Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS.  Hawkish Fed Pause is Powell telegraphs +50bps hikes this year; SPX flat with most Sectors in the Red; PPI comfort as shows inflation declining; NVIDIA on the roll Again</li>
<li>JAPAN. NKY Futs +0.3% vs Cash;  Positive earning revisions driving NKY;  Investors Cheer Toyotas revamped EV strategy + votes back in board; Oasis tgts Tsuruha board; Slow Uniqlo China momentum</li>
<li>NUGGET. The Japan Renewables(+Nuclear) Opportunity. Japan is lagging in it's Renewables ramp. The government's 2030 GHG reduction commitment presents signifcant opportunities.</li>
</ul>


OVERSEAS.  Hawkish Fed Pause is Powell telegraphs +50bps hikes this year; SPX flat with most Sectors in the Red; PPI comfort as shows inflation declining; NVIDIA on the roll Again
JAPAN. NKY Futs +0.3% vs Cash;  Positive earning revisions driving NKY;  Investors Cheer Toyotas revamped EV strategy + votes back in board; Oasis tgts Tsuruha board; Slow Uniqlo China momentum
NUGGET. The Japan Renewables(+Nuclear) Opportunity. Japan is lagging in it's Renewables ramp. The government's 2030 GHG reduction commitment presents signifcant opportunities.


Ohayo Japan |Hawkish Fed Pause; SPX Falters; NUGGET: The Japan Renewables(+Nuclear) Opportunity

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. 

<ul>
<li>Drugstores were already the fastest growing format before Covid and the health scare only improved their performance further.</li>
<li>Several of the largest chains are now powerful players in food, using their non-food base to shake up the supermarket sector in ways that Japan has never seen before.</li>
<li>Being price-led, inflation is only helping them along, with a much greater capacity to hold down prices than mainstream supermarkets.</li>
</ul>


Drugstores were already the fastest growing format before Covid and the health scare only improved their performance further.
Several of the largest chains are now powerful players in food, using their non-food base to shake up the supermarket sector in ways that Japan has never seen before.
Being price-led, inflation is only helping them along, with a much greater capacity to hold down prices than mainstream supermarkets.


Discount Drugstores Challenging Japanese Supermarkets

<ul>
<li>Inflation remains the biggest headwind but most retail formats will see growth in 2023 with e-commerce expected to become the largest channel in the next 18 months.</li>
<li>Supermarkets are ripe for consolidation as new competitors emerge from the discount sector and online while convenience stores will consolidate further in a saturated sector.</li>
<li>Department stores will rebound further but only the leading firms will survive in a contracting sector.</li>
</ul>


Inflation remains the biggest headwind but most retail formats will see growth in 2023 with e-commerce expected to become the largest channel in the next 18 months.
Supermarkets are ripe for consolidation as new competitors emerge from the discount sector and online while convenience stores will consolidate further in a saturated sector.
Department stores will rebound further but only the leading firms will survive in a contracting sector.


<ul>
<li>Inbound tourism only got going again from October but the pent up demand to visit Japan has meant a surge in visitors. </li>
<li>Since many tourists also have stuffed wallets due to curtailed spending during the pandemic and the Yen is at very low levels, there is much higher spending. </li>
<li>Key beneficiaries are listed below among department stores, premium fashion stores and drugstores.</li>
</ul>


Inbound tourism only got going again from October but the pent up demand to visit Japan has meant a surge in visitors. 
Since many tourists also have stuffed wallets due to curtailed spending during the pandemic and the Yen is at very low levels, there is much higher spending. 
Key beneficiaries are listed below among department stores, premium fashion stores and drugstores.


Inbound Tourism up 50%, Spending Almost at 2019 Levels

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a> and <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a>, the country’s leading drugstore chains, are both looking to expand quickly in Kyushu after only entering the market recently. </li>
<li>This won’t be easy. Kyushu is full of discount retailers led by one of the best discounters, <a href="https://www.smartkarma.com/entities/cosmos-pharmaceutical-corp" target="_blank" data-smartkarma-citation="entities:3797:1" rel="noopener">Cosmos Pharmaceutical (3349 JP)</a>, which is also a leading drugstore chain.</li>
<li>But building a significant market share in the Kyushu market is crucial to competing nationally with these emerging discount leaders.</li>
</ul>



Welcia Holdings (3141 JP) and Tsuruha Holdings (3391 JP), the country’s leading drugstore chains, are both looking to expand quickly in Kyushu after only entering the market recently. 
This won’t be easy. Kyushu is full of discount retailers led by one of the best discounters, Cosmos Pharmaceutical (3349 JP), which is also a leading drugstore chain.
But building a significant market share in the Kyushu market is crucial to competing nationally with these emerging discount leaders.


Japan

TSURUHA HOLDINGS INC. is a holding company which manages subsidiaries that operate drug stores in Hokkaido and the Tohoku area.  The Company's product line includes drugs, cosmetics, and household utensils.

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Tsuruha Holdings (3391 JP)

Ohayo Japan |Hawkish Fed Pause; SPX Falters; NUGGET: The Japan Renewables(+Nuclear) Opportunity

Hawkish Fed Pause; Stocks falter; NKY Futs +0.3% vs Cash; Investors Cheer Toyotas revamped EV strategy;votes back in board; Tsuruha in Oasis's...

Mark Chadwick

Discount Drugstores Challenging Japanese Supermarkets

Japan's supermarkets are facing unprecedented challenges from new competition in e-commerce but especially drugstores. We highlight the winners in...

Michael Causton

Outlook for Japanese Retail in 2023

Most Japanese retailers can look forward to a good year in 2023 but there will be challenges for formats like supermarkets where consolidation is...

Michael Causton

Inbound Tourism up 50%, Spending Almost at 2019 Levels

Of course inbound tourism will rebound in Japan in 2023 but spending per visitor may well exceed 2019 levels due to the weak Yen and full wallets....

Michael Causton

Welcia Challenges Cosmos in Kyushu

Kyushu has become a hotbed of retail competition, especially in discount and drugstores. Aeon is determined to undermine the local champions,...

Michael Causton

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