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. 

Event-Driven

The Japanese sports retail market has traditionally been dominated by four big retailers, <a href="https://www.smartkarma.com/entities/alpen-co-ltd" target="_blank" data-smartkarma-citation="entities:17762:1" rel="noopener">Alpen Co Ltd (3028 JP)</a>, <a href="https://www.smartkarma.com/entities/xebio-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:13955:1" rel="noopener">Xebio Holdings (8281 JP)</a>, Mega Sports (owned by <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> and <a href="https://www.smartkarma.com/entities/himaraya-co-ltd" target="_blank" data-smartkarma-citation="entities:5307:1" rel="noopener">Himaraya Co Ltd (7514 JP)</a>. With <a href="https://www.smartkarma.com/entities/mitsubishi-corp" target="_blank" data-smartkarma-citation="entities:20668:1" rel="noopener">Mitsubishi Corp (8058 JP)'s</a> financial and supply chain support, Himaraya overtook Mega Sports a few years ago but Himaraya’s sales have since contracted and Mitsubishi gradually reduced its stake while still retaining its core supply role.Mitsubishi will now divest all shares and end its supply relationship too, leaving Himaraya open to takeover.Given that sports/outdoor is one of the few sure growth markets, Himaraya won’t lack for potential suitors.This is a time of transition for the big multi-brand sports retailers. The number of stores increased up to 2018 but last year the total number of stores began to contract for the first time since 1990 with new competitors emerging, including <a href="https://www.smartkarma.com/entities/workman-co-ltd" target="_blank" data-smartkarma-citation="entities:8467:1" rel="noopener">Workman Co Ltd (7564 JP)</a> and Decathlon.

The Japanese sports retail market has traditionally been dominated by four big retailers, Alpen Co Ltd (3028 JP), Xebio Holdings (8281 JP), Mega Sports (owned by Aeon Co Ltd (8267 JP)) and Himaraya Co Ltd (7514 JP). With Mitsubishi Corp (8058 JP)'s financial and supply chain support, Himaraya overtook Mega Sports a few years ago but Himaraya’s sales have since contracted and Mitsubishi gradually reduced its stake while still retaining its core supply role.Mitsubishi will now divest all shares and end its supply relationship too, leaving Himaraya open to takeover.Given that sports/outdoor is one of the few sure growth markets, Himaraya won’t lack for potential suitors.This is a time of transition for the big multi-brand sports retailers. The number of stores increased up to 2018 but last year the total number of stores began to contract for the first time since 1990 with new competitors emerging, including Workman Co Ltd (7564 JP) and Decathlon.

Japan Sports Retail in Flux as Mitsubishi Ditches Himaraya

Equity Bottom-Up

Muji’s US bankruptcy and poor trading in Europe, along with weaker sales at home, led to <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>’s first revenue decline in a decade and the first loss in 19 years. Growth in Asia and the promise of significant growth in the food category – an idea we are very bullish about – suggest hope for a rebound next year.

Muji’s US bankruptcy and poor trading in Europe, along with weaker sales at home, led to Ryohin Keikaku (7453 JP)’s first revenue decline in a decade and the first loss in 19 years. Growth in Asia and the promise of significant growth in the food category – an idea we are very bullish about – suggest hope for a rebound next year.

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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.

Thematic (Sector/Industry)

<a href="https://asia.nikkei.com/Business/Energy/Japan-taps-Australia-and-Brunei-for-hydrogen-import-goal" target="_blank" rel="noopener">Momentum is building within East Asia to propel the Hydrogen economy forward</a> as Japan, Korea and China have demonstrated interest in investing heavily in the technology, a call that is being answered by a variety of players through the supply chain. We examine below the key investment opportunities and timelines for these players.

Momentum is building within East Asia to propel the Hydrogen economy forward as Japan, Korea and China have demonstrated interest in investing heavily in the technology, a call that is being answered by a variety of players through the supply chain. We examine below the key investment opportunities and timelines for these players.

