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 desire for home improvement was already building well before the pandemic but Japanese have turned to home decoration like never before since March 2020 as long days at home led to demand for more comfort and better aesthetics. With visits to physical stores currently something of a challenge, online sources have boomed, including new subscription rental services. While <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> is a beneficiary of this trend, competitors have also seen sharp gains in volume, suggesting further new competition for the dominant player. Lowya for example is now expecting compound annual growth (CAGR) of between 21-26% over the next five years, with a forecast ¥60 billion in GTVs in 2026.

The desire for home improvement was already building well before the pandemic but Japanese have turned to home decoration like never before since March 2020 as long days at home led to demand for more comfort and better aesthetics. With visits to physical stores currently something of a challenge, online sources have boomed, including new subscription rental services. While Nitori Holdings (9843 JP) is a beneficiary of this trend, competitors have also seen sharp gains in volume, suggesting further new competition for the dominant player. Lowya for example is now expecting compound annual growth (CAGR) of between 21-26% over the next five years, with a forecast ¥60 billion in GTVs in 2026.

Competition for Nitori: Online Furniture Sales Surge

The following is an in-depth review of Japanese retail in the last 18 months covering all the main formats and categories, providing a quick way to see an overview of all the key trends and winners and losers in Japanese retailing now and going forward.FY2020 was an anomaly and one that businesses everywhere will want to forget and never repeat. There was more than enough pain among Japan’s top retailers last year, but equally some formats did surprisingly well given the circumstances.For most, work-from-home was the single most important factor in determining a chain’s fortunes. City-centre stores and shopping centres offering mostly discretionary shopping have been hit hard, as have convenience stores.But those chains selling essentials, healthcare, electronics and, most importantly, food, all saw their fortunes improve. The pandemic has also revealed the strong, dynamic players and exposed the weaker ones. Oh, and everyone needs to be online.

The following is an in-depth review of Japanese retail in the last 18 months covering all the main formats and categories, providing a quick way to see an overview of all the key trends and winners and losers in Japanese retailing now and going forward.FY2020 was an anomaly and one that businesses everywhere will want to forget and never repeat. There was more than enough pain among Japan’s top retailers last year, but equally some formats did surprisingly well given the circumstances.For most, work-from-home was the single most important factor in determining a chain’s fortunes. City-centre stores and shopping centres offering mostly discretionary shopping have been hit hard, as have convenience stores.But those chains selling essentials, healthcare, electronics and, most importantly, food, all saw their fortunes improve. The pandemic has also revealed the strong, dynamic players and exposed the weaker ones. Oh, and everyone needs to be online.

The Polarising Pandemic in Japanese Retail

The latest Census in Japan confirms the ongoing fall in total population across most of the country but reveals surprising growth markets in small pockets, particularly around Greater Tokyo which now accounts for just under 30% of the total population.There are also ever growing numbers of single people, expanding the promising solo market. In the bigger cities, younger people bring new types of consumption but the increase in older singles is a growing problem.The following provides background macro trends for any investor looking at the Japan consumer space and some stocks we think will benefit from these macro trends.

The latest Census in Japan confirms the ongoing fall in total population across most of the country but reveals surprising growth markets in small pockets, particularly around Greater Tokyo which now accounts for just under 30% of the total population.There are also ever growing numbers of single people, expanding the promising solo market. In the bigger cities, younger people bring new types of consumption but the increase in older singles is a growing problem.The following provides background macro trends for any investor looking at the Japan consumer space and some stocks we think will benefit from these macro trends.

Shrinking, Ageing Japan but a Growing Solo Market

Home decoration consumption has been one of the few non-essential consumption categories to show consistent positive growth in the last few years. All types of brand and retailer have benefited but, since the start of the pandemic, it has been online stores and mass market retailers like <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><a href="https://www.smartkarma.com/entities/ryohin-keikaku-co-ltd" target="_blank" data-smartkarma-citation="entities:2765:1" rel="noopener">Ryohin Keikaku (7453 JP)</a> and the home centre retailers that have performed best. The boost from Covid aside, increased spending on home decoration is a long-term trend, supporting further growth for the leading retailers well into the future.

Home decoration consumption has been one of the few non-essential consumption categories to show consistent positive growth in the last few years. All types of brand and retailer have benefited but, since the start of the pandemic, it has been online stores and mass market retailers like Nitori Holdings (9843 JP),Ryohin Keikaku (7453 JP) and the home centre retailers that have performed best. The boost from Covid aside, increased spending on home decoration is a long-term trend, supporting further growth for the leading retailers well into the future. 

