ARCTIC DIMENSION Design Lifestyle Crosssectoral Business Opportunities

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ARCTIC DIMENSION Design LifestyleCross-sect
oral Business Opportunities

• Business Opportunities Quick Check Japan

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Country Facts 1

• GDP and information on major cities
• GDP JPY 532,302 billion (2004)
• GPD (gross prefecture production)
• Tokyo 81,843 billion
• Osaka38,296 billion
• Aichi33,923 billion
• Educational level
• Compulsory education (until Junior High School)
  99.98
• High School 97.30
• University (include 2 years collage) 49.00

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Country Facts 2

• Population
• Whole Nation 127,687,000 (2004)
• Age range 0-14 14 / 15-64 67 / over65 19
  
• Major city population
• Tokyo(1st) 8052000
• Osaka(3rd) 259400
• Nagoya(4th) 216900
• Sapporo(5th) 1806800
• Fukuoka(8th) 1331400
• Sendai(12th) 946600
• Marital status division (2004)
• House Hold 46,323,000
• Single 10,817,000
• Parents and child
  (couple/parentschild/single parentchild)
  2,8060,000
• Grand parents and parents and
  child 4,512,000
• Others 2,934,000
• - rate of late marriage is increasing in
  nation wide

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Everyday lifestyle

• Time Consumption of daily life
• Living time consumption
• 1. Sleeping/Eating etc 10.34h /
  day
• 2. Work/Household etc 7.00h / day
• 3. Free Time 6.26h / day
• ?discretion on Work / Household time and
  incretion of free time especially in 60s age
• Free time time consumption
• Relaxing time (reading, TV) 3.53h / day
• Active free time (study, hobby, sports,
  volunteer activities etc.) 1.10h / day
• ? stagnation in free time activities / decrease
  of active activates even people wish to do
• Living expenditure per household
• Average 304203JPY/month
• 1. Education
• 2. Refresh (e.g. alcohol drink, pet,
  gardening, hobby)
• 3. Information (e.g. PC, Internet usage,
  mobile)
• 4. Outsourcing (e.g. prepared food, eat
  out, day care for child)
• 5. Health (e.g. health foods, faintness)

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Keywords for Understanding the Life style of the
Japanese people
Concept Discriminating Taste
Innovativeness (IT)
Health
Premium
Convenience
Authenticity
Originality
Safety / security
Relaxation (Healing / Calming)
Ecology
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Key Factor of Change and Diversification
of life style in Japan

• Rapidly increase of aging population and decrease
  of birth rate
• Diversification of Household type
• ? 3 generation family (grand parents
  parents child)
• 2 generation family increase in
  single house household
• Rapid increase of number of woman working outside
  the home
• Collapse the myth of steadily and predictable
  increase of income
• Rapid penetration of Information Technology
• Chang and diversification of Lifestyle

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Consumption Patterns of the Japanese

• Increased selectivity and polarization in
  consumption
• ?minimum consumption in daily life products
  and not much limitation in premium consumption
• Obsession with food freshness and quality
• ?highly concern about food safety especially
  recent food safety problem (BSE, Bird Flue,
  Pesticide residue in vegetable etc.)
• Increase in dining outside the home
• ?changing of life style ( increase of female
  employment rate / aging society)
• Growth in convenience shopping
• ?changing of life style ( increase of
  unmarried people, increase of female employment)

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Recent attractive consumer target

• Active Senior
• ?actively participate in society and spend
  time and money to enjoy
• their own life. Average saving for over
  70s is JPY 20 million
• A large baby- boomer cohort (born in between 1971
  -1974)
• ?JPY 80 trillion market in 2007 because of
  their retirement money
• Parasite Single
• ?age 20 34 10 million parasite singles
• Six Pockets
• ?market for kids / parents 2 grand parents
  (6 pockets) spend their
• money to child or grand child
• ?because of decrease of child birth, parents
  and grand parents will
• be able to spend the money for grand
  child

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Keyword for Japanese Consumer Behavior

• 
  High Price
• Convenience
  Premium
• 37(2000)? 35(2003)
  13?18
• Main customer 40s, 50 male
  Main Customer 20s, 30s unmarried
• Market channel Convenience Store
  Male, Female
• Internet
  channel Market Channel Female
  Department Store
• Consumption Eagerness weak
  Male
  Consumer Electronics
• 
  
