Furniture & Interior in Japan 2009

Report The Europe Japan Business Center

Provider Powered by: G&S INT LTD
6-4-13 Soshigaya, Amenity Building
Tokyo Setagaya-ku 157-0072 Japan
www.ej-bc.com
Contact: Mr. Gasch
 Table of Content
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Furniture & Interior in Japan

 Japan’s Retail Market slide 3

 Housing Starts slide 4
 Furniture Market slide 5
 Trends in Furniture Imports slide 6
 Furniture Imports by Year and Country slide 7
 Furniture Distribution slide 8
 Retail Localisation Furniture slide 9
 Consumer Price Index Furniture slide 10
 Key Customer Groups Furniture slide 11
 Branding and Brand-Awareness slide 12
 Important points prior entering Japan slide 13
 Major furniture retail players slide 14
 Successful Foreign Market Entries slide 15
 A few key points in regards to Japan slide 16
 Overview EJBC & GS INT LTD slide 17
 References/ Testimonials slide 18

Furniture & Interior Market Japan 2009

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Furniture & Interior in Japan Japan’s Retail Market

Japan

Valued at over 108 trillion yen in 2003, Japan's retail market is the 2nd largest in the world
with sales second only to those of the United States when compared to the world’s five largest retail
markets. Japanese consumers are know to be most quality & service demanding around the globe.

Total & per Capita Sales

of Top 5 Retail Markets
Breakdown of Retailers by Business Classification

Source: JETRO and METI, 2007

3 Source: IGO Global Retailing, 2007

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Furniture & Interior in Japan Housings Starts

Housing starts
Due to the introduction of new tougher regulations for new houses in June 2007, the new housing
starts plummeted dramatically in 2007. Lowest level in 30 years. Since the purchase of furniture is
tightly connected to building new houses or moving to a new house it have and will continue to
affect us.
”There is more than 1 million new houses built every year in Japan!”
Apartment sales
Apartment prices increased 10% in the Tokyo area in 2007.
Sales of apartments dropped 30% in the Tokyo city center and 4.3% in Osaka.
New Housing Starts 1994-2007

4 Source: JETRO, 2008

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Furniture & Interior in Japan Furniture Market

Japanese Market Tendencies

• Simple, sophisticate and modern designs are widely popular among Japanese consumers
• Sofas, beds, dining sets, and cupboards are main items in imported furniture market
• Regulations of chemicals and strength are relatively severer than in other countries
• “Made in ~” is one of the important factors to the image of each product background
• Correspondence to custom-made order is one of the terms of an attractive trade

Total Furniture Market Japan (in billion yen)

Japan is the
2nd biggest
furniture market
worldwide
behind the US

5 Source: JETRO, 2007

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Furniture & Interior in Japan Trends in Furniture Imports

Total Furniture Imports Japan (CIF) Drastic changes in general consumer’s

furniture purchasing patterns 

1. mind-set focused on restraining purchases

2. Purchasing tendencies of consumers:
careful considered balance of price,
quality, and taste
3. Diverse purchasing trends due to the
diversification and individualization of
lifestyles

 Notable changes of Japanese

consumer purchase patterns
Source: METI (Ministry of Economy, Trade and Industry) 2006

Trends in Wooden Furniture Shipments by Item

6 Source: METI (Ministry of Economy, Trade and Industry), 2006

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Furniture & Interior in Japan Furniture Imports by Year and Country

”Low-end products come from China,

Total Population: high-end and design from Europe ”
127.74 million
Size of Land: Although being a uniquely homogenous
377.907 km² society (Japan has only 1% foreigners,
2007) Japan’s market place today and
its customers stand for great ...

 Variety of Preferences
 Variety of Lifestyles
 Variety of Market Types

 Variety of Business Possibilities

Total Furniture Imports by Year and Country

7 Source: METI (Ministry of Economy, Trade and Industry), 2006

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Furniture & Interior in Japan Furniture Distribution

Most foreign companies use, if not setting up an own sales offices, case 1 or case 3.
As Japan’s distribution system is rapidly changing, most manufacturers, foreign as
national, increasingly prefer case 1, as this system ensures completive pricing, and
quality sales and after-sales services to end-users (also in large scale distribution).
General trading companies are continuously loosing influence in Japan.