Japanese Interiors Market Reaches Record High Boosting Nitori, Muji and Others

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

• LARGE CAP RESULTS - 14th APRIL •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/200/635/original/image_32488738921618434736177.png?1618434737" class="editor-image img-responsive" data-smartkarma-image-id="200635"></figure><div class="content-caption">Source for all charts &amp; tables: Japan Analytics</div>RESULTS - The percentage of positive Results Scores continues to fall, with only 39% of the 116 results reported on Wednesday. There were only three positives among large caps, including <a href="https://www.smartkarma.com/entities/ryohin-keikaku-co-ltd" target="_blank" data-smartkarma-citation="entities:2765:1" rel="noopener">Ryohin Keikaku (7453 JP)</a>, which has changed its year-end limiting comparability. There was no revision to the company's now six-month-old forecasts. Shoe retailer <a href="https://www.smartkarma.com/entities/abc-mart-inc" target="_blank" data-smartkarma-citation="entities:3213:1" rel="noopener">ABC Mart (2670 JP)</a> fared less well but is optimistic about FY22.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/200/644/original/image_16911018231618435000838.png?1618435002" class="editor-image img-responsive" data-smartkarma-image-id="200644"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/200/646/original/image_24286058841618435028922.png?1618435030" class="editor-image img-responsive" data-smartkarma-image-id="200646"></figure>• LARGE CAP FORECASTS/REVISIONS - 14th APRIL •<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/200/649/original/image_3948594651618435133716.png?1618435135" class="editor-image img-responsive" data-smartkarma-image-id="200649"></figure>REVISIONS/FORECASTS - Bullishness abounds for FY22, particularly amongst the many Restaurant Sector companies, of which coffee house <a href="https://www.smartkarma.com/entities/doutor-nichires-holdings-co" target="_blank" data-smartkarma-citation="entities:3096:1" rel="noopener">Doutor Nichires (3087 JP) </a>would be our value pick. Erstwhile E-Commerce darling <a href="https://www.smartkarma.com/entities/kitanotatsujin-corp" target="_blank" data-smartkarma-citation="entities:6126:1" rel="noopener">Kitanotatsujin (2930 JP)</a> was the only negatively-scoring large-cap, foreseeing yet more margin erosion. The shares remain overvalued at 36 EV/TTM OP.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/200/652/original/image_67668075561618435352425.png?1618435353" class="editor-image img-responsive" data-smartkarma-image-id="200652"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/200/655/original/image_87740698871618435386254.png?1618435387" class="editor-image img-responsive" data-smartkarma-image-id="200655"></figure>

• LARGE CAP RESULTS - 14th APRIL •Source for all charts &amp; tables: Japan AnalyticsRESULTS - The percentage of positive Results Scores continues to fall, with only 39% of the 116 results reported on Wednesday. There were only three positives among large caps, including Ryohin Keikaku (7453 JP), which has changed its year-end limiting comparability. There was no revision to the company's now six-month-old forecasts. Shoe retailer ABC Mart (2670 JP) fared less well but is optimistic about FY22.• LARGE CAP FORECASTS/REVISIONS - 14th APRIL •REVISIONS/FORECASTS - Bullishness abounds for FY22, particularly amongst the many Restaurant Sector companies, of which coffee house Doutor Nichires (3087 JP) would be our value pick. Erstwhile E-Commerce darling Kitanotatsujin (2930 JP) was the only negatively-scoring large-cap, foreseeing yet more margin erosion. The shares remain overvalued at 36 EV/TTM OP.

🇯🇵 JAPAN • Results & Revisions 04/​​​​​​​14 - Finding Value in ABC-MART & Doutor Nichires

Japan

RYOHIN KEIKAKU CO., LTD. is a retailer and wholesaler of Mujirushi Ryohin brand products, which were originally a generic private-brand product.  The Company's product line includes knitwear, food, and household items

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Ryohin Keikaku (7453 JP)

Competition for Nitori: Online Furniture Sales Surge

Nitori remains number one by far and its own e-commerce site is doing well but other online-only stores have seen fast growth, creating new forms...

Michael Causton

The Polarising Pandemic in Japanese Retail

A complete review of the Japanese retail sector in the last 18 months, format by format, category by category, providing key trends and winners &...

Michael Causton

Shrinking, Ageing Japan but a Growing Solo Market

Japan's population is contracting but there are areas of growth, particularly the solo market (single people living alone) and the senior market....

Michael Causton

Japanese Interiors Market Reaches Record High Boosting Nitori, Muji and Others

The big home interiors retailers like Nitori and Muji as well as the home centre chains are doing well thanks to the expansion of the home decor...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 04/14 - Finding Value in ABC-MART & Doutor Nichires

RESULTS - The percentage of positive Results Scores continues to fall, with only 39% of the 116 results reported on Wednesday.

Campbell Gunn

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52-week Range

Market Cap (USDm)

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Competition for Nitori: Online Furniture Sales Surge

Nitori remains number one by far and its own e-commerce site is doing well but other online-only stores have seen fast growth, creating new forms...

Michael Causton

The Polarising Pandemic in Japanese Retail

A complete review of the Japanese retail sector in the last 18 months, format by format, category by category, providing key trends and winners &...

Michael Causton

Shrinking, Ageing Japan but a Growing Solo Market

Japan's population is contracting but there are areas of growth, particularly the solo market (single people living alone) and the senior market....

Michael Causton

Japanese Interiors Market Reaches Record High Boosting Nitori, Muji and Others

The big home interiors retailers like Nitori and Muji as well as the home centre chains are doing well thanks to the expansion of the home decor...

Michael Causton

🇯🇵 JAPAN • Results & Revisions 04/​​​​​​​14 - Finding Value in ABC-MART & Doutor Nichires

RESULTS - The percentage of positive Results Scores continues to fall, with only 39% of the 116 results reported on Wednesday.

Campbell Gunn

🇯🇵 JAPAN • Results & Revisions 04/14 - Finding Value in ABC-MART & Doutor Nichires