Japanese Fashion Insights: Population, Income & Consumption

Japanese Fashion Market
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CONTENTS
Executive Summary
1. Introduction
2. Principal characteristic of the Japanese Market

2.1 Population
2.2 Japanese standard of living
2.3 GNP
2.4 Main import and export
2.5 Space contains
2.6 Physical condition
3. The Fashion Market

3.1 Life style by generation
3.2 The relationship between capital income and consumption
3.3 Personal expenses in clothing
3.4 Aspects to determine the patterns of consumption
4.The fashion Industry

4.1 Size
4.2 Department stores
4.3 GMS (General Merchandising Stores)
4.4 Specialty stores
4.5 Domestic apparel companies
4.6 Trading companies
4.7 Advertisement
5.Strategies
5.1 Foreign companies entering the Japanese market
5.2 Possible strategies for Brazilian companies entering
The Japanese market
6.Conclusion
Reference; Map of fashion areas
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Executive Summary
The purpose of this research is to provide you with basic information about the
Japanese fashion industry in order to broaden knowledge for the Brazilian
fashion companies planning to enter the Japanese Market.
The Japanese economy is viewed as being on its recovery stage. Although

consumers are trying to save more money to prepare for an unstable future, they
also have a strong desire to spend money on fashion.
The Japanese fashion market has very unique features compared to that of
other countries.
1) The real estate-related costs in Japan are high and the sales per square feet
have been highest in the world. It is about 10 times as that of the United
States.
2) Most of the Japanese retail fashion business stands on consignment. As a
result the retailers do not have the decision making power to merchandise
and determine the retail price.
3) The market size for people in their 20s is the largest. This is because most of
them still live with their parents and don’t need to pay living expenses. The
largest market for most countries is in the 40–year old age group.
4) The Japanese are very loyal to foreign prestigious fashion brands such as
Louis Vuitton and Gucci. The sales of these companies have been growing
steadily with support from young consumers.
5) Japanese consumers are sensitive to trend cycles in the international
fashion market.
6) They are significantly influenced by Fashion Magazines.
The Japanese fashion market has a big potential for the Brazilian Fashion
companies. At the same time it is easy to drop out from this highly competitive
market. It is imperative for Brazilian fashion companies to make clear strategies
for entering the Japanese market.
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1.INTRODUCTION
The Japanese fashion market maintains its position as one of the largest in the world
and has been facing important changes. These changes occurred thanks to many
phenomena such as the greater utilization of the internet, which allows anyone to
have access to precious information available at homepages of designers and apparel
brands and facilitating access to foreign products. Specifically in Japan, because
doubts about the future of the economy, have made Japanese consumers become
increasingly cost and quality conscious and constantly scanning for "new" and
"different" merchandise.
The shear size of the market and the changes that are taking place constitute an
opportunity for the Brazilian fashion industry and principally for those companies
that have already begun a phase of consolidation of their image in both Europe and
the United States. Evaluated at over US$ 5 billion, the Japanese fashion market will
therefore be receptive to those Brazilian companies interested in offering their
apparel in the country, principally those that are determined to place their products
by resorting to medium and long-term strategies and hiring qualified professionals
in Japan to perform marketing tasks. The Japanese seem curious about Brazil
especially after the very important World Cup victory in June of this year.
Competition in the Japanese market, nevertheless, is intense and companies that

choose to place their products in that country should be aware that Japanese buyers
prefer to maintain long relationships with vendors rather than one point buying.
Typically, prospective clients will start with a small order to verify the reaction of the
buyers and may eventually increase their orders. It is therefore highly important to
frequently travel to Japan to present new lines of apparel to demonstrate a
determined strategy to become a player in the market.
This market study has the objective of assisting the Brazilian fashion industry to
better place itself in Japan. It contains data that should provide designers and apparel
firms with the necessary basic information necessary to better understand the inner
workings of the Japanese fashion market and establish an outline for their strategy
for entry into the archipelago. The Brazilian fashion industry has the qualities of
youthfulness, gaiety and color that may constitute interesting particularities for the
prospective Japanese buyer.
In Chapter 2 of this study, important data regarding the setting for the development
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of the Japanese fashion industry. This section will permit the reader to better
understand the economic, geographic, physical and other determining factors that
make Japan's apparel industry quite unique.
Chapter 3 presents the basic information on the most important factors influencing
the buyers' consumption patterns. Motivational aspects for consumer buying and
consumer buying patterns are discussed in this section.
Chapter 4 contains all the specific basic data that are important to evaluate the size
of the market and become familiar with the main "players" of the market. Specific
attention is given to the profile description of the different categories of entities
involved in the industry such manufacturers, distributors, trading and specialized
media companies.
Chapter 5 discusses strategies that have been undertaken by non-Japanese

companies to enter the market. These experiences are especially valuable for
companies that are newcomers in the market.
The Conclusion suggests recalls some of the basic points described in this study and
stresses recommendations made in this study to increase the chances of success of
Brazilian fashion and apparel companies.
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2.Principal Characteristics of the Japanese Market
2.1 Population
Japan has a population of 126.92million (2002), half that of the United States. It
is in eighth place after China, India, the United States, Indonesia, Brazil, Pakistan
and Russia.
The population is greatest along the Pacific seaboard where the weather is mild
and the transportation and industrial facilities are most highly developed. In fact,
approximately 70% of the nation’s people live on the strip of coastal plain
between Tokyo and the northern part of Kyushu. Advancing industrialization has
been accompanied by a population shift toward the large cities and a marked
population decline in the agricultural areas.
Chart 2.1.2 shows twelve cities in Japan with populations of over one million.
[Chart2.1.1 Japanese population by Age and Sex]
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[Chart2.1.2 Population of selected Cities in Japan]
2.1 Japanese Standard of Living
Japan ranks top class in investment and consumption with rapid economic
growth. However statistics give a mixed picture of the Japanese standard of living.
In one report it is on a par with or even exceeds western standards (see Chart
2.2.1), and in other respects such as social capital and housing, they lag behind
(see Chart 2.2.2). We will refer to housing in Chapter 2.5.
The average annual income per household (two persons or more) was about
6.73 million yen (US$ 62,447) in 2000. Ownership of consumer electronics,
automobiles, and other durables is widespread, and Japanese life is full of
affluence and convenience. However the social capital such as paved roads, sewer
system and so on, is far below European or American standards.
What do the Japanese themselves think of their standard of living? The results
are presented in Chart2.2.3, which further confirms the idea that people are
generally satisfied.
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[Chart2.2.1 Ownership of Consumer Durables by Japanese Households]
Item Japan
Air conditioners 81.9%
Refrigerators 98.1%
Microwave ovens 91.0%
Vacuum cleaners 98.3%
Washing machines 99.3%
Color TV sets 99.2%
VTR 76.8%
Stereos 55.2%
CD players 60.0%
Automobiles 83.1%
Personal computer 25.2%
[Chart2.2.2 Social capital]
Japan USA France Italy Germany

recreational park area per person (square meters) 3.0 29.1 11.8 11.4 27.4
percentage of paved roads 76.1 58.8 100.0 100.0 99.1
percentage of underground- electric wires 3.1 72.1 100.0 100.0 99.2
percentage houses connected to sewer systems 62.0 70.8 29.0 60.7 92.1
[Chart2.2.3 Satisfaction with their standard of living]
age 20-29 30-39 40-49 50-59 60-69

satisfied 23.1% 16.0% 19.0% 33.6% 25.8%
more or less satisfied 53.8% 38.0% 33.5% 30.5% 45.9%
dissatisfied 26.2% 25.5% 31.8% 25.5% 20.8%
more or less dissatisfied 17.2% 20.5% 15.6% 10.5% 7.5%
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2.3 GNP
Japanese industrial structure changed dramatically after World War , first

from agriculture to manufacturing, and then from manufacturing to services.
In terms of percentage, agriculture fell from 20% in 1955 to 2% in 1999,
manufacturing fell slightly from 33% to 29%, while services grew from 47% to
69%.
The changes in the share of total employment between 1955 and 1999 are even
more dramatic: agriculture down from 41% to 5%, manufacturing up from 25% to
31%, and services up from 34% to 64%.
This shift to services is common to all industrial countries. Rising incomes have
enabled people to meet their basic food, shelter, and clothing requirements and to
diversify demand into cultural, educational, recreational, and other non-essential
areas.
GNP and Capital income in Japan are very high compared to other countries.
[Chart2.3.1 Breakdown of Domestic GDP by industry](%)
Sector Japan U.S.A Korea France Italy Brazil