Major Import Routes Japan – Furniture & Interior

8 Source: G&S, 2006

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Furniture & Interior in Japan Retail Localisation Furniture

In Japan, generally most retail

turn-over is achieved in the areas
of Kanto (Tokyo) and Kansai
(Osaka). These areas have the
biggest share (combined upto
2/3) of the buying power of
Japanese consumers.

• population: 127 million (2008)

• Japan is the 2nd biggest retail
market globally (Jetro and
United Nations statistics, 2007)

35% of Japan: TMA , KANTO

(Tokyo Metropolitan Area)
 35 million consumers

25% of Japan: KANSAI

Osaka, Kobe, Nagoya
 24 million consumers

40% other Japan areas

Conclusion
9  Furniture & Interior Japan sales partners should be chosen in consideration of their main customers areas in Japan.

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Furniture & Interior in Japan Consumer Price Index Furniture

Since the burst of the “Bubble Economy” around 1991 Japan has experienced general deflation or a
very low inflation. In 2007 especially food and energy costs rose, but the picture of furniture and
house-hold goods looks different. The expectation of FY 2008 is an increase of 0.5%.

“Japan was, and still is, a high-priced retail market”

From 2000 to 2007 furniture prices fell more than ten percent, but before 1995, Japan’s furniture
prices were up to double of those in Western markets, such as the US, UK, and Germany (and other
EU). In 2007, the furniture prices fell 1%, which looking from a positive angle was the lowest drop
in the past 7 years. Today, furniture & interior in Japan is still costlier in retail than in the EU or US.

Consumer Price Index Development 1992-2007

10 Source: METI (Ministry of Economy, Trade and Industry), 2006

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Furniture & Interior in Japan Key Customer Groups Furniture

KEY Generations of Furniture Market: the two baby-boom generations and young families.
These two generations are the groups spending most on house building, furniture and interior.

Population by Age (5 year groups)

11 Source: Ministry of Internal Affairs and Communications, Statistics Bureau, 2006

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Furniture & Interior in Japan Branding and Brand-Awareness

How to become attractive to Japanese consumers

• Provide appropriate products to Japanese customers

through detailed market research and customers
analysis  some customisation might be needed
• Care for the balance of “size, price and quality”
• Care for the image of your products and company
• Build-up a reliable and certain export system

 Keep the contract (specification, delivery term,

etc.), try to shorten the delivery term

Outline on how to build up your “Brand”

• List-up the strong and good points of the national

character, industry, and products
• Collaborate with national designers to show that you can
offer original design
• Publicise the features and backgrounds of your product
materials and functions
• Increase the exposure of your brand in Japanese market

 Building up the “Brand” means building up

“Image”(= good and right image)

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Furniture & Interior in Japan Important points prior entering Japan

Important points of consideration when marketing to Japan

 Understand the target market (characteristics of your customers in Japan)

 Send information about company and products frequently to Japan
 Train your Japanese employees /sales partners to understand your brand/ products well
 Find answers to “what can you do to actually improve live of your customers in Japan?”

How To Find the Japanese Distributors: Stage 1 How To Find the Japanese Distributors: Stage 2

 Decide the type of distribution channels  Frequently visit your customers/ partners in Japan
 Decide the target retailers/consumers  Be patient in steadily building your market share
 Decide the starting range of export products  Some product adaptations is often required
 Selection of right partner for each type of furniture  Pay attentions to the details & after-sales in Japan

 G&S is providing professional sales partner search negotiations in Japan, contact us for details
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Furniture & Interior in Japan Major furniture retail players

The list below reflects only fraction of the most important retail stores chains in Japan, is not
complete and only overviews the Japanese market.

