Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Thematic (Sector/Industry)

Just a month after <a href="https://www.smartkarma.com/entities/meganesuper-co-ltd" target="_blank" data-smartkarma-citation="entities:14070:1" rel="noopener">Meganesuper (3318 JP)</a> said it was switching from opening new physical stores to mobile ones, other retailers are following suit. With Covid-19 infections reaching new records in Japan in December, taking the shop to the consumers is looking like an attractive option, rather than hoping that a few might make it out to stores,  and a visiting store-in-a-truck should help less mobile customers too.

Just a month after Meganesuper (3318 JP) said it was switching from opening new physical stores to mobile ones, other retailers are following suit. With Covid-19 infections reaching new records in Japan in December, taking the shop to the consumers is looking like an attractive option, rather than hoping that a few might make it out to stores,  and a visiting store-in-a-truck should help less mobile customers too. 

In addition to more people buying food online, there has been significant growth in food discounting over the past year.Don Quijote’s efforts have led the way, boosting the sector overall by winning over more and more consumers. Development of wide ranges of generic brands that it can also put into its Asian stores is also taking the chain into a different direction.Existing discounters, notably OK Super and Lopia, are also making headway in Tokyo.

In addition to more people buying food online, there has been significant growth in food discounting over the past year.Don Quijote’s efforts have led the way, boosting the sector overall by winning over more and more consumers. Development of wide ranges of generic brands that it can also put into its Asian stores is also taking the chain into a different direction.Existing discounters, notably OK Super and Lopia, are also making headway in Tokyo.

Donki Leads Food Discounting Boom in Japan

Last year the Japanese fashion market contracted below ¥16 trillion for the first time in more than a decade and this year is proving much, much worse.In the last big crises – the 2008 financial shock and 2011 triple disasters – demand also fell dramatically and then recovered. But this time is different: as well as a fall in demand, the Covid-19 crisis has also led to a marked fall in supply.But there is some good news. Above all, Japanese are not travelling either at home or abroad and they are also eating out less.In the seven months to July, the average working household had cumulatively saved a net ¥1.25 million, more than 11 months in both 2018 and 2019 and more than an entire year before 2018.Suddenly wallets are full, which could mean more money to spend on treats – good news for luxury but also any brand or retailing offering something fun to divert from the all bleak news.While the short-term outlook remains dark, the medium-term should see both a return to a more stable trading environment and something of a splurge too as people express their relief that it’s all over.The following is a complete review of the Japanese apparel/fashion sector including rankings of the top 100 retailers by sales, top by profit, sales growth, and store openings/closures.This insight is labelled bullish because the Japanese apparel/fashion sector will rebound from the current crisis although the long-term outlook for this sector is stagnant stability rather than significant growth. However, within this, there are significant growth stocks as detailed below.

Last year the Japanese fashion market contracted below ¥16 trillion for the first time in more than a decade and this year is proving much, much worse.In the last big crises – the 2008 financial shock and 2011 triple disasters – demand also fell dramatically and then recovered. But this time is different: as well as a fall in demand, the Covid-19 crisis has also led to a marked fall in supply.But there is some good news. Above all, Japanese are not travelling either at home or abroad and they are also eating out less.In the seven months to July, the average working household had cumulatively saved a net ¥1.25 million, more than 11 months in both 2018 and 2019 and more than an entire year before 2018.Suddenly wallets are full, which could mean more money to spend on treats – good news for luxury but also any brand or retailing offering something fun to divert from the all bleak news.While the short-term outlook remains dark, the medium-term should see both a return to a more stable trading environment and something of a splurge too as people express their relief that it’s all over.The following is a complete review of the Japanese apparel/fashion sector including rankings of the top 100 retailers by sales, top by profit, sales growth, and store openings/closures.This insight is labelled bullish because the Japanese apparel/fashion sector will rebound from the current crisis although the long-term outlook for this sector is stagnant stability rather than significant growth. However, within this, there are significant growth stocks as detailed below.

Japan Fashion Retailing Complete Review 2019-20: Pain Now but a Recovery Is Certain

With Japanese shoppers still reluctant to visit stores too often, more are turning to online food shopping.This trend was already building gradually before the pandemic, but demand has grown massively in the past nine months and large and small food retailers alike are rushing to add more online capacity.The winners will be the ones able to solve the last mile problem and add some customer-centric innovations. The sector is currently led by <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a> in its partnership with <a href="https://www.smartkarma.com/entities/mitsubishi-corp" target="_blank" data-smartkarma-citation="entities:20668:1" rel="noopener">Mitsubishi Corp (8058 JP)'s </a>supermarket affiliate, <a href="https://www.smartkarma.com/entities/life-corp" target="_blank" data-smartkarma-citation="entities:1743:1" rel="noopener">Life Corp (8194 JP).</a> Others like <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a> and <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a> are also investing for the long-term and even <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> is having another go and we review the current status of all the main players below the fold.What is certain is that, with online penetration of the food retail sector still below 3%, there is plenty of share to mop up for all concerned.