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<a href="https://www.smartkarma.com/entities/wal-mart-stores-inc" target="_blank" data-smartkarma-citation="entities:11134:1" rel="noopener">Wal Mart Stores (WMT US)</a> will sell 85% of its stake in Seiyu, the Japanese general merchandise store (GMS) chain to <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a> and <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP). </a>
This ends Walmart's original plans to relist its Japanese business and confirming widespread speculation that it has been trying to sell off its 330-store Japanese operation after 17 years of trying to turn the business around. The purchase price is a reported ¥172.5 billion, considerably less than the ¥441 billion Walmart paid for the business in 2007.
The deal is a win for KKR of course, but much more interestingly, is a huge win for Rakuten. We previously suggested <a href="https://www.smartkarma.com/insights/walmart-will-relist-japan-unit-soon-and-at-last-has-potential-to-grow-but-only-online" target="_blank" rel="noopener">in this Insight</a> that should the Walmart/Rakuten deal not grow fast enough, Rakuten would be a natural acquirer of the Seiyu business and this has turned out to be true – and for good strategic reasons.
</div><div>
As described before <a href="https://www.smartkarma.com/insights/online-food-demand-brings-new-ideas-and-innovations" target="_blank" rel="noopener">here</a> and <a href="https://www.smartkarma.com/insights/online-food-boom-rakuten-walmart-alliance-goes-live" target="_blank" rel="noopener">here</a>, the Japanese online food market is only just beginning to boom (penetration of food retail by online is still less than 3%) and many of the key players are jockeying for position, led by <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 a joint venture with <a href="https://www.smartkarma.com/entities/life-corp" target="_blank" data-smartkarma-citation="entities:1743:1" rel="noopener">Life Corp (8194 JP).</a> 
If Rakuten can begin to properly exploit Seiyu's physical store presence to quickly build out a nationwide online food delivery business, it should rapidly become one of the leaders in this fast-expanding market. And given how important the food/FMCG category is, leadership in food e-commerce equals leadership in BtoC e-commerce overall.
</div>


Wal Mart Stores (WMT US) will sell 85% of its stake in Seiyu, the Japanese general merchandise store (GMS) chain to KKR &amp; Co Inc (KKR US) and Rakuten Inc (4755 JP). 
This ends Walmart's original plans to relist its Japanese business and confirming widespread speculation that it has been trying to sell off its 330-store Japanese operation after 17 years of trying to turn the business around. The purchase price is a reported ¥172.5 billion, considerably less than the ¥441 billion Walmart paid for the business in 2007.
The deal is a win for KKR of course, but much more interestingly, is a huge win for Rakuten. We previously suggested in this Insight that should the Walmart/Rakuten deal not grow fast enough, Rakuten would be a natural acquirer of the Seiyu business and this has turned out to be true – and for good strategic reasons.

As described before here and here, the Japanese online food market is only just beginning to boom (penetration of food retail by online is still less than 3%) and many of the key players are jockeying for position, led by Amazon.com Inc (AMZN US) in a joint venture with Life Corp (8194 JP). 
If Rakuten can begin to properly exploit Seiyu's physical store presence to quickly build out a nationwide online food delivery business, it should rapidly become one of the leaders in this fast-expanding market. And given how important the food/FMCG category is, leadership in food e-commerce equals leadership in BtoC e-commerce overall.


The Walmart Japan Sell Off: A Huge Gain for Rakuten

The convenience store sector (CVS) is Japan’s most successful retail format and one that has now enjoyed almost 50 years of growth. So the sudden and unprecedented sales declines in 2020, caused by so many people staying away from city centres during the pandemic, are an entirely new test for the sector.Temporary blips aside, this leading position is likely to endure a little longer. Even with e-commerce growing faster and likely to over take CVS as the biggest channel by 2025, CVS will take on a prominent role in the fulfilment model used by many e-commerce companies.In the CVS sector itself, Familymart's delisting and new role spearheading Itochu's retail interests will cause ructions in a sector that has reached saturation and where increased competition will force more change and differentiation.The following is an in-depth review of the state of play in Japan's convenience store sector following the absorption of <a href="https://www.smartkarma.com/entities/familymart-co-ltd" target="_blank" data-smartkarma-citation="entities:320:1" rel="noopener">FamilyMart Co Ltd (8028 JP)</a> by <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a>. The review includes:<ul>
<li>Full rankings of all convenience stores including sales, stores, market share, key metrics like sales per store per day etc.</li>
<li>Analysis of the current and future prospects of the big three and the outlook for the smaller players – as much targets for the big three than anything else.</li>
<li>Details on e-commerce initiatives (or the lack of them), store coverage, diversification strategies etc.</li>
<li>Updates on the pressure points of the labour shortage and franchisee rebellions.</li>
</ul>This insight provides a complete review of the sector and a clear picture of where convenience stores are headed in the next three years.

