“Mum’s the word” has been an unwritten though implicitly understood part of doing business in Japan since time immemorial. What is on the surface versus beneath are often polar opposites. It was an Australian publication, Adnews, who initially hot pressed the story that Dentsu, the media and marketing goliath, had admitted overcharging a key client, Toyota for digital work. The scoop was picked up by the Financial Times, before Dentsu held a press conference 2 days later to admit “improper activities” affecting over 100 companies. Only then did mainstream Japanese media like the Nikkei and others cover the story. It’s the second time this year that Dentsu has unwittingly found itself in the media spotlight. The first was over unsubstantiated allegations it had helped broker the Tokyo Olympics using shadowy consultancy arrangements. Suspicio
The beginning of September marked a new chapter in the history of Yamazaki bakeries, a food and retail goliath with sales over USD10bn, when it lost the manufacturing and sales rights in Japan for a stable of thoroughbreed brands including Oreo and Nabisco. There was a time, not so long ago, when entering the complex and fragmented Japanese market always necessitated partnering with a strong local company. It was a path many international brands trod, but there has been a gradual sea change with many global companies, including Nestle, Danone and now Mondelez taking back control from local partners, confident they can make the business grow faster and be even more profitable. Yamazaki has been badly stung by the recent turn of events, despite it being on the cards for some time. Whilst the company’s manufacturing capabilities are not in question, its abili
I don’t own a GoPro yet, but am toying with the idea. This aspirational brand created the sports camera market, although recently the company has taken a few heavy tumbles. The launch of the Hero session was a flop and is now heavily discounted; a drone is said to be in the works but has yet to take flight; there have been layoffs. The stock price which once soared to over $80 is today languishing close to $14. The brand still enjoys a loyal consumer following but is less close to its trade partners, most of whom by all accounts are kept in the dark about new initiatives until the very last minute. Yesterday I was in Umeda’s Yodobashi Camera, one of the country’s busiest electronics shops. It is a massive Aladdin’s cave of digital paraphernalia, that stretches several stories high. It was a Friday afternoon and packed to the rafters with both local and tourist shoppers. Yodobashi’s sports camera section is the first thing you encounter as you drop off the escalator on the
Kewpie is making waves with its new “functional food” mayonnaise that helps those suffering from high blood pressure. The company which has sales of over US$6billion, recently launched a Mayonnaise containing linseed oil, high in α-Linolenic acid, which has similar attributes to fatty acids found in fish oils. In the past manufacturers had to go through an extensive, quasi-pharmaceutical product testing to make strong food claims. In order to spur innovation, there has been some easing of these restrictions, although manufacturers still need to provide a hefty health dossier to support claims. This is the Kewpie “amani” (アマニ油マヨネーズ) TVC. It explains that the product contains 30% α-Linolenic acid, plus shows how it can be used for cooking. Recently Kewpie has set up some “vegetable” cafes in Tokyo and Osaka. Perhaps they hav
It’s been a long, hot and humid summer and young and old alike have been reaching into the ice cream chiller to cool down. Companies with a heavy focus on impulse products typically make over 65% of their annual sales in July and August alone. Get your sales forecasts wrong and you can easily miss the annual target just because of supply issues. I spent several years in the business and learnt this the hard way. Still that’s another story! Gari Gari Kun, is a quintessential Japanese water ice, whose name derives from the crunching of its inner core of ice crystals, has steadily risen up the market share charts, although its brand owner, Akagi, is not one of the mega dairy companies. Akagi’s rise to fame was thanks in no small part to its cherished relationship with 7-Eleven, the leading CVS retailer. Earlier this year the company hit a publicity sweet spot with an “CE
Ten years ago there wasn’t much of a market for alcohol free beverages in Japan. As anyone who’s lived and worked in this urban maze knows, drinking after work several times a month is an expected, although unwritten part of the job, a tread mill for workers and monolithic beer companies alike. That changed in 2009 when Kirin launched it’s “Kirin Free” targeting drivers, plus a growing army of health conscious workers. Not to be outdone, Kirin’s initiative was quickly researched and duplicated by the likes of Asahi, Sapporo and Suntory. By 2011 the non-alcoholic beer market had grown almost 10 times in size to a whopping 21 million cases a year. The category further expanded with ready to drink cocktails, chuhai (a shochu based beverage) and plum wines. For a while these additions added another 6 million cases to the pile. However sales data for the last 3 years
Kansai people have a reputation for finding hot deals and striking quick bargains. So it’s not a surprise to find that a whole class of business or wholesale supermarkets are thriving in the region. Called “gyomu super” (業務スーパー) in Japanese these outlets sell more foreign sourced products that many mainstream Japanese supermarket chains and their retailing style is old style bulk displays in large boxes rather than neatly merchandised aisles with not a price ticker out of place. But given the growing divide in Japan between the “haves” and the “have nots”, business is booming. The shopper profile skews heavily to those on a budget and for whom time is of the essence. Kobe Bussan, a major importer, is a leading player and sells directly to its fully owned and franchised store base which now exceeds over 600 outlets.
Japanese Whisky is going through a heyday with rapidly growing demand for unusual and hard to find malts. This special corner, spotted in Hankyu Department Store in Umeda, Osaka today, is designed to tempt punters into tasting a tipple. In the past Whisky accounted for about 1% of the Japanese spirits market but like the raging Craft Beer boom, that’s all changing. Campai!
The Hanamaru Udon and Yoshinoya brands (Yoshinoya Holdings) are front runners to take Japanese fast food global. They already have over 600 International outlets and this year will open 100 more. China is a key focus where the foodservice market is set to triple in size by 2020. The “Hanamaru” logo (flower-circles) is the sign Japanese school teachers write on test scores when you get 100%…One assumes Hanamaru are doing extensive product testing to make sure their noodles score just as highly…
Dyson’s latest innovation, a hair dryer positioned as “intelligent” to “make your hair shiny”, hit the Japanese retail market last week. Two weeks previously the brand’s global launch blasted off in Tokyo attended by a variety of glitterati including the British ambassador. The company has a loyal following in the land of the rising sun where trend savvy shoppers like to be seen with the latest gadgets. Hair dryers are a significant category in Japan worth over USD600m. Competition up until now has been legacy Japanese electrical giants like Panasonic. James Dyson is quoted in its Japanese sales brochures saying that the “design of hair dryers has changed little since the 1960s” and is ripe for a new style, if you’ll excuse the pun. H
Most of the recent press coverage on Japanese retail giant 7&I holdings has featured board room shenanigans, coups and the ensuing departure of long standing Chairman Toshifumi Suzuki. Less noticed was that 7&I’s private label sales, branded Seven Premium, exceeded USD9.4b in 2015, a growth of 22% over the previous year. Seven Premium now accounts for over 25% of total revenue. In contrast, Aeon’s Top Valu brand which was the original Japanese own label pioneer, saw its PB sales slip to 2% to USD7.1b in the same period. 7&I is famous for its “team merchandising” approach to product development, which in a broad sense means the retailer shares (selected) POS data on shopper behaviour with suppliers to inform product and packaging design. The retailer likes to adopt this team merchandising approach both for PB as well as manufacturer branded items; a challen