With Japanese shoppers still reluctant to visit stores too often, more are turning to online food shopping.This trend was already building gradually before the pandemic, but demand has grown massively in the past nine months and large and small food retailers alike are rushing to add more online capacity.The winners will be the ones able to solve the last mile problem and add some customer-centric innovations. The sector is currently led by Amazon.com Inc (AMZN US) in its partnership with Mitsubishi Corp (8058 JP)'s supermarket affiliate, Life Corp (8194 JP). Others like Aeon Co Ltd (8267 JP) and Rakuten Inc (4755 JP) are also investing for the long-term and even Seven &amp; I Holdings (3382 JP) is having another go and we review the current status of all the main players below the fold.What is certain is that, with online penetration of the food retail sector still below 3%, there is plenty of share to mop up for all concerned.

Online Food Demand Brings New Ideas and Innovations

Lopia is a small unlisted supermarket chain but we cover this here to demonstrate the following that discount supermarkets have in Japan, pointing to further growth for listed companies in this sector such as <a href="https://www.smartkarma.com/entities/kobe-bussan-co-ltd" target="_blank" data-smartkarma-citation="entities:4701:1" rel="noopener">Kobe Bussan (3038 JP),</a> <a href="https://www.smartkarma.com/entities/pan-pacific-international-holdings-corporation" target="_blank" data-smartkarma-citation="entities:13475:1" rel="noopener">Pan Pacific International Holdings (7532 JP),</a> and <a href="https://www.smartkarma.com/entities/cosmos-pharmaceutical-corp" target="_blank" data-smartkarma-citation="entities:3797:1" rel="noopener">Cosmos Pharmaceutical (3349 JP).</a>
With average sales growth of 18% a year since 2011, Lopia is a rising star. Alongside OK Super, another unlisted chain, Lopia has proven that aggressive and consistent low prices work in Japan, and that careful cost control can provide profits even at low margins. It is a chain to watch as it is likely to list at some point, with a target of ¥1 trillion sales by the end of the next decade.
Its success is also a worry for <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a>. Aeon has seen its share of food sales in the greater Tokyo region fall from 10.8% to 9.7%, overtaken by OK Super which increased from 8% to 10.9%, a jump of 2.9 points. Lopia is half the size of OK Super but has also grown from 1.2% to 2.9% in the same period, more than doubling its effective share. Aeon is <a href="https://www.smartkarma.com/insights/new-aeon-style-format-shows-hope-for-aeon-s-core-business" target="_blank" rel="noopener">fighting back</a> but still does not compete on price.

Lopia is a small unlisted supermarket chain but we cover this here to demonstrate the following that discount supermarkets have in Japan, pointing to further growth for listed companies in this sector such as Kobe Bussan (3038 JP), Pan Pacific International Holdings (7532 JP), and Cosmos Pharmaceutical (3349 JP).
With average sales growth of 18% a year since 2011, Lopia is a rising star. Alongside OK Super, another unlisted chain, Lopia has proven that aggressive and consistent low prices work in Japan, and that careful cost control can provide profits even at low margins. It is a chain to watch as it is likely to list at some point, with a target of ¥1 trillion sales by the end of the next decade.
Its success is also a worry for Aeon Co Ltd (8267 JP). Aeon has seen its share of food sales in the greater Tokyo region fall from 10.8% to 9.7%, overtaken by OK Super which increased from 8% to 10.9%, a jump of 2.9 points. Lopia is half the size of OK Super but has also grown from 1.2% to 2.9% in the same period, more than doubling its effective share. Aeon is fighting back but still does not compete on price.

Why Discount Works in Japan: Lopia, Tokyo’s ‘Low Price Utopia’ Triples Sales Since 2011

Japan

AEON CO., LTD. operates general merchandise stores, supermarkets, and convenience stores throughout Japan. The Company is also engaged in women's and casual clothing store business, development business of commercial property, and financing service through the subsidiaries.

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Aeon Co Ltd (8267 JP)

Mobile Shops and Flexible Delivery

Mobile stores are an increasing phenomenon in Japan. They are a solution to Japan's ageing population but also allow retailers to take their wares...

Michael Causton

Donki Leads Food Discounting Boom in Japan

Mainstream supermarkets had a good 2020 but so did the discounters, led by Don Quijote. Their expansion is a threat to full price supermarkets as...

Michael Causton

Japan Fashion Retailing Complete Review 2019-20: Pain Now but a Recovery Is Certain

The following is a complete, in-depth review of the Japanese apparel/fashion sector covering key trends, rankings of the top 100 by sales and top...

Michael Causton

Online Food Demand Brings New Ideas and Innovations

E-commerce has less than 3% share of food retailing in Japan but this is about to change and fast. Amazon/Life is leading but Aeon, Rakuten and...

Michael Causton

Why Discount Works in Japan: Lopia, Tokyo’s ‘Low Price Utopia’ Triples Sales Since 2011

The low price food market is booming in Japan but still doesn't get the recognition it deserves. As well as listed firms, we highlight the unlisted...

Michael Causton

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