 1
Cecile, 15
Chloe, 4
ChooseBase, 5
Christophe Lemaire, 10
Coca Cola, 7-8
Cosmos Yakuhin, 3, 13
CouCou, 8
Cox, 7
Crooz, 17
Cross Plus, 16, 18
Cyber Agent, 11
Daidoh Forward, 18
Daiei, 7, 12
Daimaru Matsuzakaya, 6
Daiso Sangyo, 8
Daytona International, 11, 15
DCM, 7
Deco Home, 5
Descente, 15-16
Dinos, 15
Disney, 8
Don Quijote, 12
Dricos, 6
Elleair, 9
Esprit, 11
Faans, 4-5
Fabric Tokyo, 6
Familia, 17-18
Fashionwalker, 17
Fast Retailing, 1, 10, 16
Fauchon, 8
Five Foxes, 16
Flowplateaux, 9
Gamble Japan, 8
Gap, 11
Genky, 1
Global Brain, 6
Goldwin, 15-16
Gordon Brothers, 3
GU, 10, 15
Gunze, 15-16
Gurunavi, 13
Hankyu Hanshin, 15-16, 18
Helinox, 11
HEP, 19
Hirota Apparel, 16
Honeys, 15-16
IGA, 17-18
Inageya, 12
Inditex, 11
Insein, 6
Isetan, 1
Izumi, 1, 13
Japan Post, 9-10, 15, 18
Jil Sander, 4, 10
JINS, 16
Jo Malone, 4
Joinus, 19
Joix Corp, 17-18
Jun, 11, 15-19
Jupiter Shop, 15
Keihan Mall, 19
Kimuratan, 17
Kohnan Shoji, 12
Komeri, 1
Koti, 11
Kuroneko Innovation, 6
Lakore, 5
Laura Ashley, 3
Lawson, 12
Lazada, 12
Leilian, 16, 18
Lina Stores, 8
Locondo, 9, 15, 17
Look Holdings, 15
Lumine, 15
Magaseek, 15, 17
Maison Margiela, 4
Marui, 11, 15, 18
Mash Holdings, 11, 15-17
Maxvalu Tokai, 7
Maxvalu West, 7
Medicom Toy, 11
Meitetsu Department, 11
Mercari, 15
Milleporte, 18
Ministop, 7
Mitsui Fudosan, 8
Mizuho, 10
Moony, 9
Muji, 1, 8
MyLord, 19
Nano Universe, 16
Narumiya Int, 16-18
Natural Coordinate, 8
Nishimatsuya Chain, 1
Nitori, 1, 5-6, 8
Ocado, 8
Old Navy, 11
Onward Holdings, 15-16, 18
Pal Group, 15-18
Pampers, 9
Parco, 6
PayPay, 4, 10, 15, 17-18
Peacebird, 11
Plus Heart, 8
Pola, 4
Qoo10, 17
Rakuten, 6, 9, 13, 15, 17-18
Ryohin Keikaku, 15-17
Samantha Thavasa, 15, 17-18
Sanyo Shokai, 15-18
Seibu, 6
Semir, 11
Seven Eleven, 7, 13
Shimamura, 1, 15
Softbank, 17-18
Sompteux, 8
Studio Atao, 17
Stylevoice, 1, 11
Sugi Yakkyoku, 11
Takashimaya, 1, 3-4, 8
Tencent, 10
Theory, 10
Threeppy, 8
Tmall International, 12
Tokyo Base, 15-18
Tokyo Midtown, 8
Topvalu, 8, 12
TSI, 15-18
Tsuruha, 1, 3
Uber Eats, 12
Unicharm, 9
Uniqlo, 1, 5, 10, 14-16, 18
United Arrows, 1, 11, 15-18
Uny, 12
Uny Mall, 19
Urban Research, 15-17
Valor, 13
Wacoal, 15, 18
Walt Disney, 11
Wego, 15
Welcia, 3, 7-8
Wolt, 12
Yahoo, 17
Yamato Transport, 6
YouMe, 13
Zozo, 1, 4-6, 9, 11, 14-18


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