Japanese Department Store : A Failure in Globalisation Rika Fujioka fujioka@osaka-ue.ac.jp 1 Globalisation of Retailing A few successful retailers in globalisation Sales rank Ratio of overseas store Ratio of overseas sales Countries of operation Mitsukoshi(Japan) 63 35.7% 1.4% 7 Eaon (Japan) 17 1.1% 11.2% 4 Muji (Japan) - 29.6% 11.9% 15 Wal-mart(US) 1 43.0% 24.2% 13 Carrefour(France) 2 78.5% 54.2% 26 Tesco (UK) 4 43.6% 24.0% 13 2 The Early Development Late 19th Century Vanguard of Foreign Trade in Japan Import Western Products Trade Textile Products Early 20th Century Transform them into Department Stores Catch Up with European Stores 3 Declining Sales during WWⅡ Table 1: Total sales of All department Stores (thousands of Yen) 1,000,000 Consumer demand Little merchandise Clerks been inducted Limited sales area 800,000 600,000 400,000 200,000 0 1938 1939 1940 1941 1942 1943 1944 1945 4 Activities in Manchuria Tap New Growing Market ‘Gaisho’ Department and Trading Department Meet the Demands of Japanese Army and Concern in Manchuria. Total Imports Imports from Japan 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 1922 1923 1924 1925 1926 1927 1928 1929 5 Mitsukoshi’s Development Open a Branch In Seoul in 1906 In Dalian in 1928 Store (7500 ㎡) Rely on Sales in Overseas Branches Sapporo(Japan) Dalian (China) 2.9 million Yen 6.8 million Yen Seoul (Korea) 11 million Yen 6 In the Era of High Economic Growth All Retail Stores (left-hand scale) Department Stores (right-hand scale) 160,000,000 16,000,000 140,000,000 14,000,000 120,000,000 12,000,000 100,000,000 10,000,000 80,000,000 8,000,000 60,000,000 6,000,000 40,000,000 4,000,000 20,000,000 2,000,000 0 0 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1979 1982 1985 1988 1991 7 New Forays into Europe and US For Domestic Store’s Merchandise Understand Fashion Trend Find New Fashion Brands For Gaisho Customers Loyal Customers →Ethnic Enclave Market 8 Ethnic Enclave Market London Mitsukoshi Opened in 1979 Target: Gaisho customers Japanese Tourists Japanese Residents In transition After the 9/11 terrorist attacks in 2001 Tourist Decreased in Number Japanese Economic Depression Expatriate Employee were Younger and Fewer. 9 For the department stores’ development Either Close or Change the Strategy Frankfurt and Munich closed in 2008 London expanded customers to include Asian customers. Role of Overseas Branches Domestic Strategy For Loyal Customer For Upmarket Merchandise 10 Development in Asian Countries Cater for Japanese Tourists and Residents Hong Kong Adaptation into the Local market Isetan’s Hybrid store in Singapore Mitsukoshi in Taiwan 11 For Further Development Did Complementary Strategy for Domestic Market Need Full-scale Global Strategy Asian Developing Countries Decline Population in Japan Yet to Work Out a New Strategy 12 Conclusion What Did Globalisation Mean to Japanese Department Stores? Focus on Growing Market and Sales Sufficient Domestic Market Lack of Standardisation Contribute to Heighten the High End Store 13