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)

<ul>
<li>The following is an in-depth review of the Japanese retail sector in 2021-22 and is designed to provide a complete overview for any investor in Japanese retail/consumer markets.</li>
<li>FY2021-22 proved a rebound year for retailers at the sector level. But on a company by company basis, there has been radical divergence between the best and the rest. </li>
<li>We look at the reasons for this divergence and the implications for Japanese retail and consumer firms in the years ahead.</li>
</ul>


The following is an in-depth review of the Japanese retail sector in 2021-22 and is designed to provide a complete overview for any investor in Japanese retail/consumer markets.
FY2021-22 proved a rebound year for retailers at the sector level. But on a company by company basis, there has been radical divergence between the best and the rest. 
We look at the reasons for this divergence and the implications for Japanese retail and consumer firms in the years ahead.


Japanese Retailing 2021-22: What's Really Going on and What's Next?

<ul>
<li>Department stores are desperate to get back on track, having lost both the middle class at home and travellers from overseas. </li>
<li>There have been further squeezes on the middle class in the past 18 months and the average salary in 2020 stood at ¥4.24 million, just ¥180,000 more than in 1990.
</li>
<li>As a result, department stores are in a gold rush fervour to climb back upmarket and ply their wares to the rich. The problem is so is everyone else.</li>
</ul>


Department stores are desperate to get back on track, having lost both the middle class at home and travellers from overseas. 
There have been further squeezes on the middle class in the past 18 months and the average salary in 2020 stood at ¥4.24 million, just ¥180,000 more than in 1990.

As a result, department stores are in a gold rush fervour to climb back upmarket and ply their wares to the rich. The problem is so is everyone else.


Japanese Department Stores: Going After the Newly Wealthy

Contraction in apparel consumption aside, Japanese fashion retailers and brands have made dramatic strides to pull in customers online with e-commerce sales up 24% last year according to one survey, faster than the growth in e-commerce overall. Even some wholesalers are succeeding digitally. 
What the results show is a breakthrough shift to online with likely further growth this year, taking the online channel’s share above 25% and more than 30% for many of those firms with higher online ratios.

Contraction in apparel consumption aside, Japanese fashion retailers and brands have made dramatic strides to pull in customers online with e-commerce sales up 24% last year according to one survey, faster than the growth in e-commerce overall. Even some wholesalers are succeeding digitally. 
What the results show is a breakthrough shift to online with likely further growth this year, taking the online channel’s share above 25% and more than 30% for many of those firms with higher online ratios.

FY2020 was clearly a year when department store executives would have been better to live in an induced coma. Big city stores suffered especially because inbound tourists, their main growth driver of the past few years, disappeared and local shoppers stayed away, although some stores did manage to harness support from Japan’s expanding wealth market to offset the rout a little bit. The good news is that executives pushing for change in the last five years in the face of perennial intransigence are increasingly taking charge and the result should be a leaner, smaller and more clearly defined format that is more overtly upscale.

FY2020 was clearly a year when department store executives would have been better to live in an induced coma. Big city stores suffered especially because inbound tourists, their main growth driver of the past few years, disappeared and local shoppers stayed away, although some stores did manage to harness support from Japan’s expanding wealth market to offset the rout a little bit. The good news is that executives pushing for change in the last five years in the face of perennial intransigence are increasingly taking charge and the result should be a leaner, smaller and more clearly defined format that is more overtly upscale.

Japan's Department Stores: Radical Contraction Still to Come if Sector Is to Survive

Fashion retailers continue to rely on third-party platforms, especially <a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO Inc (3092 JP),</a> 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.While there is no likelihood of direct sales taking significant share from the major online malls anytime soon, it is also true that the biggest competitive threat to the big three malls plus Zozo isn't another mall but the determination of fashion retailers and brands to wrest more control of online. On advantage they do have is experience of running retail stores and re opening more stores branded with the online shop name to increase awareness and cross-use.With one fashion retailer seeing the average annual purchase value of cross-use users 3.7 times that of store-only users, an astonishingly high difference, it is no surprise there is momentum to invest more in direct online sales.

Fashion retailers continue to rely on third-party platforms, especially ZOZO Inc (3092 JP), 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.While there is no likelihood of direct sales taking significant share from the major online malls anytime soon, it is also true that the biggest competitive threat to the big three malls plus Zozo isn't another mall but the determination of fashion retailers and brands to wrest more control of online. On advantage they do have is experience of running retail stores and re opening more stores branded with the online shop name to increase awareness and cross-use.With one fashion retailer seeing the average annual purchase value of cross-use users 3.7 times that of store-only users, an astonishingly high difference, it is no surprise there is momentum to invest more in direct online sales.

Japanese Fashion Retailers Advance Online Investment

Japan

ONWARD HOLDINGS CO., LTD. manufactures men's ready-made suits, women's, and children's wear.  The Company has its own brands, Onward and KUMIKYOKU. Onward also manufactures sports goods, books, stationery, cosmetics, art decoration.

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Onward Holdings (8016 JP)

Japanese Retailing 2021-22: What's Really Going on and What's Next?

There is increasing divergence between the winners and losers in Japanese retailing and the following in-depth review looks at performance in the...

Michael Causton

Japanese Department Stores: Going After the Newly Wealthy

Japanese department stores are waking up to the fact that the middle class is no longer their natural customer. The renewed focus on the wealthy is...

Michael Causton

Japan Online Fashion Sales Soar

Before, the boom in online was just a theory but the numbers now make it clear that Japanese consumers have shifted their spending habits,...

Michael Causton

Japan's Department Stores: Radical Contraction Still to Come if Sector Is to Survive

Japan's department stores are in trouble and were well before the pandemic but their outlook is much worse now. Major changes are required, not...

Michael Causton

Japanese Fashion Retailers Advance Online Investment

The major competitor for the major online malls in the Japanese fashion market, like Zozo and Rakuten, isn't another online mall but the growing...

Michael Causton

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