Agriculture 1.5 4.6 2.9 2.9 7.4
Industry 32.1 42.7 26.1 29.5 28.6
Services, etc 66.4 52.7 70.9 67.6 64.0
Total 100.0 100.0 100.0 100.0 100.0

(2000 The World Bank Group)
[Chart2.3.2 GNP and Capita Income]
Japan U.S.A Korea France Italy Brazil
GNP ($billion) 514.918 743.351 48.313 153.361 114.048 70.959
Per Capita Income ($) 40,940 28,020 10,610 26,270 19,880 4,400
(1997)
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2.4 Main Import and Export Product
Japan ranks third in international trade volume after the United States and
Germany. In1997, it accounted for 7.9% of world exports and 6.2% of world
imports.
EXPORTS
At one time, textiles were the major export, but today Japan’s major export is
machinery. Machinery (total of general machinery and electrical machinery, but
not including transportation machinery) accounts for 46.7% of the total value of
exports, making it by far the largest export product category. The next largest
category is automobile at 15.4%. Other major categories include precision
machinery 4.6% automobile components 3.2%, steel 2.6%, organic chemicals 2.4%
and ships 2.6%.
By region, the Newly Industrialization Economies (NIES) accounts for 24% of
Japan exports: the Association of South-East Asian Nations (ASEAN) for 17%, the
EU for 16%, and OPEC for 4%. By country, the U.S. was by far the biggest
customer with 30%. After the U.S. came China, Taiwan, Korea, Singapore,
Malaysia, Thailand, Germany and the top of the list, although with some change
in ranking. Each accounted for 2-7% of exports.
IMPORTS
The major import categories during 1998 were machinery 22.8%, raw materials
and fuels 13.9% (Petroleum 8.0%), foods 6.9% and clothing 5.2%.
Japan imports more clothes than any other countries. The U.S. imports in
clothing 0.4%, France 3.0%, Italy 4.9% and Brazil 0.3% in 2000.
Imports by region were: the EU13%, ASEAN15%, OPEC 15%, NIES 10%. By
country, the U.S. was at the top, as in exports, with 24%, and China second with
13%. Coming next were Korea, Taiwan, Australia, Indonesia and Germany with
3-4% each. The top ranking countries are always pretty much the same.
Japan imports clothing mostly from China (see Chart2.4.2). Due to the Japanese
boom of import luxury brands, Italy and France also benefit greater from the
Japanese market (see Chart2.4.3).
Chart2.4.4 shows the total value of imports in the last 5 years.
Chart2.4.5 indicates the tariff for clothing and footwear.
TRANSPORT LOGISTICS
Transport logistic varies with each company. Usually, the companies use FOB
(Free on Board) or CIF (Cost Insurance & Freight) and L/C (Letter of Credit) or
T/T remittance. Usually, payments are made either in Euros or in US dollars.
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Companies use different logistics to import their products according to the type
of business they operate. Air transportation is preferred because they are more
expeditious. If the imports amount to a large volume and weight, sea
transportation may be used. Companies having a division to deal with import
business, choose to import directly from venders. Most companies leave import
business to trading companies and agents having branches abroad. The
companies collect export goods either in New York or Los Angeles in the USA
and in Paris, London or Milan in Europe.
[Chart 2.4.1Export and Import]
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[Chart 2.4.2Import of Clothing by the Country (Quantity)]
[Chart 2.4.3Import of Clothing by the Country (Price)]
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1999 2000
Quantity Rate % Quantity Rate %
China 3,794,419 51.8 74.7 5,185,865 36.7 77.6
Korea 446,048 33.1 8.8 482,846 8.2 7.2
Indonesia 189,873 70.6 3.7 207,109 9.1 3.1
Thailand 168,255 49.1 3.3 191,189 13.6 2.9
Vietnam 138,191 60.8 2.7 189,610 37.2 2.8
Total 5,077,133 47.2 100.0 6,683,111 31.6 100.0
Rate; rate of increase compared with previous year
Average exchange rate; 113.91/$ in 1999 107.77/$ in 2000
1999 2000
Price Rate % Price Rate %
China 1,275,800 4.0 70.7 1,542,901 20.9 75.8
Korea 109,905 -3.6 6.1 90,856 -17.3 4.5
Thailand 33,030 -11.3 1.8 30,091 -8.9 1.5
Vietnam 51,007 -9.1 2.8 63,550 24.6 3.1
Italy 110,763 -23.6 6.1 95,730 -13.6 4.7
France 30,383 -25.1 1.7 24,823 -18.3 1.2
USA 53,367 -15.7 3.0 47,985 -10.1 2.4
Total 1,803,702 -3.2 100.0 2,034,563 12.8 100.0
[Chart 2.4.4Total Value of Imports in the last 5 years]
Fabric Knit Total

Price Rate Price Rate Price Rate
1996 1,076,212 27.5 782,300 17.3 1,858,512 23.0
1997 995,303 -7.5 770,415 -1.5 1,765,718 -5.0
1998 900,294 -9.5 782,905 1.6 1,683,199 -4.7
1999 902,581 0.3 719,020 -8.2 1,621,601 -3.7
2000 1,013,961 12.3 808,252 12.4 1,822,213 12.4
Average exchange rate; 108.78/$ in 1996 120.99/$ in 1997 130.91/$ in 1998
113.91/$ in 1999 107.77/$ in 2000
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[Chart 2.4.5Tariff]
Item Tariff (%)
Fur Coat 20.0
Leather Coat 10.0
Jacket (fabric) 10.6
Underwear (fabric) 8.5
T-shirt 5.8-12.7
Sweater 10.6-12.7
Swimming Suit 10.6
Tie 10.9-13.4
Scarf 6.2-10.6
Sport Shoes (leather) 27.0-30.0
Shoes (leather) more than 12,907Yen 33.8
Shoes (leather) less than 12,906Yen 4362.5 Yen
Non-Leather Shoes 7.1-10.0
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2.5 Space constraints
Housing in Japan’s principal metropolitan areas has been characterized as

expensive, distant and small. Since land is expensive, people have to live in the
distant suburbs and even then, can only afford a small house. Buying a new 70
square meters condominium in the Tokyo area during the “bubble” years of the
late 1980s cost 8.5 times the average working household’s annual income. While
land prices are still coming down, the government’s goal is that a similar condo
should cost up to 5 years’ wages has yet to be achieved.
The Japan of today has more housing units than households, but the area of
each unit averages only 83 square meters (1998). Almost all privately owned
houses being built are single-family units. According to the Ministry of
Construction, the average floor area for a new house is 162.0 square meters in the
U.S., 94.8 square meters in Germany, 105.5 square meters in France, and only 89.3
square meters in Japan. The average house floor per person is 33 square meters in
Japan, 60 square meters in the U.S, 38 square meters in Germany, 37 square
meters in France.
The cost of house plots and construction is very high; such costs are, in fact,
among the highest in the world. In 2001, 59.8% of Japanese owned their homes.
[Chart2.5.1 House Floor Area](square meters)
Japan U.S.A Germany France

83 162 94.8 105.5
New house
('98) ('93) ('91) ('88)
33 60 38 37
Per person
('98) ('93) ('93) ('92)
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2.6 Physical Condition
In the past Japanese people were though to be short and small. However, their
life style has changed to a Western style. The physical condition of young
Japanese people is very similar to that of Europeans and Americans. Most young
people are thin. (See chart 2.6.1 and 2.6.2)
Chart 2.6.3 shows the size measurement according to JIS (Japanese Industrial
Standard).
[Chart 2.6.1 Japanese Average Height and Weight](CM, KG)
Male Female Male Female

