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)

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

Equity Bottom-Up

Tokushimaru started as a local mobile supermarket in Shikoku but, since being made a subsidiary of <a href="https://www.smartkarma.com/entities/oisix-ra-daichi-inc" target="_blank" data-smartkarma-citation="entities:10145:1" rel="noopener">Oisix ra daichi (3182 JP)</a> in 2016, has become a nationwide network of vans franchised by a growing number of supermarkets.Almost all of its customers are elderly – Japan's fastest growing population segment – and it takes pride in serving communities.Now, with <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> Ito-Yokado planning to add most of its store network to the system, Tokushimaru will grow even faster.There are currently around 700 Tokushimaru vans in operation and it expects to hit 1,000 this Spring, with a long-term goal of 5,000.As reported <a href="https://www.smartkarma.com/insights/mobile-shops-and-flexible-delivery" target="_blank" rel="noopener">before on Smartkarma</a>, shops-on-wheels is becoming a major new trend as retailers seek out customers where they are rather than waiting for them to come to their stores.

Tokushimaru started as a local mobile supermarket in Shikoku but, since being made a subsidiary of Oisix ra daichi (3182 JP) in 2016, has become a nationwide network of vans franchised by a growing number of supermarkets.Almost all of its customers are elderly – Japan's fastest growing population segment – and it takes pride in serving communities.Now, with Seven &amp; I Holdings' (3382 JP) Ito-Yokado planning to add most of its store network to the system, Tokushimaru will grow even faster.There are currently around 700 Tokushimaru vans in operation and it expects to hit 1,000 this Spring, with a long-term goal of 5,000.As reported before on Smartkarma, shops-on-wheels is becoming a major new trend as retailers seek out customers where they are rather than waiting for them to come to their stores. 

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. 

<a href="https://www.smartkarma.com/entities/yaoko-co-ltd" target="_blank" data-smartkarma-citation="entities:1419:1" rel="noopener">Yaoko Co Ltd (8279 JP)</a> will again post record revenues and profit for FY2020 to March next year, but the top supermarket is worried that FY2021 will see a reversal of its fortunes.A boom in fresh food retailing is one of the few positives to emerge out of the Covid crisis, but with no end in sight, shoppers are beginning to stay away.It is one of the few supermarkets with the financial strength to weather an extended downturn, but even Yaoko is preparing for harder times.Despite good financial performance so far this year, Yaoko’s caution is typical of the company and one reason why it leads the sector on so many measures. It has a breakeven point ratio of 84.9%, meaning that it can afford to see sales drop as much as 15.1% before it falls into the red in relation to operating costs.

Yaoko Co Ltd (8279 JP) will again post record revenues and profit for FY2020 to March next year, but the top supermarket is worried that FY2021 will see a reversal of its fortunes.A boom in fresh food retailing is one of the few positives to emerge out of the Covid crisis, but with no end in sight, shoppers are beginning to stay away.It is one of the few supermarkets with the financial strength to weather an extended downturn, but even Yaoko is preparing for harder times.Despite good financial performance so far this year, Yaoko’s caution is typical of the company and one reason why it leads the sector on so many measures. It has a breakeven point ratio of 84.9%, meaning that it can afford to see sales drop as much as 15.1% before it falls into the red in relation to operating costs.

Yaoko: A Difficult 2021 Coming for Japanese Supermarkets

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)

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

Tokushimaru: Oisix's Mobile Super Star

Shops-on-wheels is coming of age in Japan. Oisix is leading the charge through its Tokushimaru subsidiary which also happens to target Japan's...

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

Yaoko: A Difficult 2021 Coming for Japanese Supermarkets

Yaoko is one of the best managed supermarkets in Japan but even this leading retailer is worried about the outlook for Japanese supermarkets. If it...

Michael Causton

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