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)

The growth in subscription services is a global phenomenon that has been growing just as fast in Japan as anywhere else. While most attention is given to music and media subscriptions, many brands and retailers of consumer goods are finding that the subscription model can be a key part of their online strategy, delivering multiple benefits across sales growth, customer data, marketing, inventory management and margin improvement.

The growth in subscription services is a global phenomenon that has been growing just as fast in Japan as anywhere else. While most attention is given to music and media subscriptions, many brands and retailers of consumer goods are finding that the subscription model can be a key part of their online strategy, delivering multiple benefits across sales growth, customer data, marketing, inventory management and margin improvement.

The Subscription Economy: Keeping Customers Keen While Earning Recurring Revenues

The following is a review of how physical retailers are progressing online and includes a unique ranking of the TOP 50 Online Retailers by sales, platforms sold on and growth.
Japanese retailers were famously behind peers in other markets to tackle e-commerce but many have caught up and become world class such as <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a> and <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP). </a>
More worrying for those lagging behind such as <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>, estimates suggest that online will have some role in 50% of purchasing transactions by 2025.
Despite retailers' efforts, the big three online malls, Amazon, Rakuten and Yahoo! Shopping still control half of the e-commerce market for merchandise.

The following is a review of how physical retailers are progressing online and includes a unique ranking of the TOP 50 Online Retailers by sales, platforms sold on and growth.
Japanese retailers were famously behind peers in other markets to tackle e-commerce but many have caught up and become world class such as Fast Retailing (9983 JP) and Nitori Holdings (9843 JP). 
More worrying for those lagging behind such as Seven &amp; I Holdings (3382 JP), estimates suggest that online will have some role in 50% of purchasing transactions by 2025.
Despite retailers' efforts, the big three online malls, Amazon, Rakuten and Yahoo! Shopping still control half of the e-commerce market for merchandise.

Tip of the Iceberg: Omnichannel 50% of Japan Retail in 2025

Penetration (the share of total retail sales) of e-commerce in Japan increased sharply in the past few years but still varies significantly by category.
The following insight looks at each consumer product category and how penetration has grown in the last few years and provides estimates of trends to 2025.
Even with these relatively cautious rates of growth, penetration rates are set to expand significantly in apparel, household &amp; interior, books &amp; media, and stationery but only retailers with form in successful online marketing will benefit from this with major negative implications for the many retailers that have failed to tackle the threat from online. This includes even major retailers like <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> which lags behind <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><a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a><a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">  and </a><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 the race to lead the battle for leadership in online food retailing.

Penetration (the share of total retail sales) of e-commerce in Japan increased sharply in the past few years but still varies significantly by category.
The following insight looks at each consumer product category and how penetration has grown in the last few years and provides estimates of trends to 2025.
Even with these relatively cautious rates of growth, penetration rates are set to expand significantly in apparel, household &amp; interior, books &amp; media, and stationery but only retailers with form in successful online marketing will benefit from this with major negative implications for the many retailers that have failed to tackle the threat from online. This includes even major retailers like Seven &amp; I Holdings (3382 JP) which lags behind Aeon Co Ltd (8267 JP), Rakuten Inc (4755 JP)  and Amazon.com Inc (AMZN US) in the race to lead the battle for leadership in online food retailing.

E-Commerce Penetration Increasing in All Retail Categories

Supermarkets were much better prepared for Japan’s second state of emergency compared to the first last Spring. Most now have systems in place, both to make shopping safe and quick in stores, but also to offer a robust online ordering model.There is now an opportunity for the best mid-sized chains to shine, with companies like Yaoko suggesting those customers used to ordering at the bigger online stores are switching to ordering from local chains.

Supermarkets were much better prepared for Japan’s second state of emergency compared to the first last Spring. Most now have systems in place, both to make shopping safe and quick in stores, but also to offer a robust online ordering model.There is now an opportunity for the best mid-sized chains to shine, with companies like Yaoko suggesting those customers used to ordering at the bigger online stores are switching to ordering from local chains.

2nd Emergency Means New Opportunities for Supermarkets

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. 

Japan

Oisix ra daichi Inc. sells various food products online. Among other products, the company sells vegetables, fruits, fish, meat, milk, and ready-made food.

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Oisix ra daichi (3182 JP)

The Subscription Economy: Keeping Customers Keen While Earning Recurring Revenues

Subscriptions to physical goods are rapidly becoming a popular model. In Japan, many major retailers and brands are creating subscriptions, gaining...

Michael Causton

Tip of the Iceberg: Omnichannel 50% of Japan Retail in 2025

We have compiled a unique ranking of the top 50 E-commerce retailers in Japan and provide an analysis of winners and losers among retailers now and...

Michael Causton

E-Commerce Penetration Increasing in All Retail Categories

A review of online market share in all key consumer categories in Japan, with forecasts for e-commerce market share to 2025 –the sharp growth will...

Michael Causton

2nd Emergency Means New Opportunities for Supermarkets

Japanese supermarkets suffered from genteel decline in the decade to 2020. And then Covid-19 forced everyone home, resulting in a propensity to...

Michael Causton

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

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