Retail landscapeEven though the number of retail stores has been on a steady decline in recent decades, brick-and-mortar stores remain the main points of sale for daily goods and foodstuffs in Japan. At the center of the retail market are convenience stores, commonly referred to as konbini. While the small corner shops are limited in their range of products, the dense store network caters to the busy lifestyle in the country, allowing for spontaneous and fast shopping trips on the way.
On the other side of the spectrum are large retail establishments such as shopping malls, department stores, and large specialty retailers, which predominantly specialize in the distribution of non-food products. However, with large e-commerce enterprises such as Rakuten and Yahoo broadening the product and service availability in their respective marketplaces, traditional retailers are struggling to defend their market share against the convenience of shopping around the clock.
International competitionWhile the high disposable income of consumers offers an attractive market with high potential, foreign retailers are struggling to enter the Japanese retail market. As successful domestic brands are enjoying the trust of consumers and the efficiency of tightly woven supplier networks, large foreign entrants such as Walmart or Tesco have reported their failed attempts to penetrate the rigid retail structure.
Among businesses successful in garnering consumers’ attention, online platforms are gaining traction. The online marketplace Amazon has successfully expanded to the Japanese market, competing against domestic enterprises for the position as the leading e-commerce site in Japan.