Age Age
Height Weight Height Weight Height Weight Height Weight
1 79.6 10.8 78.0 10.1 17 171.0 64.0 157.0 50.9
2 88.5 12.8 87.3 12.0 18 171.5 61.1 158.1 52.3
3 96.1 14.8 95.6 14.4 19 172.7 64.5 158.2 52.0
4 103.6 16.6 102.9 16.5 20 171.3 65.4 157.8 50.4
5 109.1 18.5 108.9 19.2 21 171.4 65.2 158.2 50.8
6 115.7 21.4 115.5 21.1 22 169.5 65.4 158.2 52.9
7 122.7 23.9 121.4 23.4 23 171.9 64.6 158.0 51.8
8 127.6 26.9 127.5 27.2 24 170.3 65.7 157.0 50.5
9 133.2 30.0 133.0 30.2 25 171.0 64.6 157.9 50.4
10 137.4 35.4 140.2 34.7 2629 170.7 66.0 158.1 51.8
11 144.2 37.3 145.2 38.6 3039 170.7 68.8 157.2 53.3
12 152.0 43.8 150.0 41.8 4049 168.3 67.2 155.3 54.7
13 159.4 48.9 155.1 48.6 5059 165.5 64.7 152.8 54.4
14 164.4 52.7 155.5 48.7 6069 162.3 61.9 150.0 53.3
15 167.4 56.5 158.1 50.4 over 70 159.8 57.2 145.8 48.9
16 170.0 62.6 157.5 51.1
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[Chart 2.6.2 Percentage of Physical Condition by age]
[Chart 2.6.3 Measure of Size]
Size (cm) 7 9 11 13
Bust 80 83 86 89
Hip 89 91 93 95
Height 158 158 158 158
Waist 61-64 64-67 67-70 70-73
[Chart 2.6.4 Equivalent to Other Countries]
Japanese Size 7 9 11 13
French Size 36 38 40 42
Italian Size 38 40 42 44
US Size 2 4 6 8
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3.The Fashion Market
3.1Life Style by Generation
In Japanese market, the generations are divided by the years of birth (see Chart
3.1.1). Each generation has its own characteristic caused by the historical and the
economic background. Detailed accounts of their characteristics, life styles and a
description of the women in the generation are given below.
[Chart 3.1.1 Generation]

Year of birth Age Generation Population Life Stage
1942 60
1943 59 Cinema 16,879,000
1944 58 Generation
1945 57
1946 56
1947 55
1948 54 Baby Boomers 12,612,000 FAMILY MATURE
1949 53
1950 52
1951 51
1952 50
1953 49
1954 48 Designer and Character
1955 47 Brand 11,644,000
1956 46 Generation
1957 45
1958 44
1959 43
1960 42
1961 41 Hanako 9,484,000 FAMILY GROW-UP
1962 40 Generation
1963 39
1964 38
1965 37
1966 36
1967 35 Banana 10,584,000
1968 34 Generation
1969 33 YOUNG FAMILY
1970 32
1971 31
1972 30
1973 29 Second Baby Boomers 11,841,000
1974 28
1975 27
1976 26 SINGLES
1977 25
1978 24 Pocket Beeper 6,702,000
1979 23 Generation
1980 22
1981 21
1982 20 STUDENTS
1983 19
1984 18
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1) Cinema Generation
-People who were born between 1936 and 1945.
-When people in this generation were in the middle of their adolescence,
Japanese cinema also peaked and played an integral part in the culture for
young people. Hence the name was given.
-They are now in their late 50s and have latitude both in terms of time and
finance because their children have grown up. Women of this group are
enjoying their second adolescence and men are looking for a life apart from
the companies where they have been working for many years as their
retirement draws near. Chart 3.1.2 shows that their disposal income is higher
than other generations.
-Many women not only have some concerns about their future life as senior
citizens but they are also currently taking care of their parents and/or their
husbands.
2) Baby Boomers
-People who were born in 1948 account for the largest percentage in this
generation. They are the First Baby Boomers and consist of the first generation
after World War . They experienced the “entrance examination war” to get
into universities. They grew up in a competitive society. They are the parents
of the Second Baby Boomers and the Pockets Beeper Generation to which we
will refer later in this document.
-They are now their early 50s and have children who are either students or
working. Many women have part-time jobs as Chart 3.1.3 indicates. Even
though they are still repaying substantial housing mortgages, their burden of
educational expenditure is decreasing. The future expansion of their
consumption appetite, which has not been great thus far, can be expected.
-They are now faced with a turning point, since the retirement age has become
younger and younger, corporate restructuring activities are rampant due to
the current recession, and their children have grown up. Their movement and
activities merit attention as they still play the core role in the forthcoming
aging society.
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3) Designer and Character Brand Generation
-People of this group changed the image “rebellious young people” that was
created by the baby boomers into “fashionable young people.” They were the
pioneers in developing styles for young people, i.e. wearing fashionable and
highly individualistic clothes of designer and character brands (see Notes) and
enjoying themselves at many different leisure spots.
-They are now in their mid-forties. They are married and have children who
are either infants or elementary school students. They have huge housing
mortgages to repay and big expenses for their children, including educational
costs.
-Since their children are still small, most women of this group are working on
a part-time basis rather than on a full-time basis. However, women of this
group have recently gained attention as a group with new characteristics.
Notes
Designer and character brands (abbreviated as DC brands): This term refers to
the brands that were successively introduced by many Japanese designers
from the latter half of the 70s,such as Issei Miyake, Yohji Yamamoto, Rei
Kawakubo, and the character brands that took advantage of this development
and offered highly individualistic clothes without showing designer’ names.
4) Hanako Generation
-They are the products of the highly consumption-oriented society of the 80s
that is often dubbed “light, thin, short, and small”(see Notes). They actively
enjoyed consumption in order to differentiate themselves from others. The
Hanako magazine (see Notes) was regarded as the Bible for women of this
generation and the expression “Hanako women” (see Notes) became popular.
Hence the name of this group was given.
-They are now in their middle to late 30s. As people tend to get married at an
older age, the member of this group are in different life stages; some are still
single, some are married and working together, and some are married and
have small children. There are also an increasing number of married couples
who live together with the wife’s family or who live close to the wife’s family.
-In terms of family finance, they have some latitude and actively get involved
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in consumption because many of them are either single or many of the wives
are working. Even after getting married and having their own household, they
effectively generate latitude in terms of time and finance by taking advantage
of assistance from their parents.
Notes
Light, thin, short, and small: This term was coined because popular products
in the 70s tended to be light, thin, short, and small.
Hanako, Hanako women: The Hanako magazine that was launched in 1988
offered abundant, detailed information about fashion, restaurants, bars, and
beauty in a catalogue manner, Female office workers who got heavily
involved in status-conscious consumption, using this magazines as their Bible,
were called Hanako Women.
5) Banana Generation
-People of this group, who grew up in an affluent society, are not as active in
consumption as the Hanako Generation. They prefer to be moderately
individualistic rather than differentiating themselves through consumption.
There are many fans of Banana Yoshimoto, a novelist (see Notes), among them
and many of them share some traces of personality with the characters who
appear in her novels. Hence the name of this generation was given.
-They now have some disposable income and enjoy being single, free, and rich
enough to satisfy their own daily desires. When they were in their teens,
“Olive fashion” (see Notes) became popular. However, they affect fashion less
than Hanako Generation.
-Women are now in a position to think about how to find a balance between
marriage, having a baby, and work. Whereas women of the Hanako
Generation wanted to have everything, women of this group try to treasure
what they are able to have without over-extending themselves
Notes
Banana Yoshimoto: She is the daughter of Takaaki Yoshimoto, a critic. The
author of Kitchen, Tsugumi, Amuria, and others, she was born in 1964.
Olive Fashion: This term refers to the girlish and pretty fashion trends that
were often introduced in the Olive magazine launched in 1982. Sister brands
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of designer and character brands that were at the peak of their popularity at
that time also became very popular.
6) Second Baby Boomers

