July 13 2021

Japan shrinks but singles market grows and grows

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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July-August Issue 2021

Shrinking, ageing Japan but a growing solo market
The latest Census confirms the ongoing fall in total population across most of the country but reveals surprising growth markets in small pockets, particularly around Greater Tokyo which now accounts for 29% of the total population. There are also ever growing numbers of single people, expanding the promising solo market. In the bigger cities, younger people bring new types of consumption but the increase in older singles is a growing problem.

Editorials: Single households the key to growth

Interiors market reaches record high
Home decoration consumption has been one of the few non-essential consumption categories to show consistent positive growth in the last few years. All types of brand and retailer have benefited but, since the start of the pandemic, it has been online stores and mass market retailers that have performed best. The boost from Covid aside, increased spending on home decoration is a long-term trend.

United Arrows unveils online brand
United Arrows core (and original) customer is now in their 40s and 50s with a large wallet and a willingness to spend on premium fashions. The venerable select shop retailer doesn’t want to age alongside its first customers and has unveiled a new brand targeting younger consumers with its lowest prices yet.

Komehyo combats online threat with stores
Mercari may dominate the re-use market but retailers still have a role to play. Komehyo thinks the way to compete is to make it much easier for vendors to sell their stuff and plans to quadruple store numbers to achieve this.

Isetan-Mitsukoshi targets wealthy
Isetan-Mitsukoshi is one of Japan’s most prestigious retailers – or at least it was up until the advent of the pandemic. Facing ongoing sales falls as customers are kept away from its stores, the company knows it has to evolve if it is to survive. As well as more online sales and a few merchandise tweaks, it is going after the rich.

OK Super breaks ¥500 billion
OK Super, the leading proponent of everyday low price FMCG retailing, saw sales exceed ¥500 billion for the first time last year, boosted by shoppers staying at home. It introduced a new home delivery service for customers not wanting to carry their purchases home and will expand this to a full netsuper this year. It also plans to offer prescription drug services at some stores.

Fashion retailers advance online investment
Fashion retailers continue to rely on third-party platforms to sell online but the scale of investment in direct mobile and web is growing. With Baycrews alone seeing customers that shop both online and in stores hitting 52% of all customers and spending 3.7 times more than store-only customers, it is not hard to see why.

Lawson targets depachika market
Convenience stores have struggled in the last year but all three major chains are now looking for new ideas to draw customers back by catering to a wider range of needs beyond the office market. Lawson introduced new ranges of deli items last month, designed to provide a department store experience at lower prices and close to home.

Seiyu: back in the mainstream
In 2002, Seiyu was saved by the foreign might of Walmart. Today it is about 25% smaller but over the same 20 years, it has gone from a ¥90 billion loss to an estimated ¥40 billion operating profit last year. Now, with the backing of its new majority owners, Seiyu has announced ambitious plans to become Japan’s largest online supermarket by 2025.

LINE ties with Staff Start
As reported last month, Staff Start is helping a multitude of retailers across fashion and other categories to promote their wares via staff blogs and chat while also helping cement the reality of omnichannel retailing. The service is now becoming even more ubiquitous thanks to a tie-up with LINE.

Oisix sees net profits up 500%
Oisix was perfectly placed to reap rewards from increased demand for fresh foods last year. Consolidated sales broke ¥100 billion for the first time and future growth depends mostly on fulfilment capacity. The company has established itself as a reliable source of high quality fresh foods and, so far, remains the only business of its kind selling online to middle and high income households.

Cosmos Yakuhin dominates new store applications
Japan requires retail developers to submit copious amounts of documentation to open any store over 1,000 sqm. In the past five years, there have been 2,505 applications for these larger developments, 750 of them anchored by drugstores, and more than 400 by Cosmos Yakuhin alone. The figures show a clear shift towards this one format.

The polarising pandemic: retail results vary by format, but most did better than expected
FY2020 was an anomaly and one that businesses everywhere will want to forget and never repeat. There was more than enough pain among Japan’s top retailers last year, but equally some formats did surprisingly well given the circumstances. For most, work-from-home was the single most important factor in determining a chain’s fortunes. City-centre stores and shopping centres offering mostly discretionary shopping have been hit hard, as have convenience stores. But those chains selling essentials, healthcare, electronics and, most importantly, food, all saw their fortunes improve. The pandemic has also revealed the strong, dynamic players and exposed the weaker ones. Oh, and everyone needs to be online.