“There are more than 8500 POS for furniture & interior in the Japanese market place” (JETRO, 2008)

14 Source: IDAFIJ, 2007

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 Successful Foreign Market Entries
IKEA first came to Japan in the mid 1970s as part of an
Furniture & Interior in Japan

early wave of expansion in Asia. Following a long struggle,

IKEA pulled out in 1986. IKEA returned in 2006, now
operating 6 stores in Japan successfully.

Lars Petersson, CEO of IKEA’s Japan, believes IKEA’s success

in return is because of the special care they’ve taken to get
to know the Japanese customers.” Petersson places little
credence in the idea that Japan is more difficult for foreign
companies than other markets. He feels that past failures
have been exaggerated and may have deterred some global
brands from entering Japan. “Yes, there are difficulties in
Japan but there are difficulties in Russia, there are difficulties
in Poland...” Some advice to international companies looking
to avoid our fate in the 70s, he says: “If planning to come to
Japan (or Poland) thinking you are in just another country is
the start of the failure because there are a lot of local things
you need to understand in Japan, then you can achieve your
targets in this giant market.”

Poggenpohl, German high-end kitchen maker

with 110 years tradition, is exporting to Japan for
25 years with a Japanese retail partner. The
manufacturer with 75% export ratio decided in
2008 to open its first own operated Asia
showroom in Tokyo, the store will open in 2009 in
prestigious Tokyo Aoyama. Poggenpohl aims to
increase the number of own stores globally from
35 in 2009 to 90 by 2013. “Japan is a key market
for our brand in Asia and very potential in terms
15 of sales volumes”, Martin Gill, Head of Global
Retail, Poggenpohl Group. click to go back to menu / table of content
Furniture & Interior in Japan A few key points in regards to Japan

To succeed in Japan in a long-term view …

• Manufacturers need to show long-term commitment to Japan and customers

• Excellent distribution and service network is a must
• Some adaption to the Japanese market often required
• Extreme focus on quality and on customer service
• Need and request for detailed technical information and documentation
• Focus hard on hiring top people or professional partners (a pool of very talented
people/ companies is available if you screen carefully)
• Watch your brand image and install a well-working delivery/ after-sales-service
• OK to take a premium price, although the market is becoming more competitive

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 „Do you target to increase sales in Japan?
We are the place to start!“

The EJBC and G&S INT LTD provide Japan Business Development:
 See and understand your market potentials in Japan
 Start and manage sales in Japan, restructure existing channels
 Increase market share in the 2nd biggest market worldwide - Japan

With external support the following can be realised:

 Fast project implementation through professional partner in Japan
 Offloading your export team via outsourcing projects
 Low project cost, efficient and effective use of export budgets
 Risk reduction by using reliable partner and market information

G&S International Japan offers:

1. Identify market potentials for your products in Japan
2. Seach & Negotiate with suitable importers/distributors/buyers
o sales representaion, showrrom & office set-up & HR recruiting
o PR & advertisement, legal, purchasing & technolgy transfer
 What our customers say ...
Below a couple of references/ testimonials of G&S in Japan, please contact us for details (phone +8180-5519-1260) 

Company global high-end kitchen brand, headquarters in Germany

Project Market Investigation, Management Set-up retail operation, HR recruiting, other

From 2007-2009 we’ve worked for a well-known German kitchen manufacturer on market analysis and management of
retail organisation set-up in Japan. Export Director “I have very seldom experienced such a high degree of
professionalism, accuracy and efficiency. You did an outstanding job for us in Japan!”

Company global design lighting manufacturer, headquarters in Austria

Project Market Investigation, Management Set-up sales office, HR recruiting, other

From 2006 – 2007 we’ve worked for a design lighting manufacturer on market investigation and set-up of its Japan
subsidiary. Director International Sales: “The project with G&S in Japan was done in a professional way, straight, clear
and quick; beside, it was also a very amicable cooperation, always in a cooperative, friendly atmosphere. We reached
our targets on time, which of course is the most important point in business. We recommend to use G&S as cost-
efficient solution in Japan.”
Thank you for your interest in this report!