-They are the children of the Baby Boomers. People, who were born in 1973,
account for the largest percentage in this group. They began to attract
attention around the time when they became high school students as they
formed a large market as a group of consumers.
-This group also attracted attention not only due to its size but because its
members have their own new views on family and values. Although they are
not very intent on consumption, they have strong likes and dislikes because
they were surrounded by affluent living conditions since birth and also
because their parents gave them a great deal of freedom when they were
young.
-They were the main contributors to the development of Shibukaji (see Notes)
when they were in the late teens. Not only in fashion but also in life, they are
casualness-oriented.
-Since they have led a Western life style (using table and chairs instead of
tatami-style seating), they have longer arms and legs compared with previous
generations and their waistline is positioned higher than previous
generations.
Notes
Shibukaji: It is an abbreviation of Shibuya Casual.
Young people mainly in the Shibuya area increasingly followed a casual style
that consisted of basic yet high-quality products, such as a polo shirt and a
pair of imported jeans, around 1988. Initially, this fashion also served as
backlash against the boom in expensive imported brands
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7) Pocket Beeper Generation
-They show a strong preference in using pocket beepers as an important tool
in socializing, hence the name. Whereas mothers of the Second Baby Boomers
belong to group of Baby Boomers, fathers of the members of this group belong
to the Baby Boomer generation. Consequently, this group of people may also
be regarded as the Second Baby Boomers, and people of this group and the
Second Baby boomers share some characteristics.
-They are in their early 20s. Their parents help their finance and most people
of this generation have part time jobs. Their disposable income is high.
-The styles of singers and popular artists have a strong influence on the
lifestyle of this generation.
[Chart 3.1.2 Income and disposal income]( per month)
Average exchange rate; 107.77/$ in 2000
23
[Chart 3.1.3 Percentage of workingwomen by age]
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3.2The Relationship between Capital Income and Consumption
Chart 3.2.1 shows that the more income they can get, the higher percentage of
clothing they consume.
[Chart 3.2.1 Relation between Capital income and Consumption]
( per month)
Average Households Income 252,272 332,540 376,554 420,897 462,109
Average Expenditure 170,155 213,635 241,914 263,742 284,100
Food 30.9% 29.0% 28.1% 27.6% 27.2%

Shelter
Light, Fuel and water 18.9% 17.6% 17.4% 16.1% 15.4%
Furniture and Household articles
Clothes and footwear 5.4% 6.0% 6.1% 6.4% 6.6%
Medical 3.9% 3.4% 3.6% 3.3% 2.7%
Transportation/ correspondence 8.5% 9.8% 10.1% 9.6% 9.2%
Education
Culture and Amusement 14.3% 11.2% 12.2% 13.3% 13.8%
Others 26.3% 22.9% 22.5% 23.8% 25.1%
Average Households Income 531,521 574,919 629,593 722,767 914,397

Average Expenditure 316,159 335,148 370,152 416,178 500,555
Food 26.3% 25.5% 24.5% 22.7% 20.7%

Shelter
Light, Fuel and water 13.9% 13.2% 13.0% 11.5% 12.2%
Furniture and Household articles
Clothes and footwear 7.0% 7.4% 7.5% 8.3% 9.7%
Medical 2.7% 2.6% 2.5% 2.6% 2.5%
Transportation/ correspondence 10.5% 9.8% 9.5% 9.4% 8.7%
Education
Culture and Amusement 14.8% 15.0% 15.3% 16.0% 16.0%
Others 24.9% 26.6% 27.9% 29.6% 30.2%
Average exchange rate; 144.4$ in 1990
25
3.3Personal Expenses in Clothing
According to an annual survey of household accounts by the Statistics Bureau of

the Prime Minister’s Office, average monthly household income for 2001 is
551,160 Yen (US$ 4,543), while average expenditures are 335,042 Yen (US$ 2,757).
Neither the Engel coefficient used to measure the percentage of household
expenditures spend on food, nor the percentage spend on the basic necessities of
food, shelter and clothing is an adequate indicator of the quality of consumer life
in today’s affluent Japan. The ratio of the food-shelter-and-clothing has decreased
steadily since 1970, to 56.0% in 1970, 49.7% in 1980, 45.3% in 1990 and 43.7% in
1999. In contrast, there has been a marked increase in family spending on
recreation, entertainment and education.
Clothing accounts for 5.1%, 16,188 Yen (US$150.2) and the ratio has decreased
every year, (see Chart 3.3.1 and Chart 3.3.2).
Chart 3.3.3 shows that the percentage of expenses in clothing in Japan is less
than that in Europe.
Chart 3.3.4 shows the percentage of consumption to fashion goods. Women who
are 20s and 50s spend higher than others.
[Chart 3.3.1 Expense to Clothes]( per month)
Yen Ratio
Total Expenditure 317,133 100.0%
Food 73,844 23.3%
Shelter 20,787 6.6%
Light, Fuel and water 21,477 6.8%
Furniture and Household articles 11,018 3.5%
Clothes and footwear 16,188 5.1%
Medical 11,323 3.6%
Transportation/ correspondence 36,208 11.4%
Education 13,860 4.4%
Culture and Amusement 37,353 11.8%
Others 80,302 25.3%
[Chart 3.3.2 Expense to Clothes in recent years]( per month)
26
113.91/$ in 1999 107.77/$ in 2000
[Chart 3.3.3 Percentage of Clothing and Footwear by Countries]
Japan USA Italy Germany

5.1% 4.0% 9.0% 5.5%
27
[Chart 3.3.4 Percentage of Spending Fashion Goods]
28
3.4Aspects to determine the Pattern of Consumption
It is a remarkable phenomenon that Japanese people purchase clothes

