September 6 2023

Yahoo Shopping falling behind Amazon and Rakuten

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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July-August 2023 Issue

Yahoo Shopping falling further behind Amazon and Rakuten

Last year was pivotal for Yahoo Japan: despite record group performance, GTVs in e-commerce actually fell in the face of continued strong growth in the sector and double digit increases for its two bigger rivals, Amazon and Rakuten. Yahoo Shopping is now not only less popular with consumers, even merchants are dissatisfied – which is saying something when the service is essentially free.

Editorial: More confidence, more realism

Growing but changing gift market

The gift market remained robust during the pandemic and grew again last year. But the structure has shifted, with much less formal (i.e. obligatory) gift giving and a lot more spontaneous and personal gifting to close family and friends. The market is wide open to new ideas from international brands.

JAL aims for ¥12 billion from new online mall

Japan’s airlines have long offered popular mail order catalogues selling premium products either for cash or in exchange for mileage points. Both ANA and JAL have now converted these catalogues into online malls, adding new types of merchant and product, offering a new channel for premium brands across multiple categories.

Fender flagship opens in Harajuku

Fender, the famous US guitar company, opened its first ever flagship retail store at the end of June. The new store presents Fender as the latest international luxury brand in the market and, with guitar sales growing, the timing could not be better.

Seven & I merger of FMCG arms signals focus on food

It will take a couple of years to see financial improvement but recent reforms suggest  criticism of Seven & I’s inability to change may be increasingly unfair. The latest in-group merger further demonstrates Seven & I’s desire to refocus on food and FMCG and also suggests that it may double down on its efforts to divest from non-food retailing – but not because that’s what activists want.

Gladd adds market place

Flash sales remain an important part of consumer spending in Japan but when a customer misses the flash sale, the opportunity is lost. Gladd has added a marketplace function in order to entice customers to buy even at full price.

Daimaru now top in Hokkaido

Daimaru Sapporo is one of the newest, purpose built department stores in Japan. The store has recovered well from the trials of the pandemic with sales this year likely to exceed 2019 thanks to store renovations and an extended line-up of luxury brands.

Shopping malls up 7.6% in May, JR almost at 2019 levels

Shopping malls are back, especially those in city centres and particularly buildings astride busy railway stations. Investment continues, drawing more traffic away from nearby shopping streets.

CCC to merge T Point programme with Visa Points

CCC’s T Point programme is now 40 years old and it has struggled to keep pace with more modernised retail services offered by Rakuten, Lawson and others. Even today, 75% of T Point customers still use plastic cards. In an attempt to rebuild share, T Point will merge with Sumitomo Mitsui’s V Point programme next year but, as it still lacks its own retail base, there is no clear picture of how it will expand to compete.

United Arrows aims to double sales in 10 years

United Arrows is a bellwether retailer for the premium fashion sector. Its slow initial recovery after the pandemic worried many but the last year saw a solid improvement, even if sales are still well below the peak, and plans are now in place to double sales to ¥250 billion in the next decade.

Oisix: meal kit kaizen 

Oisix Ra Daichi is by far Japan’s largest online food retailer, driven by the popularity of its fresh food and meal kit subscription services. Despite some backend problems last year, the company expects its system of continual improvement and expansion of new lines of meal kits to bring strong growth in the medium term.

Truckers call for end to free shipping

Transport industry officials want to ban ‘free shipping’, forcing customers to pay for all deliveries and even redeliveries. The aim is to reduce demand in time for new rules on driver overtime due to come into force next year. Meanwhile, Yamato has scrapped its small packet business entirely, passing customers on to Japan Post.

Growing problems for regional department stores

The imminent closure of Louis Vuitton’s 35-year old concession in Entetsu Hamamatsu is a symptom of an accelerating decline in regional department stores. Today, stores need the brands more than the brands need the stores and, as regional concessions become unattractive, more brands are likely to pull out.

FOCUS

Big gains for big retail in FY2022

Retail results for FY2022-23 are now in and a complete analysis of all major retail sectors and retailers is available below. The data shows a big improvement in performance for retailing overall, with the highest growth rates since 1990, even  if some of this growth was thanks to higher prices. Almost all categories and formats have now left the pandemic behind, although sectors that did well from Covid have retreated to some extent. 2023 already looks like being another strong year across both consumer discretionary and staples.

Retail Data: Golden May

IN BRIEF

Wealthy households to become scarcer in Japan

iStyle buys Sydney chain

Tourists at 68% of 2019 levels

Godiva Japan to open first dessert and bakery stores

Marui nearly at ¥4 trillion

anti-stealth marketing law to launch soon

Online shopping up 11% in 2022

More people moving to Shikoku

Ain set for major expansion

Sanki Shoji opens showroom popup

Amer Sports to open Arc’teryx in Ginza and Shinsaibashi

Tsuruha has another strong year

Pet market expanding strongly

Lopia opens in Fukuoka and Sendai

Hard Off erecting more stores

Aeon Mall uses robots to support tenants

Paypay postpones end of third-party credit cards

New Yodobashi Camera store in Sendai

Neil Barrett signs with Toyota

Amazon to open popup cafe

Gap to close Ginza flagship

Government to extend utility subsidies

Sogo Chiba to refurbish annex despite pending sale

New spending on child support to boost birth rates

Cainz integrates Hands with DIY format

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