  Mass Merchandisers
• 
  Consumption
  Eagerness Strong
• weak discriminating taste
  
  strong discriminating
  taste
• Reasonable Price
  Exhaustive Search
• 40?34
  10?13
• Main Customer 60s
  Main Customer 10s, 20s
• Market Channel Discount Store
• Consumption Eagerness Weak
  Consumption Eagerness strong

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Keyword of Lifestyle Concept in Japanese Market

• Slow Life ? Eco ? LOHAS
• Brand ? Accessible Luxury Brand ?Luxe
• Universal Design
• Traceability
• Healing Health business
• ? Detox / Massage / Esthetics

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Trend of Lifestyle Creation in Japanese
MarketLOHAS (Lifestyles of Health and
Sustainability)

• Lifestyles of Health and Sustainability, LOHAS,
  is a new-coming end consumers trend in US and in
  Japan.
• Its market conservatively estimated at 228.9
  billion in the U.S., and growing. There is no
  statistical data for Japanese market, but
  estimated large scale of market segment and
  rapidly growth.

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Trend of Lifestyle Creation in Japanese
MarketLOHAS market segment

• Organic / recycled fiber products
• Environmentally friendly appliances
• Eco-tourism and travel
• Health and wellness solutions
• Acupuncture, homeopathy, naturopathy, etc.
• Holistic disease prevention
• Complementary medicine
• Mind, body and spirit products such as CDs,
  books, tapes, seminars
• Yoga, fitness, weight loss
• Spiritual products and services

• Green building and industrial goods 
• Renewable energy
• Resource-efficient products
• Socially responsible investing
• Alternative transportation
• Environmental management 
• Natural, organics nutritional products
• Food and beverage
• Dietary supplements
• Personal care
• Ecological home and office products

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Proposal for Life Style,Selling concept not
selling Product Eco, LOHAS, Healthy

• In some cases, environmental benefits have come
  to be expected, such as with energy-efficient
  electronics and appliances. Due to a variety of
  forces, such as energy blackouts, escalating fuel
  costs, and improved technology, buying
  energy-efficient appliances and electronics is
  now second nature to many consumers. These market
  forces have also been driven from decades of
  government involvement, through programs.
• Furthermore, about two-thirds of consumers
  indicate a willingness to spend more on the
  initial purchase price for products that will
  save them money on their electric or water bills
  in the future. This shows a predisposition to
  invest now for future savings.

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Life style creationLOHAS Branding for
Values-Driven Consumption

• Many environmentally-friendly products on the
  market today are attractive to consumers, even if
  the primary benefit is not solely environmental.
• Many products offer health benefits (such as
  natural/organic food and personal care). Others
  offer cost savings (as with energy efficient
  products and hybrid cars).
• Many premium brands incorporate LOHAS values.
  These brands are able to sustain brand image (and
  price) premiums, perhaps in part because they
  have developed meaningful and differentiated
  LOHAS-related platforms.

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Penetration of lifestyle concept (Medium)

• TV program
• ?program related LOHAS
• http//www.tv-tokyo.co.jp/lohas/lohas.html
• Magazine
• ? Lifestyle magazine BRIO LEON
  Croissant SOTOKOTO ELLE DECO
• ? Free magazine R25 Hot Pepper
• Events
• ? Lifestyle Forum (exhibition, music live,
  seminar type talk session)
• http//www.lifestyle-forum.org/
• ? Slow Food event at Hotel or famous popular
  restaurant
• (invite famous shef / slow food menu /
  cooking class etc)
• ? Interior Lifestyle Event
• http//www.interior-lifestyle.com/en/index
  .html
• http//lifestyle-net.com/myroom/menu/pdp/e
  xperience/report/index.html
• Internet site
• ? http//www.woman.co.jp/
• ? http//woman.excite.co.jp/life/
• WEB is only available in Japanese

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Recent Trends in Major Retail Store Categories 1/3

• Department Sore (annual sales JPY 8.43 trillion)
• Seven straight years of negative growth
• - 1. Takashimaya (Osaka) / 2. Mitsukoshi
  (Tokyo) / 3. Daimaru (Osaka)
• / 4. Isetan (Tokyo) / 5. Marui (Tokyo)
• http//www.takashimaya.co.jp/ (only
  Japanese)
• General Merchandise Stores (annual sales JPY
  8.5 trillion)
• - Separating the winners from the
  losers
• - Ito-Yokado / Aeon / Daiei
• http//www.itoyokado.co.jp/company/
  index1_e.htm
• Supermarkets (annual sales JPY15.9 trillion)
• - Intensified competition over
  Food crosses store category
• boundaries
• - Life Corporation (Osaka) /
  Maruetsu (Tokyo) / Tokyu store (Tokyo)
• http//www.lifecorp.jp/ (only
  Japanese)
• Some pictures of the each type retail store are
  available on WEB page for the reference.