according to annual events and the season (see Chart 3.4.1).
[Chart3.4.1 The annual events and the weather]
29
30
4. The Fashion Industry
4.1Size
Since the bursting of the economic bubble, Japanese economic growth has been
weak and personal consumption has continued to flounder. More and more
goods are being sold at prices below their original price, bringing about deflation.
Under this economic situation, the sales amount of total clothing in the retail
market was 107,969 billion Yen (US$1,001 billion) in 2000. The yearly rate of
increase compared has decreased every year for 5 years (see Chart 4.1.1).
In regard to the rate of decrease compared with last year, it is clear that women’s
clothes have not dropped as much.
About the sales amount of every channel, department stores 36,449 billion Yen
(US$338,2 billion), GMS 19,359 billion Yen (US$179,6 billion), specialty stores
38,946 billion Yen (US$361,3 billion) and others (mail-order business) 13,215
billion yen (US$122,6 billion). The shares of specialty have increased every year
for these 3 years (see Chart 4.1.2).
[Circumstances in 1998]
-Restructuring (laying off employees) in major department stores and GMS.
-Diversified consumers’ needs.
-Increasing sales areas in department stores.
-Magnified difference between winners and losers.
-Foreign capital advanced into Japanese market.
-Rate of decrease compared with last year is 3%.
-Overwhelming growth of Uniqlo.
-Dragging economy and consumption.
-Bankruptcy of Mycal.
-Increased demand for Import luxury brands
-New style of retailing for suit stores.
-Self-merchandising by department stores.
[Chart 4.1.1 Net sales and Clothing sales](Billion Yen)
31
Total Department stores GMS Specialty stores Others
Year Sales Rate Sales Rate Sales Rate Sales Rate Sales Rate
Total 1996 115,943 39,510 21,727 39,638 14,307
1997 115,247 -0.6 40,182 1.7 21,705 -0.1 38,766 -2.2 13,964 -2.4
1998 112,638 -2.3 39,344 -3.6 21,407 -1.4 38,212 -1.4 13,675 -2.1
1999 109,254 -3.0 3,756 -4.0 20,844 -2.6 37,483 -1.9 13,171 -3.7
2000 107,969 -1.2 36,449 -3.5 19,359 -7.1 38,946 3.9 13,215 0.3
Men 1996 35,492 10,285 6,663 13,160 5,381
1997 34,818 -1.9 10,316 0.3 6,596 -1.0 12,686 -3.6 5,220 -3.0
1998 33,611 -3.5 9,689 -6.1 6,311 -4.3 12,508 -1.4 5,103 -2.2
1999 32,182 -4.3 9,019 -6.9 5,983 -5.2 12,282 -1.8 4,898 -4.0
2000 31,425 -2.4 8,282 -8.2 5,513 -7.9 12,650 3.0 4,980 1.7
Women 1996 68,811 26,453 11,309 24,214 6,819
1997 69,017 0.3 27,141 2.6 11,332 0.2 23,875 -1.4 6,669 -2.2
1998 67,682 -1.9 26,377 -2.8 11,225 -0.9 23,528 -1.5 6,552 -1.8
1999 65,990 -2.5 25,662 -2.7 11,057 -1.5 22,977 -2.3 6,294 -3.9
2000 65,656 -0.5 25,210 -1.8 10,315 -6.7 23,896 4.0 6,235 -0.9
Babies 1996 11,705 3,382 3,938 2,283 2,104
and 1997 11,412 -2.5 3,355 -0.8 3,777 -4.1 2,205 -3.4 2,075 -1.4
Children 1998 11,345 -1.6 3,278 -2.3 3,871 2.5 2,176 -1.3 2,020 -2.7
1999 11,082 -2.3 3,075 -6.2 3,804 -1.7 2,224 2.2 1,979 -2.0
2000 10,888 -1.8 2,957 -3.8 3,531 -7.2 2,400 7.9 2,000 1.1
113.91/$ in 1999 107.77/$ in 2000
[Chart 4.1.2 share by Channel]
32
4.2Department stores
According to the statistics of Retail sales in 2000, the total sales of all department
stores were 10,011billion Yen (US$92,8 billion), the rate of increase compared with
last year is –2.7%.
In regard to clothing, total sales was 5,065 billion Yen (US$46.9billion), the rate
of increase compared with last year is –2.8% (see Chart4.2.1).
In the sales of the 21 major department stores, men’s clothing sales has
decreased the most. Due to the fact that most department stores have increased
the size of the women’s section, the share of women’s sales has increased every
year (see Chart4.2.2).
The department stores whose clothing sales amount are better than last year‘s
are Mitsukoshi, Hankyu, Takashimaya, and Fukuya (see Chart4.2.3).
In order to survive the decrease in consumer consumption and the competitive

nature of the fashion industry, department stores have started to shift away from
consignment. They are taking more risks and buying products on their own.
Isetan and Seibu are the front-runners of this new trend.
Isetan Shinjuku in Eastern Japan and Hankyu Umeda in Western Japan are very
influential players in the department store business. Making a deal with either
one would be very lucrative.
33
[4.2.1Sales of Clothing](Billion Yen)
1996 1997 1998 1999 2000

Sales Sales Rate Sales Rate Sales Rate Sales Rate
Total 11,038.9 11,109.0 0.6 10,653.0 -4.1 10,285.3 -3.5 10,011.4 -2.7
Clothing 5,580.5 5,625.6 0.8 5,409.2 -3.8 5,211.9 -4.6 5,065.5 -2.8
men 1,028.6 1,031.5 0.3 968.8 -6.1 901.9 -6.9 828.1 -8.2
women, children 2,983.0 3,049.5 2.2 2,965.4 -2.8 2,873.7 -3.1 2,816.7 -2.0
others 519.3 484.8 -6.4 432.1 -10.9 394.5 -8.7 367.1 -6.9
belongings 1,049.5 1,059.5 1.0 1,042.8 -1.6 1,041.6 -0.1 1,053.5 1.1
[4.2.2 Best21 Department stores' Clothing Sales](Billion Yen)
1996 1997 1998 1999 2000

Total 1,346.9 1,396.5 3.4 1,342.6 -3.9 1,280.1 -4.7 1,249.9 -2.4
Men 316.7 326.3 3.0 308.9 -5.3 284.4 -8.0 267.5 -5.9
Women 770.1 821.6 6.7 803.5 -2.2 779.5 -3.0 775.0 -0.6
Children 97.6 97.3 -0.4 95.5 -1.8 93.5 -2.1 90.4 -3.4
Other 165.3 151.1 -8.6 134.5 -11.0 122.6 -8.8 116.9 -2.4
[4.2.3 Share in major Department stores' Clothing Sales by Items in 2000]
Total Men Women Children

Takashimaya 7.2% 9.6% 8.9% 10.0%
Seibu 4.8% 6.5% 6.2% 6.9%
Mitukoshi 4.7% 6.1% 5.7% 4.2%
Isetan 4.0% 5.3% 5.1% 5.0%
Daimaru 3.5% 4.9% 4.7%
Matuzakaya 2.8% 3.1% 3.7% 3.3%
Hankyu 2.4% 2.8% 2.9% 3.7%
Kintetu 2.1% 2.5% 2.9%
Tokyu 2.5% 2.9%
Others 68.4% 59.1% 60.3% 61.0%

113.91/$ in 1999 107.77/$ in 2000
34
4.3GMS
The clothing sales have been at a minus for these 3 years and the rate of decrease
compared to the previous year has been worse every year (see Chart4.3.1). The
clothing sales total of GMS are 2,731billion Yen (US$25,3 billion) approximately
30% of that of department stores.
Jusco, Yuni and Izumiya have shown sales increase in recent years (see
Chart4.3.2).
G M S can be divided into many groups (ex. Aeon Group, Seiyu-WalMart, Ito
Yokado Group). In order for GMS to perform well in this struggle economy, they
have made contracts with companies outside their genre (ex. Seven-eleven and Ito
Yokado) and companies from other countries (ex. WalMart and Seiyu).
[4.3.1 Sales](Billion Yen)
1996 1997 1998 1999 2000

Total 11,937.1 12,303.8 3.1 12,591.1 2.3 12,839.0 2.0 12,622.4 -1.7
Clothing 3,131.3 3,091.0 -1.3 3,021.7 -2.2 2,919.9 -3.4 2,731.1 -6.5
Men 666.4 659.6 -1.0 631.1 -4.3 598.2 -5.2 551.3 -7.8
women, children 1,525.1 1,510.9 -0.9 1,509.5 -0.1 1,486.1 -1.6 1,384.6 -6.8
Others 427.9 409.8 -4.2 383.8 -6.3 348.0 -9.3 324.1 -6.9
Belongings 511.8 510.6 -0.2 497.1 -2.6 487.5 -1.9 471.0 -3.4
[4.3.2 Clothing Sales of Major 8 GMS](billion Yen)
1996 1997 1998 1999 2000

Daiei 528.5 516.8 -2.2 476.0 -7.9 428.9 -9.9 364.1 -15.1
Ito Yokado 450.4 445.4 -1.1 448.8 0.8 425.3 -5.2 399.8 -6.0
Mycal 340.1 337.7 -0.7 326.8 -3.2 310.6 -4.9 287.3 -7.5
Jusco 272.1 295.8 8.7 304.6 3.0 416.4 36.7 466.3 12.0
Seiyu 214.6 210.4 -2.0 200.6 -4.7 181.7 -9.4 174.8 -3.8
Yuni 192.7 191.3 -0.7 194.7 1.8 186.5 -4.2 199.7 7.0
Kotobukiya 85.0 82.7 -2.7 81.3 -1.7 72.8 -10.4 69.9 -3.9
Izumiya 91.5 81.1 -11.3 76.6 -5.5 71.6 -6.5 74.4 3.9
Total 2,175.2 2,161.6 -0.6 2,109.8 -2.4 2,094.3 -0.7 2,036.9 -2.7
113.91/$ in 1999 107.77/$ in 2000
35
4.4Specialty stores
The 3 major specialty stores in Japan are Beams, United Arrows and Ships. They
are called “Gosanke” which means “three major families”.
The reason for their success is their ability to follow fashion trends. Their
products, advertisements and concepts, have gained the support of the people in
their 20s. This age group spends the most out of all the age groups (see
Chart4.4.1).
[4.4.1Sales of Clothing of Three Shops](billion Yen)
1996 1997 1998 1999 2000