Retail Data: Department stores still down 43% on 2019

Frozen food sales jump as shopping frequency falls
Shop Channel boosts investment in fulfilment and sale of experiences
Otsuka Kagu to become Yamada HD subsidiary
Shimamura launches outdoor brand with Logos, sales up 33%
Online shopping increasingly accepted
Alibaba offers logistics services to brands in Japan
Rakuten for women, Amazon for men
Zozoglass exceeds 1 million orders
Amazon customers save ¥16 billion on Prime Day
Zozo ties with Hankyu-Hanshin
Takashimaya aims for ¥50 billion online sales in 2023
Bape gets UK investment 
Mega Sports opens 8th Outside the Box store
Baycrews buys into Nubian
Yamada launches its own bank
Rakuten’s Shopping Panda becomes a hotel feature
JINS signs French tech firm, Fitting Box
Adidas ties with Hiroko Takahashi
Mitsui starts subscription service at Nihonbashi Malls, promotes solo dining
Tobu Department Store asks for redundancies
Tutuana plans larger stores
Rakuten to open new logistics centres in Osaka and Fukuoka
New online mall for FMCG
Rizap returns to profit

Brands and companies mentioned in this issue

Adastria, 1, 9, 20
Adidas, 10
Aeon, 8–10, 13, 15–16, 18–19
Alibaba, 5
Amazon, 6, 15–16, 19
Aoki Super, 20
Aoyama Shoji, 20
Arcland Sakamoto, 13, 20
Asaichi Shokuhin, 13
Auntie Rosa, 13
Axial Retailing, 15, 20
Bape, 8
Baycrews, 8–9
Beisia Group, 16
Belc, 13, 15, 20
Bic Camera, 15–16, 19–20
Cainiao Smart, 5
Cainz, 13, 15–16
Cawachi Yakuhin, 1, 20
Citen, 5
Cocokara Fine, 19–20
Cosmos Yakuhin, 1, 12–13, 16, 18, 20
Costco, 13
Daiei, 10
Daifuku, 3
Daikokuten Bussan, 13, 20
Daimaru, 1, 6
Daimaru Matsuzakaya, 15, 20–21
Don Quijote, 13, 18–19
Ecos, 20
Edion, 16, 19–20
Familymart, 16, 18, 20
Fast Retailing, 16, 20–21
Fitting Box, 10
Fuji Yakuhin, 16
Genky, 1, 20
Grandberry Park, 13
Hankyu Hanshin, 20–21
HAPiNS, 13
Heiwado, 16, 20
Hmenz Hair, 7
Honeys, 20
IKEA, 4, 13
Instagram, 8–9
Itochu, 16
Iwataya, 6
Japan Post, 10
JINS, 10
Joshin Denki, 16, 20
Joyful Honda, 20
Keiyo, 20
KKR, 10
Kobe Bussan, 19
Kohnan Shoji, 13, 16, 20–21
Komehyo, 1, 5
Laox, 20
Lawson, 1, 9, 16, 18, 20
LINE, 1, 8–11
Loewe, 7
Logos, 4
Lufi, 13
Machi, 9
Matsumotokiyoshi, 16, 19–20
Maxvalu Chubu, 13
Mega Sports, 8
Mercari, 5
Mitsubishi Shoji, 7
Mitsui Fudosan, 3, 10–11
Mitsukoshi Nihonbashi, 6
Muji, 1, 4–5, 20
Nafco, 4, 13, 20
Nitori, 1, 4, 16, 19–21
Nubian, 8
Oisix, 1, 11–12
Onward Holdings, 9
Otsuka Kagu, 4
Pal Group, 20
PayPay, 11
Rakuma, 5
Rakuten, 6, 9–10, 12, 16, 18
Rizap, 13
Ryohin Keikaku, 16, 19–20
Sanwa, 13
Sanyo Shokai, 9
Seiyu, 1, 10, 13, 16, 19
Seven Eleven, 16, 18, 20
Shimamura, 1, 4–5, 16, 20–21
SNSA, 16, 18
Sogo Seibu, 1, 16, 20–21
SOME, 14
Sports Authority, 8
Staff Start, 1, 11
Sugi, 16, 20
Summit, 20
Sundrug, 13, 16, 20
Teva, 8
Trial Company, 13, 16
Tutuana, 12
Uniqlo, 1, 5, 8, 16
United Arrows, 1, 5, 8–9, 20
Uny, 10, 13, 16, 18–19
Valor, 7, 13, 16, 18, 20
Vanish Standard, 11
Walmart, 10
Welcia, 16, 18, 20
World Wealth, 7
Yamada Denki, 4, 13
Yodobashi Camera, 15–16
York Benimaru, 13, 16, 18, 20
Zozo, 6–9


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