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. 

Equity Bottom-Up

<div class="content-highlight"><p>There is already some good coverage on <a href="https://www.smartkarma.com/entities/18379" target="_blank" data-smartkarma-citation="entities:18379:1">Start Today (3092 JP)</a> (Zozo) from Chacko Jacob and Mio Kato at Lightstream Research <a href="https://www.smartkarma.com/insights/start-today-3092-jp-calling-the-bluff-on-forecasted-growth" target="_blank">here</a> and <a href="https://www.smartkarma.com/entities/start-today-co-ltd/insights" target="_blank">here</a> but below we review Start Today's expansion plans and whether it has the experience to deliver this, and if it is enough to counter existing and future competition from both apparel chains and other online competitors.</p></div><ul class=""><li>Start Today will soon be called Zozo, reflecting the growing power of the brand and its Zozotown online fashion mall.</li><li>That brand value is now about to be unlocked in an ambitious expansion of the Zozo private label business, with the online retailer expecting to hit ¥200 billion in sales in three years, underpinning an ambitious target for group transactions of ¥715 billion in the same time frame.</li><li>This, however, is just the next step in CEO Yusaku Maezawa’s aim to become a ¥5 trillion retailer within a decade and one of the top 10 apparel retailers in the world.</li><li>These are grand plans, and somewhat characteristic of Start Today's CEO, Yusaku Maezawa who, like Fast Retailing's Tadashi Yanai, uses company forecasts as much as team rallying cry as realistic target. Yet there are reasons to think that the Zozo brand could scale quickly and very profitably – but only if the online fashion retailer can learn about supply chain management fast, and face off significant competition from other online malls like <a href="https://www.smartkarma.com/entities/409" target="_blank" data-smartkarma-citation="entities:409:1">Amazon.com (AMZN US)</a>, and physical retailers.</li></ul>

There is already some good coverage on Start Today (3092 JP) (Zozo) from Chacko Jacob and Mio Kato at Lightstream Research here and here but below we review Start Today's expansion plans and whether it has the experience to deliver this, and if it is enough to counter existing and future competition from both apparel chains and other online competitors.Start Today will soon be called Zozo, reflecting the growing power of the brand and its Zozotown online fashion mall.That brand value is now about to be unlocked in an ambitious expansion of the Zozo private label business, with the online retailer expecting to hit ¥200 billion in sales in three years, underpinning an ambitious target for group transactions of ¥715 billion in the same time frame.This, however, is just the next step in CEO Yusaku Maezawa’s aim to become a ¥5 trillion retailer within a decade and one of the top 10 apparel retailers in the world.These are grand plans, and somewhat characteristic of Start Today's CEO, Yusaku Maezawa who, like Fast Retailing's Tadashi Yanai, uses company forecasts as much as team rallying cry as realistic target. Yet there are reasons to think that the Zozo brand could scale quickly and very profitably – but only if the online fashion retailer can learn about supply chain management fast, and face off significant competition from other online malls like Amazon.com (AMZN US), and physical retailers.

Zozo: A ¥700 Billion Business in Three Years. Really?

Thematic (Sector/Industry)

<ul><li>Our recent post on e-commerce (<a href="https://www.smartkarma.com/insights/e-commerce-in-japan-2017-2022-relentless-expansion-means-upheaval-in-consumer-goods-distribution" target="_blank" data-smartkarma-citation="insights:19667">E-Commerce in Japan 2017-2022: Relentless Expansion Means Upheaval in Consumer Goods Distribution</a>) showed just how rapidly the channel is growing in Japan. One of the main drivers of this growth has been fashion, with apparel the biggest category overall by value and one of the top two fastest growing categories for the last five years.</li><li>Even then e-commerce still only accounts for around 11% of the total value of the apparel market, compared to around 30% for consumer electronics.</li><li>In addition, fashion retailers and brands have a very mixed record when it comes to grasping the opportunities and threats of what is already Japan’s biggest distribution channel, meaning most apparel firms sell through the big malls that dominate the market – a factor that has driven the growth in the share price of companies like <a href="https://www.smartkarma.com/entities/18379" target="_blank" data-smartkarma-citation="entities:18379:1">Start Today Co Ltd (3092 JP)</a> and <a href="https://www.smartkarma.com/entities/31" target="_blank" data-smartkarma-citation="entities:31:1">Rakuten Inc (4755 JP)</a> over the last decade.<span class="Apple-converted-space"> </span></li><li>Some retailers, though, are trying to wrest back control and share from the big malls, giving rise to some speculation that the latter will soon see their 55% share of the market start to fall.</li><li>At the same time, expanding direct online sales should help to boost the operating margins of leading fashion retailers like <a href="https://www.smartkarma.com/entities/751" target="_blank" data-smartkarma-citation="entities:751:1">Fast Retailing Co Ltd (9983 JP)</a>, <a href="https://www.smartkarma.com/entities/4887" target="_blank" data-smartkarma-citation="entities:4887:1">United Arrows Ltd (7606 JP)</a>, <a href="https://www.smartkarma.com/entities/11895" target="_blank" data-smartkarma-citation="entities:11895:1">Adastria Co Ltd (2685 JP)</a> and <a href="https://www.smartkarma.com/entities/23991" target="_blank" data-smartkarma-citation="entities:23991:1">Tokyo Base Co Ltd (3415 JP)</a>.</li></ul>

Our recent post on e-commerce (E-Commerce in Japan 2017-2022: Relentless Expansion Means Upheaval in Consumer Goods Distribution) showed just how rapidly the channel is growing in Japan. One of the main drivers of this growth has been fashion, with apparel the biggest category overall by value and one of the top two fastest growing categories for the last five years.Even then e-commerce still only accounts for around 11% of the total value of the apparel market, compared to around 30% for consumer electronics.In addition, fashion retailers and brands have a very mixed record when it comes to grasping the opportunities and threats of what is already Japan’s biggest distribution channel, meaning most apparel firms sell through the big malls that dominate the market – a factor that has driven the growth in the share price of companies like Start Today Co Ltd (3092 JP) and Rakuten Inc (4755 JP) over the last decade. Some retailers, though, are trying to wrest back control and share from the big malls, giving rise to some speculation that the latter will soon see their 55% share of the market start to fall.At the same time, expanding direct online sales should help to boost the operating margins of leading fashion retailers like Fast Retailing Co Ltd (9983 JP), United Arrows Ltd (7606 JP), Adastria Co Ltd (2685 JP) and Tokyo Base Co Ltd (3415 JP).

Fashion: Still the Biggest Japanese E-Commerce Category – and Still Growing Fast

Japan

KONAKA CO., LTD. operates a men's suits store chain based in Yokohama. The Company has its own brand name JOHN PEARSE.  The Company also operates jeans and casual wear store chain named BALBO.

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Konaka Co Ltd (7494 JP)

Zozo: A ¥700 Billion Business in Three Years. Really?

There is already some good coverage on Start Today (3092 JP) (Zozo) from Chacko Jacob and Mio Kato at Lightstream Research here and here but below...

Michael Causton

Fashion: Still the Biggest Japanese E-Commerce Category – and Still Growing Fast

Our recent post on e-commerce (E-Commerce in Japan 2017-2022: Relentless Expansion Means Upheaval in Consumer Goods Distribution) showed just how...

Michael Causton

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