Beams 18.1 19.6 8.2 24.5 24.5 26.6 9.2 26.7 0.0
U.A 7.9 9.6 21.4 14.3 48.3 17.0 18.7 19.3 13.5
Ships 10.6 11.3 6.9 8.2 -28.0 15.8 93.4 16.0 1.3
Unlike the “Gosanke”, Fast Retailing was able to succeed using basic items. The
net sale of their shops “Uniqlo” is 418,561 million Yen, and the rate of increase
compared to last year is 68,4%(see Chart4.4.2).
Uniqlo uses a “fast food concept”. They don’t target a specific sex, age group or
economic group. Instead, they try to reach every consumer.
These are the reasons for their success.
1) A clear concept
2) Supplying basic items at a reasonable price
3) Vertical integration for planning, developing and selling
4) Using information from around the world
5) Customer satisfaction
6) Low cost operation (warehouse-type store)
7) Strong publicity
8) Avoiding sold out items, flexible returns and exchanges
36
[4.4.2Sales of Uniqlo] (billion Yen)
Net Sales Stores Employee

Amount Rate Amount Rate Amount Rate
1992 14.339 62 202
1993 25.037 74.6 83 33.9 294 45.5
1994 33.336 33.1 111 33.7 397 35.0
1995 48.692 46.1 176 58.6 534 34.5
1996 59.959 23.1 229 30.1 572 7.1
1997 75.020 25.1 276 20.5 798 39.5
1998 83.120 10.8 336 21.7 950 19.0
1999 111.081 33.6 368 9.5 1055 11.1
2000 228.985 106.1 433 17.7 1265 19.9
2001 418.561 82.8 519 19.9 1598 26.3
94.1/$ in 1995 108.78/$ in 1996 120.99/$ in 1997 130.91/$ in 1998
113.91/$ in 1999 107.77/$ in 2000 121.53/$ in 2001
37
4.5 Domestic Apparel Companies
According to the newspaper, “SENKEN Shinbun”, Net sales of the top 30

companies is 2,180,519 million Yen and the rate of increase compared with last
year is –1.2% (see Chart4.5.1).
The babies and children category decreased the most. Ladies apparel is on the
rise, with a rate of 1.4%. Chart 4.5.2 shows the six companies that have increased
sales for the 4 consecutive years.
Since apparel companies don’t make large profits by selling to department stores,
they have stopped being dependent on them. In the past few years, many apparel
companies have opened their own stores to sell their products.
World; Opaque, Acquagirl, Index, Dressteria etc

Onward; Via bus stop
Five foxes; Comme ca comme ca
[4.5.1Sales of 276 Apparel companies](billion Yen)
1997 1998 1999 2000

Sales Sales Rate Sales Rate Sales Rate
Total apparel 1,811.911 1,662.826 -8.2 1,571.868 -5.5 1,492.465 -5.1
Men apparel 678.531 643.147 -5.2 605.370 -5.9 563.354 -6.9
Ladies apparel 1,685.626 1,633.805 -3.1 1,600.664 -2.0 1,623.778 1.4
Uniform 179.326 170.858 -4.7 170.889 0.0 170.888 0.0
Jeans 127.077 116.054 -8.7 115.998 0.0 112.845 -2.7
Inner 231.516 233.473 0.8 224.727 -3.7 218.887 -2.6
Babies and Children 261.458 247.079 -5.5 232.075 -6.1 212.714 -8.3
TOTAL 4,975.445 4,707.242 -5.4 4,521.591 -3.9 4,394.931 -2.8
113.91/$ in 1999 107.77/$ in 2000
38
[4.5.2 Clothing Sales of 6 Apparel companies](billion Yen)
1997 1998 1999 2000

Sales Rate Sales Rate Sales Rate Sales Rate
Five fox 101.971 8.4 113.595 11.4 122.505 7.8 144.256 17.8
Cross plus 61.075 3.3 61.767 1.1 67.673 9.6 68.449 1.1
Frandol 35.381 73.4 55.542 57.0 65.789 18.4 67.927 3.2
Sanei international 49.438 10.2 55.113 11.5 61.276 11.2 66.413 8.4
Tomorrow land 12.100 25.0 13.828 14.3 16.519 19.5 18.147 9.9
Impact 21 13.655 3.8 13.676 0.2 14.196 3.8 14,424 1.6
Rate; rate of increase compared with last year
113.91/$ in 1999 107.77/$ in 2000
[4.5.3 Best 25 of Apparel Companies](billion Yen)
Net sales
1 World 193,110
2 Onward 161,280
3 Five foxes 144,256
4 Itokin 134,390
5 Wacol 122,606
6 Sanyoshoukai 120,663
7 Renown 99,017
8 Gunze 81,500
9 Sakurayashouji 68,449
10 Java group 67,980
11 Frandol 67,773
12 Sanei international 65,114
13 Oonishiiryou 61,350
14 Naigai 60,402
15 Takihyo 53,272
16 Tokyostyle 52,820
17 Fukusuke 51,557
18 Mizuno 50,000
19 Goldwin 49,217
20 Desant 48,078
21 Kosugisanngyo 47,925
22 Takisada 45,834
23 Gunze Sangyou 45,581
24 Kaitakku group 45,349
25 Molilin 45,816
39
4.6Trading Companies
With in the fabric sales, domestic businesses tend to show a large decrease.
Because many buyers directly buy fabrics and garments in recent.Chart4.6.1
shows the growth of Mitsubishi Shoji and the decline of Marubeni and Itochu
Shoji.
The total amount of imports increased greatly in 2000. On the other hand, the
price of exports dropped because of economic struggles in the U.S.
The role of a Trading company

1) Financial and Property Support
2) Finding Buyers
3) Giving ideas for new business & collaborating with other companies
4) Helping companies adapt to cultural differences
5) Handling arrangements for imports and exports
Since last year, trading companies have become more involved in the
consumer-oriented retail sales market. Examples of this involvement include the
collaboration between Sumitomo shoji and Seiyu, Itochu Shoji and Seibu, Mitsui
Bussan and Ito Yokado, Marubeni and Daiei Group.
[4.6.1Total Sales of Major 9 general trading companies](Billion Yen)
1996 1997 1998 1999 2000

Mitsubishi Shoji 11,899.5 12,011.9 0.9 10,499.8 -12.6 10,485.2 -0.1 10,927.4 4.2
Mitsui Bussan 13,339.7 14,005.2 5.0 11,179.9 -20.2 10,659.0 -4.7 10,219.4 -4.1
Itochu Shoji 14,176.4 14,465.5 2.0 12,372.6 -14.5 10,252.0 -17.1 9,857.0 -3.9
Sumitomo Shoji 12,710.6 11,672.3 -8.2 10,460.6 -10.4 9,660.1 -7.7 9,001.3 -6.8
Marubeni 13,498.9 13,046.5 -3.4 10,917.0 -16.3 8,858.8 -18.9 8,154.2 -8.0
Tohmen 4,676.0 4,752.2 1.6 3,500.5 -26.3 2,388.6 -31.8 2,016.9 -15.6
Nichimen 3,522.7 3,341.2 -5.2 2,680.9 -19.8 2,227.1 -16.9 1,753.3 -21.3
Sumikin Bussan 1,052.1 987.6 -6.1 854.5 -13.5 820.1 -4.0 827.6 0.9
Chori 611.9 591.9 -3.3 502.9 -15.0 476.6 -5.2 456.6 -4.2
Total 75,488.2 74,874.6 -0.8 62,969.1 -15.9 55,827.5 -11.3 53,213.7 -4.7
113.91/$ in 1999 107.77/$ in 2000
40
[4.6.2Textile goods Sales of Major 9 general trading companies](Billion Yen)
1996 1997 1998 1999 2000

