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>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

Equity Bottom-Up

Firms like <a href="https://www.smartkarma.com/entities/world-co-ltd" target="_blank" data-smartkarma-citation="entities:27437:1" rel="noopener">World Co Ltd (3612 JP), </a><a href="https://www.smartkarma.com/entities/tsi-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:19259:1" rel="noopener">Tsi Holdings (3608 JP)</a> and <a href="https://www.smartkarma.com/entities/onward-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:11370:1" rel="noopener">Onward Holdings (8016 JP)</a>  are facing serious problems adjusting to a new distribution reality for apparel trading in Japan. While World is cutting more brands and investing in home decoration and other projects and TSI is focusing on sports and e-commerce (please see our other insights on these changes), Onward is doing all of these things: cutting more brands, investing in non-apparel and beefing up e-commerce sales.There is still a long way to go.

Firms like World Co Ltd (3612 JP), Tsi Holdings (3608 JP) and Onward Holdings (8016 JP)  are facing serious problems adjusting to a new distribution reality for apparel trading in Japan. While World is cutting more brands and investing in home decoration and other projects and TSI is focusing on sports and e-commerce (please see our other insights on these changes), Onward is doing all of these things: cutting more brands, investing in non-apparel and beefing up e-commerce sales.There is still a long way to go.

Big Apparel in Trouble: Onward Aims for 30% of Sales from Non-Apparel Brands

<a href="https://www.smartkarma.com/entities/tsi-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:19259:1" rel="noopener">Tsi Holdings (3608 JP)</a> is one of the leading apparel firms in Japan but was already forced to do some major restructuring well before the pandemic. The latter has caused a serious rethink at the company which will mean further closure of brands and stores and more investment in e-commerce and non-apparel.

Tsi Holdings (3608 JP) is one of the leading apparel firms in Japan but was already forced to do some major restructuring well before the pandemic. The latter has caused a serious rethink at the company which will mean further closure of brands and stores and more investment in e-commerce and non-apparel.

Big Apparel in Trouble: TSI Wins on E-Commerce but Closes More Brands

2020 was an annus horribilis for the apparel sector, and particularly for wholesale-centred firms. The good news is that most have come out of the crisis energised, with new ideas about how to save their businesses and some even think they can expand again through e-commerce and diversification beyond apparel.The bad news is that the new wave of cuts being announced will likely still not be enough and the leaders in the apparel sector will end this sorry period significantly diminished in size although a bit more profitable.In World's case, it has said repeatedly in the past few years that the work of restructuring is done but soon enough as announced yet another round of cuts to brands and stores. We expect a repeat next year too.

2020 was an annus horribilis for the apparel sector, and particularly for wholesale-centred firms. The good news is that most have come out of the crisis energised, with new ideas about how to save their businesses and some even think they can expand again through e-commerce and diversification beyond apparel.The bad news is that the new wave of cuts being announced will likely still not be enough and the leaders in the apparel sector will end this sorry period significantly diminished in size although a bit more profitable.In World's case, it has said repeatedly in the past few years that the work of restructuring is done but soon enough as announced yet another round of cuts to brands and stores. We expect a repeat next year too.

Big Apparel in Trouble: World Announces yet More Cuts but It Still Won't Be Enough

The growth in subscription services is a global phenomenon that has been growing just as fast in Japan as anywhere else. While most attention is given to music and media subscriptions, many brands and retailers of consumer goods are finding that the subscription model can be a key part of their online strategy, delivering multiple benefits across sales growth, customer data, marketing, inventory management and margin improvement.

The growth in subscription services is a global phenomenon that has been growing just as fast in Japan as anywhere else. While most attention is given to music and media subscriptions, many brands and retailers of consumer goods are finding that the subscription model can be a key part of their online strategy, delivering multiple benefits across sales growth, customer data, marketing, inventory management and margin improvement.

The Subscription Economy: Keeping Customers Keen While Earning Recurring Revenues

Japan

World Co., Ltd. designs, manufactures, and distributes apparels. The Company produces women's garments, men's garments, children's garments, and other products. World also operates investment businesses.

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World Co Ltd (3612 JP)

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

Big Apparel in Trouble: Onward Aims for 30% of Sales from Non-Apparel Brands

Onward Holding, like its peers, is being forced to restructure further and faster than planned three years ago when competition in the apparel...

Michael Causton

Big Apparel in Trouble: TSI Wins on E-Commerce but Closes More Brands

TSI Holdings is one of Japan's larger apparel groups and like its peers is trying to reinvent itself to cope with a post-Covid world where people...

Michael Causton

Big Apparel in Trouble: World Announces yet More Cuts but It Still Won't Be Enough

Japan's apparel firms had an unquestionably bad year last year but trading isn't getting much easier. World is showing promise through...

Michael Causton

The Subscription Economy: Keeping Customers Keen While Earning Recurring Revenues

Subscriptions to physical goods are rapidly becoming a popular model. In Japan, many major retailers and brands are creating subscriptions, gaining...

Michael Causton

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