International Marketing Vifon to Japan

Topics: Retailing, Supermarket, Department store Pages: 7 (2247 words) Published: December 5, 2013
Japan is still the 2nd biggest retail market in the world with 127 million consumers that appreciate high quality and excellent service. China may have more factories these days, but how many people there can really afford western goods? When it comes to measure market size, Japan still accounts for more than 55% of the whole Asian retail market. Japan is also the nation with the highest demand for foods imports as it has the lowest self-sufficiency rate (39% only), 61% of all foods consumed in Japan is imported (United Nations, 2008). 

Japan Retail Market Environment

In 2011 the Japanese retail market had to cope with the March 11, 2011 shock and then compensate for the various after effects. Initially consumption spiked with the mass purchases of emergency items such as bottled  water and batteries, followed by corresponding declines in purchases like party items and non-essential goods. The economy shifted from a rocky footing onto a more stable pathway by summer and consumer behaviour normalized.  Japanese consumer adapted to new preferences in reaction to the events, changing retail market demands significantly. First, Japanese consumers began eating out less, while having meals at home more. This has led to an increase in the Home Meal Replacement (HMR) sector, as well as the frozen food sector. Second, Japanese consumers are more attentive to products with longer shelf life, in case of future emergency situations. The Japanese retail market is dominated by two demographics: Young career seeking individuals in single person households

B.Market breakdown
Total retail sales including food, beverages, general merchandise, fabrics, apparel, and accessories in Japan amounted to $832.6 billion in 2011. Of this figure the total food and beverage retail sales amount was $527.4 billion. Total retail sales have increased each year since 2008. In 2007, there were total retail sales of $614.6 billion and food & beverages sales of $370.6 billion. Below are the total sales figures:

C. Food Sales in 2011
The Japanese retail food industry in 2011 experienced growth across all three categories of large and conventional supermarkets, department stores, and convenience stores. As stated previously the resilience of the industry and its ability to quickly adapt to the market changes along with economic growth in the latter half of the year helped spur on the retail food industry growth. Food sales increased from 2009 to 2011 for the three retail categories

D. Food and Beverage Sales Japan
While food sales grew across all segments, overall sales growth was observed in most regions of Japan as many households spent more time and money purchasing food items to consume at home rather than spending money at restaurants in 2011. Restaurant spending did increase in 2011, but food purchases for home consumption were the larger portion of spending. Japanese real economic growth rate for 2011 was estimated at minus 0.4% by the Bank of Japan. The negative growth rate was expected due to the hardships that had to be overcome, but it is important to keep in mind that even in an environment of stagnant sales; geographic markets in Japan are quite sizable - often exceeding that of entire countries.

E. Establishment Trends 
In 2011, supermarkets and convenience stores continued to be the primary distribution channel for food in Japan. The market has been relatively stable over the last 3 years with the only notable trend that department stores are losing ground slightly, but this corresponds with the decline of department store sales in general.

F. Large Scale and Conventional Supermarkets Japan
Supermarkets in Japan represent the largest provider of food and within the supermarket sector the top 5 companies (AEON, Ito Yokado, Uny, Daiei, and Life Corp.) represent 65% of all sales.

1. Target Market
As the Japanese market continues to mature, supermarket...
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