The convenience store sector (CVS) is Japan’s most successful retail format and one that has now enjoyed almost 50 years of growth. So the sudden and unprecedented sales declines in 2020, caused by so many people staying away from city centres during the pandemic, are an entirely new test for the sector.Temporary blips aside, this leading position is likely to endure a little longer. Even with e-commerce growing faster and likely to over take CVS as the biggest channel by 2025, CVS will take on a prominent role in the fulfilment model used by many e-commerce companies.In the CVS sector itself, Familymart's delisting and new role spearheading Itochu's retail interests will cause ructions in a sector that has reached saturation and where increased competition will force more change and differentiation.The following is an in-depth review of the state of play in Japan's convenience store sector following the absorption of FamilyMart Co Ltd (8028 JP) by Itochu Corp (8001 JP). The review includes:
Full rankings of all convenience stores including sales, stores, market share, key metrics like sales per store per day etc.
Analysis of the current and future prospects of the big three and the outlook for the smaller players – as much targets for the big three than anything else.
Details on e-commerce initiatives (or the lack of them), store coverage, diversification strategies etc.
Updates on the pressure points of the labour shortage and franchisee rebellions.
This insight provides a complete review of the sector and a clear picture of where convenience stores are headed in the next three years.

Convenience Stores: Diversification and a Fight for Share as Familymart Delists

Japan

Mitsubishi Corporation is a general trading company.  The Company has business groups such as New Business Initiatives, IT & Electronics, Fuels, Metals, Machinery, Chemicals, Living Essentials, and Professional Services.  Mitsubishi diversifies by satellite communications through a joint venture.

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Mitsubishi Corp (8058 JP)

Japan Sports Retail in Flux as Mitsubishi Ditches Himaraya

Mitsubishi will divest its long-standing holding in sports retailer, Himaraya. With the sports retail market in flux, Himaraya is a likely target...

Michael Causton

Muji Leaks Red After Tough Summer

Ryohin Keikaku (Muji) had a tough six months from March but its plans to grow food sales from around 6% to 30% of sales along with expansion in...

Michael Causton

Asia’s Hydrogen Economy

China's increasing favour towards hydrogen is starting to generate investor interest in potential hydrogen economy and FCV plays. We examine...

Mio Kato

The Walmart Japan Sell Off: A Huge Gain for Rakuten

We predicted the sale of Seiyu by Walmart to Rakuten and this is now happening (with KKR funding). It is a huge step for Rakuten in the war for...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan Sports Retail in Flux as Mitsubishi Ditches Himaraya

Mitsubishi will divest its long-standing holding in sports retailer, Himaraya. With the sports retail market in flux, Himaraya is a likely target...

Michael Causton

Muji Leaks Red After Tough Summer

Ryohin Keikaku (Muji) had a tough six months from March but its plans to grow food sales from around 6% to 30% of sales along with expansion in...

Michael Causton

Asia’s Hydrogen Economy

China's increasing favour towards hydrogen is starting to generate investor interest in potential hydrogen economy and FCV plays. We examine...

Mio Kato

The Walmart Japan Sell Off: A Huge Gain for Rakuten

We predicted the sale of Seiyu by Walmart to Rakuten and this is now happening (with KKR funding). It is a huge step for Rakuten in the war for...

Michael Causton

Convenience Stores: Diversification and a Fight for Share as Familymart Delists

If you are looking for a full in-depth review and analysis of Japan's convenience stores sector and how things will shape up now that Familymart is...

Michael Causton