2017 Global Forum Recap of YUWA Group of Japan

Keiichi Kobayashi, president and CEO of the YUWA Group, co-presented this retail market overview with James Karani. Mr. Kobayashi leads YUWA, which was established by his father more than 50 years ago. He began importing consumer goods into Japan, primarily from Europe.  Today YUWA is the sole agent for Chantal Cookware in Japan.  In addition to working with several U.S. companies, Mr. Kobayashi has also collaborated with the U.S. Commercial Service Department in Tokyo.

James Karani, born in Nairobi, Kenya, received his master’s degree in structural engineering.  After working in Japan for an architectural firm, Mr. Karani developed an interest in consumer goods and joined YUWA with the aim of introducing interesting products to the Japanese market.  He has been in a management position with YUWA for more than 12 years.

Mr. Kobayashi introduced the YUWA Group’s history and unique market position. His remarks were translated by Mr. Karani.

Range of Services

Since 1965, YUWA with its Strix Design and Strix Consulting divisions, serves as agent, distributor and wholesaler. YUWA is involved in kitchen, dining, home cleaning and laundry, picnic and outdoor products. Recent new categories added include home health care.

YUWA’s team of 170 staff propose and organize projects that include selection and provision of product assortments to fulfill client needs, providing products from 600 suppliers to 200 clients with 23,000 stores. Total reach is 120 million potential consumers. Annual sales are US $750 million.

Drug/supermarket/convenience stores make up 40% of their business and mass market chain channel at 25% share. Strongest products categories are Cook and Bakeware, Cleaning Products and Lawn/Garden/Outdoor Living, and Kitchen Tools and Accessories.

YUWA offers a proprietary system to simply supplier-retailer for product information, order management, quality control, billing and payment processing and sales analysis reporting. YUWA takes pride in its quality control procedures that prevent defective products from reaching consumers and delivers quality, safe products to customers.

Specialized Services

YUWA is the only housewares-related company that offers specialized market research. They study market size and changing trends and provide retailer-based research and housewares category-specific research. Its STRIX Consulting is the backbone of the YUWA logistics network. STRIX Design provides design-related services to clients, such as organizing trade show displays, branding and product development support for suppliers.

Analysis of Japan’s Housewares Market 2016

In the total market size of $1.2 trillion of YUWA’s key categories, the presenters provided a list of specific products and their sizes and growth rates.  New sales opportunities emerged in existing categories because of technical improvements, lifestyle preferences and changes in retail offerings. For example, aluminum foil sales increased because of new coatings on the foil and food storage containers and home organization products grew because of consumer education about how to maximize space in the traditionally small refrigerators and homes. Sales of electric kettles increased because of the better quality of safer products inspired consumers to move from stovetop kettles to electric. As the popular convenience stores offered better tasting coffee, consumers purchased more coffee-related products to use at home. Pedometers, once sold only in health care shops, are now convenient and wearable and are sold with housewares items.

Housewares floor space allocations in general merchandise stores and supermarkets is decreasing.

Economic Overview

Japan ranks #3 in global GDP. No. 1 is the U.S., four times the size of Japan’s GDP. #2 is China, with twice the size of Japan’s GDP and #4 is Germany, which represents 2/3 of Japan’s GDP.

Japanese consumers spend 58% of their GDP, compared to U.S. consumers spending 71%, Chinese consumers spend 37%, Germans spend 59% and UK consumers spend 65% of their national GDP.

Demographic Analysis

Mr. Karani explained Japan’s regions and the highlights of each area’s demographics: population sizes, key industries and tourist attractions.

Overview of 2016 Retail Market

Karani outlined top 10 retail types, market shares and dollar value sales in the 93.72 trillion housewares market. He pointed out recent changes in formats and successes in each segment. He highlighted the key retailers in each channel, described their histories and points of differentiation, and listed each retailer’s number of stores. He also compared some key retail chains to comparable U.S. retail brands.

• Supermarkets
• Mail Order and E-Commerce: Amazon is #1
• Convenience Stores: provide necessary services, such as bill payments, printing, ticket sales, and are increasing eat-in facilities, serve good quality coffee
• General Merchandise Stores: struggling, as in other countries
• Consumer Electronics: suffered during recession, added alcohol and health/cosmetics to attract customers sales
• Department stores: food sections deliver high percentage of sales
• Drug stores: a small percentage of total retail market but fastest growing brick & mortar stores
• Home Centers
• Cooperative Societies
• Variety Stores
• Other

Conclusion and Forecast

Japan is still a growing market, with total market size annual growth of 0.03%. In 2015-2016, the mail order/e-commerce segment grew by more than 10%.  In 2017, data shows that online retail overtook the share once held by supermarkets. Based on data indicating changes in retail floor space dedicated to housewares, steep growth in ecommerce is predicted.

Learn more about YUWA at www.yuwa.jp