Itochu Shoji 1,786.366 1,653.689 -7.4 1,276.539 -22.8 956.200 -25.1 761.900 -20.3
Marubeni 1,151.767 1,136.168 -1.4 984.077 -13.4 779.600 -20.8 533.400 -31.6
Sumitomo Shoji 469.148 476.302 1.5 466.557 -2.0 476.800 2.2 461.900 -3.1
Mitsui Bussan 436.422 414.773 -5.0 373.708 -9.9 366.200 -2.0 360.700 -1.5
Tohmen 552.126 504.304 -8.7 449.886 -10.8 388.500 -13.6 355.300 -8.5
Mitsubishi Shoji 279.600 292.600 4.6 259.100 -11.4 263.400 1.7 347.900 32.1
Chori 368.979 342.730 -7.1 283.662 -17.2 268.300 -5.4 253.900 -5.4
Sumikin Bussan 218.260 206.825 -5.2 188.301 -9.0 182.700 -3.0 178.400 -2.4
Nichimen 330.087 249.118 -24.5 191.344 -23.2 133.200 -30.4 126.300 -5.2
Total 5,592.755 5,276.509 -5.7 4,473.174 -15.2 3,814.900 -14.7 3,379.700 -11.4
113.91/$ in 1999 107.77/$ in 2000
[Chart 4.6.3 Share of Textile Goods Sales of Major 9 Trading Companies]
41
4.7Advertisement
Advertisement is vital in the fashion industry. The fashion magazines play a

large role on setting trends and sparking consumer interest. It is important to pick
the right magazine for a specific brand. Chart 4.7. shows the price for
advertising in the magazines. Chart4.7.2 shows the popular magazines for the
different sexes and age groups.
[Chart4.7.1 Price List for advertising in Fashion Magazines]
Name of Magazine Space Size(mm) Price

CUTIE Back page 280*200 ¥ 2,000,000
Two page spread (next to cover page) 297*420 ¥ 3,200,000
Semi Weekly Next to Back page 297*210 ¥ 1,500,000
First Publish in 1989.9 Next to Contents 297*210 ¥ 1,700,000
Circulation 700,000 Beginning or Center-Two page spread 297*420 ¥ 3,100,000
Price 420Yen 4Cuts 1Page 297*210 ¥ 1,500,000
1Cut 1Page 297*210 ¥ 1,000,000
4Cuts 1/3Page 266*60 ¥ 650,000
1Cut 1/3Page 266*60 ¥ 450,000
Postcard 150*100 ¥ 2,000,000
spring Back page 265*235 ¥ 2,300,000
Circulation 450,000 4Cuts 1Page 297-235 ¥ 1,300,000
Price 460Yen 1Cut 1Page 297*235 ¥ 770,000
4Cuts 1/3Page 273*70 ¥ 550,000
1Cut 1/3Page 273*70 ¥ 400,000
Postcard 150*100 ¥ 1,500,000
mini Back page 277*200 ¥ 2,300,000
Monthly Next to Back page 297*420 ¥ 2,600,000
Circulation 450,000 4Cuts 1Page 297*210 ¥ 1,300,000
Price 380Yen 4Cuts 1/3Page 266*60 ¥ 550,000
Postcard 150*100 ¥ 1,500,000
42
smart Back page 277*200 ¥ 2,300,000
Circulation 550,000 4Cuts 1Page 297*210 ¥ 1,300,000
Price 390Yen 1Cut 1Page 297*210 ¥ 770,000
4Cuts 1/3Page 266*60 ¥ 550,000
1Cut 1/3Page 266*60 ¥ 400,000
Postcard 150*100 ¥ 1,500,000
JJ Back page 286*222 ¥ 3,200,000
Monthly Two page spread 296*464 ¥ 4,200,000
First Publish in 1975.4 1Cut 1Page 296*232 ¥ 2,300,000
Circulation 640,000 Postcard 150*100 ¥ 2,300,000
Price 600Yen
CLASSY Back page 286*222 ¥ 2,500,000
Price 670Yen
VERY Back page 286*222 ¥ 2,700,000
Price 620Yen
GAINER Back page 286*212 ¥ 2,100,000
Price 650Yen
BRIO Back page 277*200 ¥ 2,300,000
Monthly 1Cut 1Page 287*210 ¥ 1,500,000
First Publish in 1999.3 Postcard 287*210 ¥ 1,700,000
Circulation 85,000
Price 650Yen
43
[Chart4.7.2 Matrix of Magazines]
>>> Female
44
>>> Male
45
5.Strategies
5.1Foreign Companies that entered the Japanese Market
Foreign companies who have been active in the Japanese Fashion market are
import luxury brands (see Chart5.1.1) such as LVMH ( Louis Vuitton Moet
Hennessy) and Gucci Group, category killers such as ToysRus, and SPAs
(Specialty stores and Private Label of Apparel) such as GAP, Eddie Bauer and
Zara.
[5.1.1Sales Ranking of Import Luxury Brands](billion Yen)

1998 1999 2000
Sales Sales Rate Sales Rate
1 LVMH 76.000 86.300 13.6 100.300 16.2
2 GUCCI 26.000 28.000 7.7 33.000 17.9
3 PRADA 21.000 28.400 35.2 30.100 6.0
4 REVIS 30.918 25.719 -16.8 27.116 5.4
5 Sanki Shoji 32.355 29.265 -9.6 26.700 -8.8
6 HERMES 23.200 26.240 13.1 25.450 -3.0
7 CHANEL 26.890 24.780 -7.8 24.480 -1.2
8 ARMANI 19.382 19.567 1.0 19.861 1.5
9 MAX MARA 15.600 16.800 7.7 16.950 0.9
10 Eddie Bauer 14.210 14.630 3.0 10.600 -27.5
1) LVMH
LVMH has been one of the most successful foreign fashion companies in
Japan. It was established in 1988 right after Louis Vuitton Inc. and Moet
Hennessy Inc. joined forces.
The company was divided 5 different divisions:
( ) Wines/ Sprits
( ) Fashion/Leather goods
( ) Fragrance/Cosmetics
( ) Watch/Jewelry
( ) Selective/Retailing
Each division of LVMH has the freedom to create their own strategies for
46
increasing sales. They are responsible for the growth and profits of each brand.
A board that consists of the top management from each division makes
decisions that influence the entire company. All of the divisions benefit from
the wealth, personnel, sales and publicity that come as a result of being a part
of LVMH. As a member of luxury import market, LVMH tried to keep its
traditional brand image. At the same time, they are looking to expand and
advertise new products. This balance has made LVMH a very successful
foreign company in Japan
1) ToysRus
ToysRus is an American toy store that has targeted the suburban area of
Japan. There are a lot of Japanese companies that make clothes and toys for
babies and children. However the consumers are not satisfied with these
brands. ToysRus offers wide variety of toys and clothes, and have very large
supply. Their size gives them an advantage over the Japanese companies.
2) GAP, Zara
These two SPA brands entered the Japanese Market with different
strategies.
GAP did marketing research 3-4years before they entered the Japanese
Market. They opened GAP Japan, without support from Japanese companies.
The public already knew about the brand, and that it was doing well in the
U.S, so GAP Japan experienced tremendous growth. They advertised
constantly, using TV commercials, billboards, and magazines. In the
beginning, GAP USA sent daily VMD (Visual Merchandise) instructions to
GAP Japan, and made sure that business was running efficiently and
effectively. Now, GAP is filling for chapter 11 Bankruptcy, so GAP Japan is
not performing well. However, GAP is one of the most successful foreign SPA
brands.
Zara employed different strategy. Since no one knew about Zara prior to
its arrival in Japan, it had to make a deal with apparel maker Bigi. However,
they were late in making this deal. As a result, they did not have enough time
to prepare for entering the Japanese market. Zara has yet to flourish, because
of this inadequate preparation.
47
5.2Possible Strategies for Brazilian Companies to the Japanese Market
[High Awareness]
-First of all, you have to make sure those Japanese buyers and consumers are
aware of the existence of Brazilian fashion.
-Then, the name and logo of the brand needs to be widely known. It should
be easy to remember.
-The brand needs to carry out an advertising campaign to publicize the
brand history and other information in order to give consumers some
background. Usually promotional division of the brand handles the
advertisement.
-Since fashion trends come and go, the brand must continually offer new
products and topics of conversation in order to be remembered by
consumers.
[Necessary Factors for Success in the Japanese Market]

