Japanese Department Store : A Failure in Globalisation Rika Fujioka fujioka@osaka-ue.ac.jp 1

Japanese Department Store: A Failure in Globalisation

Rika Fujiokafujioka@osaka-ue.ac.jp

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Globalisation of RetailingA few successful retailers in

globalisation

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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

The Early DevelopmentLate 19th Century

Vanguard of Foreign Trade in Japan

Import Western Products Trade Textile Products

Early 20th CenturyTransform them into Department

StoresCatch Up with European Stores

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Declining Sales during WWⅡ

1938 1939 1940 1941 1942 1943 1944 19450

200,000

400,000

600,000

800,000

1,000,000

Consumer demand Little merchandise Clerks been

inducted Limited sales area

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Table 1: Total sales of All department Stores (thousands of Yen)

Activities in Manchuria

Tap New Growing Market

‘Gaisho’ Department and Trading Department Meet the Demands of Japanese Army and Concern in Manchuria.

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1922 1923 1924 1925 1926 1927 1928 19290

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Total Imports Imports from Japan

Mitsukoshi’s Development

Open a Branch In Seoul in 1906 In Dalian in 1928

Rely on Sales in Overseas Branches

Store (7500 ㎡ )Sapporo(Japan)

2.9 million YenDalian (China)

6.8 million YenSeoul (Korea)

11 million Yen

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In the Era of High Economic Growth

1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1979 1982 1985 1988 19910

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

All Retail Stores (left-hand scale)Department Stores (right-hand scale)

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New Forays into Europe and US

For Domestic Store’s MerchandiseUnderstand Fashion TrendFind New Fashion Brands

For Gaisho CustomersLoyal Customers→Ethnic Enclave Market

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Ethnic Enclave MarketLondon Mitsukoshi Opened in 1979

Target: Gaisho customersJapanese TouristsJapanese Residents

In transitionAfter the 9/11 terrorist attacks in 2001

Tourist Decreased in NumberJapanese Economic Depression

Expatriate Employee were Younger and Fewer.

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For the department stores’ development

Either Close or Change the StrategyFrankfurt and Munich closed in

2008London expanded customers to

include Asian customers.Role of Overseas Branches

Domestic StrategyFor Loyal CustomerFor Upmarket Merchandise

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Development in Asian Countries

Cater for Japanese Tourists and ResidentsHong Kong

Adaptation into the Local marketIsetan’s Hybrid store in SingaporeMitsukoshi in Taiwan

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For Further DevelopmentDid Complementary Strategy for

Domestic MarketNeed Full-scale Global Strategy

Asian Developing CountriesDecline Population in JapanYet to Work Out a New Strategy

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ConclusionWhat Did Globalisation Mean to

Japanese Department Stores?

Focus on Growing Market and SalesSufficient Domestic MarketLack of Standardisation Contribute to Heighten the High End

Store

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