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Recent Trends in Major Retail Store Categories 2/3

• Shopping Center (annual sales JPY 26.2 trillion
• - declining number of new SC opening
• - Roppingi Hills (Tokyo) / Sapporo
  Stellar Place (Hokkaido) / Aeon Ota
• shopping Center (Gunma)
• http//www.roppongihills.com/jp/inde
  x.html ( only Japanese)
• Convenience Store (annual sales JPY6.7
  trillion)
• - continued expansion through scrap
  build
• - Seven-Eleven / Lawson / Family Mart
• http//www.sej.co.jp/english/index.h
  tml
• Home Centers (annual sales JPY3.9 trillion)
• - Pace of growth decelerates
• - Cainz / Kohnan Shoji / NAFCO
• http//www.cainz.co.jp/english_Site/
  e_index.html
• Consumer Electronics Mss Merchandisers
• - Digital electronics boom leads to
  market growth
• - Yamada denki / Yodobashi Camera /
  Kojima
• http//www.yamada-denki.jp/company_e/
  index.html

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Recent Trends in Major Retail Store Categories 3/3

• Drugstores (annual sales (JPY 2.5 trillion)
• - Rapidly growing new store type
• - Matsumotokiyoshi / Cawachi /
  Hac-Kimisawa
• http//www.matsukiyo.co.jp/index2.ht
  ml (only Japanese)
• Specialty Store Retailers of Private Lavel
  Apparel
• - Fast Retailing (UNIQLO) / Shimamura
  / Five Fox (Comme ca)
• http//www.uniqlo.co.jp/english/inde
  x_f.html
• General Discount Stores
• - Limits of the low-price-only
  business model
• - Don Quixote / Mr. Max / Daiei
  (Topos, D-Mart)
• http//www.donki.com/index_en.php?la
  ngen
• Mail-Order Business (include Internet Shop)
• - Growing to a size of over 2
  trillion market
• - Rapid growth in TV shopping
  channels
• - proliferation on Internet sales

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New type Retail Store Category

• Lifestyle store
• ? Conran shop, Afternoon tea living, Franc
  Franc,
• Mono Comme-ca, Muji
• http//www.conran.ne.jp/ (only Japanese)
• http//www.afternoon-tea.net/ (only
  Japanese)
• Gourmet Supermarket
• ?Seijo-Ishi, Kinokuni-ya, The Garden, Queens
  Isetan,
• http//www.garden.co.jp/ (only Japanese)
• Basement Department Store which concentrate fixed
  food shop (Depachika)
• http//www.depachika.com/ (only Japanese)
• Business Convenience Store
• ? Kinkos http//www.english.fedexkinkos.co.j
  p/
• Flagship Store
• Destination Store
• Shoppertainment Store

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Seek for New Business Model

• Recent distribution market is moving into a
  phase of multifaceted competition between complex
  store and store types / between different
  regions, instead of older pattern of homogenous
  competition between individual stores or store
  types.
• ?A large combination shopping complex model
  Combines the extensive product line
  characteristic of general merchandise stores with
  the specialized character of specialty stores in
  convenient and pleasant shopping experience.
  Emerging as new players in this market are not
  only retailers but also general trading
  companies, developers, food service
  establishments a variety of service enterprises.
• Shopping Center ( regional model / neighborhood
  model)
• Railway station retailing (Eki-naka or
  (in-station))
• Food entertainment themepark
• Combo with convenience store
• Outlet mall
• The new business model is a place of growing
  potential for foreign retailers because of low
  cost and the size and the diversity of site
  characteristics and will have a ability to create
  flexible store combinations.

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Reference

• Census Ministry of Internal Affairs and
  Communication , Statistics Bureau
• White Paper on Welfare and Labour Ministry of
  Health, Labour and Welfare
• imidas 2006
• JETRO
• Mipro
• Survey for Japanese lifestyle and life view
  Industry Laboratory
• Survey of 10 thousands peoples daily life
  Nomura Research Institute