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Market

Valued at over 110 trillion yen in 2003, Japan's retail market is the second largest in the world with sales second only to those of the United States when compared to the world’s five largest retail markets.




Click graph to enlarge            

Below is the retail market broken down by classification and then by sales value for each business classification.  The data comes from the most recent Census of Commerce (2002) from the Ministry of Economy Trade and Industry (METI), which produces the report every three years.  The 2005 report will be released soon.


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  Click graphs to enlarge


Key Sectors

Sales in three key sectors stand out: high-end specialty, home furnishings and non-store retail.  Many retailers in these sectors have come to Japan not only to take advantage of the high per capital sales but also to develop products influenced by the high standards of local consumers.  Products are developed with these high standards and later prove to be successful when sold in other parts of the world.

  • High-end Specialty

    Japan possesses one of the top markets for luxury items in the world.  Japanese consumers purchase 40 percent of the world's luxury goods every year.  In addition, a 2002 survey found the following percentages of Tokyo women in their 20s to own an item from these high-end retailers:
    • 94% own a Louis Vuitton product
    • 92% own Gucci
    • 58% own Prada
    • 52% own Chanel
    • 44% own Christian Dior
    Foreign high-end retailers also conduct R&D activities in Japan to refine their products to meet Japanese consumer standards.  These standards then serve as a benchmark for worldwide success of their products.  Richard Collasse, president of Chanel K.K., noted, "Looking at our efforts in innovation, we established our own R&D unit in Japan, since this country unquestionably has the most advanced technology in cosmetics. We made this investment because we concluded that we needed to develop products for not only Japan but also the global market."

  • Home Furnishing

    Japan's home furnishings sector has experienced considerable expansion over the past decade, growing to 3.92 trillion yen in sales and 3,860 stores in 2003. A prominent trend seen of home furnishing centers is a move beyond the conventional retail practice of selling independent products to packaging many of them by offering household solutions and coordinated furnishings.

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  • Non-Store Retail

    As more shoppers look to the convenience of being able to shop from their computers and phones outside of regular store hours, the non-store retail sector has been growing steadily and reached 2,790 billion yen in FY 2003. 

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    The top four media–-catalog, direct mail, Internet and TV–-make up 75% of sales, of which TV shopping and Internet sales have shown particularly outstanding growth.
    • TV shopping
      • During FY 2004, the 10 leading TV shopping companies sold a total of 164 billion yen worth of merchandise–-a 25% increase from the previous year.
      • Sales for FY 2005 are forecasted to amount to more than 200 billion yen.
    • Internet
      • Member firms of the Japan Direct Marketing Association reported that their Internet sales doubled in FY 2002 to about 150 billion yen.
      • 67.8 million Japanese had Internet connectivity via their mobile phones as of December 2003, allowing them to make payments at convenience stores to mobile telephony-based Internet merchants and further fueling Internet sales.

Successful Foreign Companies

  • Coach Japan
    Established: 2001
    Country: United States
    Business: imported handbags and accessories
    FY2005 sales: 39.6 billion yen
    • Japan sales constitute more than 20% of Coach’s global revenues
    • Japan is Coach’s second largest market after the United States
    • Fastest growing brand and holds the No. 2 position in market share in the imported handbag and accessories sector
    • Double-digit year-on-year growth rates
    • Aims to double Japan sales in next four years to 80 billion yen
  • Ikea Japan K.K.
    Established: 2002
    Country: Sweden
    Business: home furnishings
    • During initial phase, plans to open
      • Four to six stores in Tokyo metropolitan area (first two to open in 2006)
      • Four to six stores in Kansai region
    • Acquired land on Port Island; store opening planned for 2009
    • Tommy Kullberg, president of Ikea Japan: “If Ikea can win the confidence of Japanese consumers, we can sell our products anywhere in the world.”
  • Lands’ End Japan
    Established: 1993
    Country: United States
    Business: catalog and online retailer, classic American casual wear
    • Online shopping launched in 1999
    • 2005 revenue grew 11% over same period in 2004
    • Internet sales grew to reach more than 20% of company’s total 2005 revenue
    • Expects sales to grow with new shopping features:
      • Lands’ End Live – allows shoppers to chat with a live representative while shopping
      • Shop With A Friend – connects shoppers anywhere to “go shopping together”



See the full report.