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Retailing in China and Japan

Retailing in China and Japan. Aleece Kopczenski Leilei Zhang. Retailing in China. China’s Retail Industry Overview one of the most lucrative and rapidly growing retail market in the world. Despite economic downturn, China’s retails sales hit $1.8 trillion in 2009.

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Retailing in China and Japan

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  1. Retailing in China and Japan Aleece Kopczenski Leilei Zhang

  2. Retailing in China China’s Retail Industry Overview • one of the most lucrative and rapidly growing retail market in the world. • Despite economic downturn, China’s retails sales hit $1.8 trillion in 2009. • The average per capita disposable income reached $2,515 in urban areas and $3,810 in economically advanced cities. • Changes in household spending: from basic needs to pursing a higher quality of life.

  3. China’s Retail Market Structure

  4. China’s Retailing Ownership

  5. Restrictions for Foreign Investors • Under WTO accession agreement, China committed to gradually eliminate market access barriers for foreign enterprises. • Restricted products • Complicated licensing process

  6. Retail Sector Opportunities for Foreign Companies • E-commerce • Online-only retailers • Multi-Chanel retailers • Third-party E-commerce platforms • Non-fuel service at fuel station: value-added service such as shopping, food, and auto maintenance • Drug retailing: strengthened administration and other released documents encourage foreign investments.

  7. Best Practices to Succeed • Understanding relevant PRC regulations and policies: licensing process and market access limitations. • Work with local business partners: valuable resources such as business networks, government relations, and knowledge of local market conditions • Offer third-party services: third-party logistics, distribution, wholesale services, and supply chain management solutions.

  8. Summary • China’s retail market is rapidly developing but highly fragmented. • PRC government regulations restrict foreign investment in certain sectors but offer opportunities in others such as E-commerce, fuel stations, and drug retailing. • To succeed in China’s retail market, foreign investors should familiarize themselves with government policies and consider working with local business partners.

  9. Retailing in Japan • Japan’s economy valued at about $1.28 trillion (Barboza, 2010) • Japan just passed by China to become the world’s second-2010largest economy (Fackler & Tabuchi,2010) • According to the World Bank, Japan has held that spot for most of the last 40 years

  10. History • After WWII Japan’s economy grew due to close alignment with government and large manufacturers(Fackler & Tabuchi,2010) • In the 1980’s there was discussion that Japan’s economy might some day take over the United States economy • In the 1980’s Americans pushed up the price of the yen (Leonhardt, 2010) • Trade deficit with Japan went to $108 billion in 1987, from $94 billion in 1985

  11. Future Plans • After WWII Japan’s economy grew due to close alignment with government and large manufacturers(Fackler & Tabuchi,2010) • Free trade zone in Asia by 2020 (Tabuchi, 2009) • Haneda Airport in Tokyo a 24-hour hub for international flights(Tabuchi, 2009) • Less reliant on the United States • Bolster economic ties in Asia

  12. Future Plans cont… • $540 billion market for environmentally friendly technology and renewable energy(Tabuchi, 2009) • Employ 1.4 million people • Create 2.8 million jobs in the health and care-giving sectors. • Triple the number of foreign visitors to Japan, to 25 million by 2020 • Create new jobs in a bid to support the country’s ailing tourism industry

  13. Future Plans cont… • Expand Japan’s economy at an average rate of 2% over the next 10 years(Tabuchi, 2009) • Increasing gross domestic product to 650 trillion yen, or $7 trillion • Bring unemployment rate to 3 percent • Analysts say those goals are unrealistic • In the 1980’s there was discussion that Japan’s economy might some day take over the United States economy (Fackler & Tabuchi,2010)

  14. Current Retailing • Origin of many Asian trends (JEFRO, 2009) • Many opportunities for retailers • Strong revenue for high-end retailers • Premium international brands • Consumers very interested in fashion styles and trends

  15. Current Retailing • Outside country retailers bring in own style • Non-store retail market expanding quickly • Non-store opportunities for foreign companies • Range of opportunities for entries to the market

  16. Current Retailing • High importance on quality • Success in Japan means success elsewhere • Japanese consumer feedback highly valued • 35% of tourists come to shop

  17. Current Retailing • Fashion magazines from Japan very popular in Asian countries • Top market for luxury goods • Sales from foreign companies comparable to home country sales

  18. Current Retailing • Many high-end brands in one shopping location • Apparel specialty stores are prospering • Single company with different brands • Apprx. 2,800 shopping centers • Near mass transit stations

  19. Current Retailing • Tokyo’s Ginza • Famous shopping center (japan-guide.com) • Department stores, boutiques, art galleries, restaurants, night clubs and cafes • 1 sq. meter of land = $100,000 • $10 cups of coffee

  20. Summary • Increase China’s currency • Continue to attract high fashion as well as diversification • Continue to build up fashion centers

  21. References Sheng Lu.Understanding China’s Retail Market. China Business Review from http://www.chinabusinessreview.com/public/1005/lu.html Barboza, D. (2010, August 15). China passes japan as second-largest economy. The New York Times, Retrieved from http://www.nytimes.com/2010/08/16/business/global/16yuan.html?pagewanted=1&_r=1&sq=japan&st=Search&scp=32 Fackler, M., & Tabuchi, H. (2010, August 31). Japan. The New York Times, Retrieved from http://www.nytimes.com/info/japan/?scp=14&sq=japan&st=Search Japan-guide.com, Initials. (n.d.). http://www.japan-guide.com/e/e3005.html. JETRO, Initials. (2009). Investing in japan - attractive sectors. Japan External Trade Organization, Retrieved from http://www.jetro.go.jp/en/invest/attract/retail/ Leonhardt, D. (2010, September 21). The long view of china’s currency. The New York Times, Retrieved from http://www.nytimes.com/2010/09/22/business/global/22leonhardt.html?_r=1&scp=21&sq=japan%20trade&st=cse Tabuchi, H. (2009, December 30). Japan unveils plan for growth, emphasizing free trade in asia. The New York Times, Retrieved from http://www.nytimes.com/2009/12/31/business/global/31yen.html?_r=1&scp=124&sq=japan&st=Search

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