Japan: The Niche Fashion Market Ready For Lift Off

Brands and retailers are racing to understand China – you can’t attend a conference or hear a pitch without mention of the Chinese market. But while a lot of the ecommerce energy and hype have focused on the Chinese shopper, there is a huge market opportunity further east.

Japan, a key ecommerce market, is often ignored, much to the detriment of the brands and retailers who are looking for opportunities around the globe.

It’s no secret that Japan is third in the world when it comes to online retail sales (1) with a projected consumer spend of $93 billion by 2018. But with all the online chatter about Rakuten and Amazon’s domination, there are a many examples of hip, cross-border plays that are dominating the next generation of Japanese retail.

Japanese consumers revel in quality, connection, and story. Pure-play fashion brands like YeezySupply.com, Icosaeofficial.com and Vetements.com bring the perfect amount of style while providing quality customer care and relevant delivery to the Japanese market. These players are helping to drive the flurry of global shopping by stylish urban Japanese consumers.

“Japan is popping right now,” says Brandon Hill, the CEO of btrax, a company that specializes in helping US players understand the local context of Japanese consumers. “The Japanese shopper is looking for something new, and now with direct fashion brands providing an easy way to pay for and receive products, there is a new market evolving for social consumers who pride themselves in sharing experiences with novel global brands.”

Similar to other emerging niche markets, awareness is being driven by celebrity social influencers who take a liking to a product and help develop the story for their following. While some of this is organically developed, many brands are flocking to find influencers who have a devout following but might not be generally well known, especially outside Japan.

Japan is a great play for emerging brands, but they’re not the only ones who can get in on the incredible opportunity here. Those retailers that are willing to reinvent their value proposition will also fare well. One example of this kind of reinvention is Red Wing Shoes, a company known in the US for workplace safety shoes, but reinvented in Japan as an urban fashion line.

Image above: Red Wing Shoes’ Japan website features only their urban shoe collections with no mention of workplace safety shoes. 

At a recent GRIN Leadership Lab, Kai Li, the VP of International from Revolve Clothing, made that exact point. “The value proposition that works for your existing domestic business is most likely different than that of other countries. I sit down with consumers in each country I am doing business and ask them two questions: 1) Why did you buy from me, and 2) How did you find me? The answers to those two questions will tell you a lot about your customer.”

“Testing the Japanese market is much more straightforward than it has been in the past,” says Brandon Hill, who has worked with brands such as Toys R Us, Expedia, Bonobos, and Blue Nile. “With the help of local influencers and the right local ecommerce know-how, a brand can test a few assumptions around their brand story and how well it resonates without making a long-term investment.”

About btrax

btrax (btrax.com) is a consulting, localization and marketing agency focused on brands entering Asian markets. Their clients range from mature startups to Fortune 100 companies. To learn more, follow us on Twitter (twitter.com/btrax) or Facebook (facebook.com/btrax), and learn more about Asian market trends and tips on btrax’s freshtrax blog, read by over 380,000 professionals each month.

About the GRIN

The GRIN is a 501(c)(6) nonprofit membership organization. The GRIN is driven by one goal: to help global retailers and brands become leaders through collaboration and knowledge. Our member-based organization provides the data and insight needed to help brands benchmark their global performance, and take actionable steps to becoming a leading global player.

Carl Miller – Guest Contributor Carl Miller is the Founder and Managing Director of the Global Retail Insights Network (GRIN), the principal not-for-profit global community for e-commerce professionals. He previously led the retail practice at GlobalCollect (an Ingenico company), where he worked with top retailers, helping them develop global commerce strategies. Carl has been designated as a ‘Top of the List E-Commerce Professional’ by the San Francisco Business Times for his innovation around B2C services.

(1) “Forrester Research Online Retail Forecast, 2013 To 2018 (US).” Forrester.com

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