"How to Succeed
in the Japanese Interior Market"
The Special Seminar for Foreign Exhibitors at JAPANTEX
Hiroyuki Mutoh, SELKON CO.,
LTD.
Promotion Committee JAPANTEX
The theme is limited to the over-the-counter sales market where individual consumers make purchases. The construction market is excluded. One who has the concept of "market in" succeeds. The "product out" concept does not lead to good sales. To know what the Japanese want. To know the special characteristics of the retail industry. To know the mechanism and functions of distribution and the way to generate profit.
a. The Japanese closely examine products before purchasing them. Products of an uneven size or with distorted patterns, wrinkles or loose threads are left unsold. This holds true regardless of whether the products are sold at regular prices or special prices. b. They want to make sure that products can be used for a long time, stand washing and do not become discolored under the sun. c. The price is not the absolute yardstick for making purchase decisions. They know that the price is determined by the combination of product quality and service. d. There is no DIY for fabric interior. Few individuals sew curtains, make cushions or spread carpets. Not many homes have a sewing machine. Men are taken up with their work. e. Purchasing interior goods is women's territory. But, when it comes to the purchase of an expenses handwoven carpet on furniture, men exceptionally make comments on it.. f. Whether in urban or rural areas, the Japanese take off their shoes when entering the house. They have Japanese- style rooms in their homes.
Visit Japanese homes and ask housewives about the interior of their homes.
a. A growing number of Japanese enjoy making trips overseas and copy the lifestyle of people in the countries they visit. They have many opportunities to see and purchase real things. b. There are a large number of subscribers to interior magazines.
Purchase interior magazines read by ordinary Japanese.
Ensure that there is something special about the product you sell.
a. Mass-merchandising stores, chain stores (1) There are national chain stores such as Ito-Yokado, Daiei, Jusco, Seiyu and Uni, and chain stores operating in specific areas. They are located in the suburbs, and adopt the self-selection style of selling as a rule. Interior goods sold at these stores are mostly private brand items. (2) A full line of fabric interior goods in addition to foods and clothes are offered. They include curtains, rugs, cushions, table cloths, bedding, etc. (3) Products of the low to medium price range are sold. (4) Mass-merchandising stores and chain stores adopt the central buying system, do not return goods to the suppliers, and are not obliged to take back even private brand products. They use EOS (on-line automatic ordering system) and have goods delivered daily. They own import companies. b. Home centers (1) Home centers sell DIY materials, household goods and finished fabric interior goods. Many home centers operate a large number of stores in a specific area. They are not particularly interested in selling private brands. Many stores, operated by TOSTEM VIVA Corporation, Cainz Home Ishizuka Corporation and others, are set up in suburban low-cost locations. (2) Joyful Honda in the Kanto area is known for its emphasis on curtains. (3) A large proportion of goods are in the low price range. (4) Home centers initially negotiate for central buying but, once business is started, orders are placed separately by each store. c. Department stores (1) Takashimaya, Mitsukoshi, Daimaru, Isetan, Hankyu , etc. operate business on a nationwide scale, while others do business locally. Some department stores operating locally are tied up with major department stores. Some department stores were developed from a draper's shop while others evolved from the terminal shop of an electric railway company. Both types retain some of the characteristics of their predecessors. Counter selling is the primary form of selling at department stores. All are located in prime commercial districts of the downtown area. They are at the top of the Japanese retail business pyramid. (2) Products in the medium to high price range are sold. (3) National brands are primarily handled. Private brands are partly introduced to give a distinctive feature to the product lineup. Department stores have no sense of contract and return unsold goods, whether they are NBs or PBs, to the suppliers. They are not obliged to take them. In most cases, orders are placed separately by each store. (4) They tend to downsize the area for sales of fabric interior goods whose sales efficiency is low from the fashion viewpoint. The demand for gift items is a major contributory factor in the interior-related business. d. Specialty stores (1) Many are small-scale stores which came into being spontaneously in residential districts. A typical store has an area of 100 square meters. The main items sold are custom-made curtains, ready-made curtains and rug carpets. In addition, interior goods such as small rugs, sheet cushions, slippers and aprons are sold. Many stores offer wallpapering and wall-to-wall carpeting service as well. (2) The product lineup and business form vary greatly from one store to another because they are largely determined by the owner's preferences. There are few cases in which a large chain of stores is operated. (3) Goods are purchased from wholesalers specializing in interior goods. Specialty stores have few inventories. e. Furniture stores Some chain store operators such as Nitori in Hokkaido and Nafco in Kyushu put special emphasis on fabric interior goods. f. Mail-order sale
Visit retail stores to find ones which sell the kind of product which you wish to sell. Then track down the wholesaler from whom the retailer purchases goods. The retailer may give you the name of the wholesaler but you can find it yourself by checking the tag. The selling price is a valuable piece of information.
a. There are different kinds of distributors, each with their own distinctive features and territory, depending on the retailers with whom they do business. b. Not many Japanese retailers are of the risk-taking type. To spread out the risk, distributors, that is, wholesalers, accept the risk-taking functions, including the functions of selling goods left unsold through diversified channels and covering the loss from sales at sacrifice prices. c. There are many types of wholesalers. At the top of the pyramid are brand makers who have their own brand, determine the design and specifications of products and give instructions for production. Below them are wholesalers collecting and delivering products of brand makers, and wholesalers scraping products together on behalf of retailers. d. In Japan, makers are supposed to deliver products punctually, in an unusually short time. On weekdays, delivery within 24 hours after an order is received is normal. Custom-made curtains are delivered normally in seven days. Some makers deliver them in three days. e. Major distributors refuse to handle products which do not meet all the requirements in terms of legally required labeling and the JAN bar code. (1) Inspection standards specified in the Household Goods Quality Labeling Law (2) Country of origin (3) Warning messages given under the PL (Product Liability) Law and the indication that the product was properly inspected (4) JAN code (5) Pictorial representation of the way the product should be handled (6) Price tag
Select distributors according to the type of retail stores at which you wish to sell your products.
Calculate the difference between the retail price and the FOB price and convert it into an index for each functional stage. An example is given below.
Please keep well in mind that some companies use more than one functional position as shown in Suggestion No. 6.
Price competitiveness which comes from low wages is lost rapidly beyond the exchange rate of $1 = 100 yen. As the distribution structure is flexible, shift to domestic production readily occurs. Therefore, it is important to make distinctive products which could not be produced domestically. We wish you will success. |
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