-Be fashionable: Offer new products every season that reflect the latest
fashion trends.
-Be high quality: Japanese consumers are very quality conscious.
They tend not to buy the low quality products even if the
price is low.
-Be exposed to the market constantly through advertising, magazines, etc.
-Control the image of products, and possibly even stores of the brand.
[Store Selection]
-It is very important to offer products through the right channel.
-If the products are prestigious or creative, they should be carried in
freestanding stores in a prestigious area, in department stores, or in
well-known fashion select shops.
-If the product is mass targeted with a reasonable price line, it should be
carried in station building such as Lumine, in general merchandising stores,
or in freestanding stores in a busy area.
[Sales Promotion]
-It should regularly carry out press contact activities thorough the Japanese
48
press. It is very important to work with the press who understands the
character of the brands and the designer, and have many contacts with
effective people from magazines, stylist, etc.
-Japanese Fashion market is highly competitive. To be successful in this

market, it is recommended that each company clarify its brand concept,
clarify the consumer target, and select the distribution channel. If necessary,
they should select a Japanese company as a partner and conduct further
investigations.
49
6.Conclusion
In this study it was stressed that the Japanese market is large in terms of
purchases (107,969 Billion Yen, or US$ 1,001 Billion in 2000) and opportunities are
available for companies determined to operate in this relevant market in the
medium and long terms. Economic stagnation over the past decade has not led
necessarily to diminished sales -- many companies have even increased
investments to promote sales in the country -- by the fashion industry but is
provoking changes in the buying habits of consumers.
The market is dynamic and permanently in use with fashion trends established
through the main fashion capitals around the world. It is also very demanding in
terms of quality and design. In terms of marketing, an interesting "fashion image"
should be projected by the product and an impeccable after sales service is
required by both the retailer and the customer.
The Brazilian fashion industry is apparently determined to become another

supplier to this important apparel market and should consider all of facts
contained in this study. It should also strongly consider the following additional
recommendations:
1) Working on design
In the Japanese market of today there are already many different domestic and
imported merchandise with interesting qualities and reasonable prices. In order
for the Brazilian fashion companies to achieve success as newcomers in the
market they must attempt to differentiate their products from those that are
available on the shelves of the department stores and boutiques. Japanese buyers
are particularly sensitive to new and interesting articles.
2) Forms and shapes

As demonstrated in the contents of this study, most Japanese are thin and have
different body shapes from those of Brazilians. Brazilian manufacturers do not
need to adjust sizes of casual wears such as T-shirts and jeans. In the case of
jackets and dresses, however, a careful adjustment should be made in the both
size and style. Sizing and patterns are the second most important factors to
50
determine the purchase by the buyers.
3) Be consistent
It is important to communicate with the buyers on a frequent basis and maintain
a close relationship with prospective clients. Participating in Tokyo's International
Fashion Show is an important initiative and provides chances for buyers from all
over Japan to become accustomed to the presence of Brazilian fashion. Purchases
may not be made on-site but the presence in a trade fair in Japan may facilitate
future sales. To support sales to Japanese buyers it is important that integrated
showrooms in Paris, Milan and New York should be organized because in those
cities buyers verify which are the latest trends in world fashion. By
comparing/contrasting quality and price Japanese buyers, already accustomed to
seeing Brazil at the trade fair in Tokyo, might feel comfortable to make purchases
overseas rather than in Japan.
In sum, the Japanese economy has provoked changes in the consumers' buying
habits but overall the people continue to be avid shoppers. Special care and effort
to enter the Japanese market is necessary and the risks are not to be underscored
but the rewards. Profit is the benefit of taking these risks.
51
Map of Fashion Area
[Shinjuku]
52
[Marunouchi]
53
[Ginza]
54
[Aoyama]
55
[Harajuku]
56
[Shibuya]
57
[Daikanyama]
58
[Osaka]
59
[Shinjuku]
60
[Shinjuku]
61
[Ginza]
62
[Aoyama]
63
[Aoyama]
64
[Shibuya]
65
[Shibuya]
66
[Daikanyama]
67
[Osaka / Umeda]
68
[Osaka / Minami Horie]
69
[Osaka / Shinsaibashi]
70
[Osaka / Nanba]
71

Japanese Fashion Insights: Population, Income & Consumption

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Japanese Fashion Insights: Population, Income & Consumption

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Japanese Fashion Market

2. Principal characteristic of the Japanese Market

3. The Fashion Market

4.The fashion Industry

Reference; Map of fashion areas

The Japanese economy is viewed as being on its recovery stage. Although

Competition in the Japanese market, nevertheless, is intense and companies that

Chapter 5 discusses strategies that have been undertaken by non-Japanese

[Chart2.1.1 Japanese population by Age and Sex]

2.1 Japanese Standard of Living

[Chart2.2.2 Social capital]

Japan USA France Italy Germany

[Chart2.2.3 Satisfaction with their standard of living]

age 20-29 30-39 40-49 50-59 60-69

Japanese industrial structure changed dramatically after World War , first

[Chart2.3.1 Breakdown of Domestic GDP by industry](%)

Sector Japan U.S.A Korea France Italy Brazil

Industry 32.1 42.7 26.1 29.5 28.6

Services, etc 66.4 52.7 70.9 67.6 64.0

Total 100.0 100.0 100.0 100.0 100.0

[Chart2.3.2 GNP and Capita Income]

Japan U.S.A Korea France Italy Brazil

GNP ($billion) 514.918 743.351 48.313 153.361 114.048 70.959

[Chart 2.4.1Export and Import]

[Chart 2.4.4Total Value of Imports in the last 5 years]

Fabric Knit Total

Housing in Japan’s principal metropolitan areas has been characterized as

[Chart2.5.1 House Floor Area](square meters)

Japan U.S.A Germany France

[Chart 2.6.1 Japanese Average Height and Weight](CM, KG)

Male Female Male Female

[Chart 2.6.3 Measure of Size]

[Chart 2.6.4 Equivalent to Other Countries]

[Chart 3.1.1 Generation]

6) Second Baby Boomers

[Chart 3.1.2 Income and disposal income]( per month)

Average exchange rate; 107.77/$ in 2000

[Chart 3.2.1 Relation between Capital income and Consumption]

Food 30.9% 29.0% 28.1% 27.6% 27.2%

Average Households Income 531,521 574,919 629,593 722,767 914,397

Food 26.3% 25.5% 24.5% 22.7% 20.7%

Average exchange rate; 144.4$ in 1990

According to an annual survey of household accounts by the Statistics Bureau of

[Chart 3.3.1 Expense to Clothes]( per month)

[Chart 3.3.3 Percentage of Clothing and Footwear by Countries]

Japan USA Italy Germany

It is a remarkable phenomenon that Japanese people purchase clothes

[Chart3.4.1 The annual events and the weather]

[Chart 4.1.2 share by Channel]

In order to survive the decrease in consumer consumption and the competitive

1996 1997 1998 1999 2000

[4.2.2 Best21 Department stores' Clothing Sales](Billion Yen)

1996 1997 1998 1999 2000

[4.2.3 Share in major Department stores' Clothing Sales by Items in 2000]

Total Men Women Children

Average exchange rate; 108.78/$ in 1996 120.99/$ in 1997 130.91/$ in 1998

[4.3.1 Sales](Billion Yen)

1996 1997 1998 1999 2000

[4.3.2 Clothing Sales of Major 8 GMS](billion Yen)

1996 1997 1998 1999 2000

[4.4.1Sales of Clothing of Three Shops](billion Yen)

1996 1997 1998 1999 2000