Japan Large Appliances Market Report – 2020 : Ken Research

• How Japan Large Appliances Market Is Positioned? Japan is among the most developed nations in world with GNI per capita of USD

36,680 in 2015. It has very high per capita income, and people in Japan have very high standards of living. Consumer experience is the very important factor while developing the product for Japanese large appliances market. Total demand for large appliances has declined from ~ million in 2012 to ~ million 2015. Market for large appliances in Japan was estimated at USD ~ billion in 2015. Percentage decline in terms of revenue was less compared to percentage decline in terms of number of appliances sold as demand for high end products has increased. Increased concern for environment and value added features with smart technologies has promoted the sales of appliances with high price tag.

Japan is home to some of the prominent large appliances brand in the world which includes Panasonic, Hitachi, Daikin, Sharp, and others. Demand for high end technology products, loyalty to domestic brand, better after sale service and replacement of old product with latest and upgraded appliances were key growth drivers creating demand for large appliances in Japan. Exports over the period have declined owing to closure of manufacturing bases of large appliances in Japan. Total exports for 2015 were reported at USD ~ billion. Though the large appliances market is dominated by domestic companies many products were imported from manufacturing bases outside Japan due to unavailability of raw material and intermediary product in Japan. Import value is much higher than exports.

• What have been the Major Segments that has Driven Change Market for large appliances is dominated by demand for air conditioners in

Japanese large appliances market. In 2015, ~ million units of air conditioners were sold in Japan large appliances market. This was ~% of total number of large appliances sold in Japan Market. Television sales with market share of ~% has was second most sold large appliance totaling ~ million units. Washing machine and refrigerator were sold in nearly equal numbers, with each selling ~ million units in 2015 accounting for ~% market share each.

• Air Conditioner: Air conditioner sales have dominated the large appliances market in terms of revenue with a market share of ~% in 2015. Sale of air conditioner generated revenue worth USD ~ million in 2015. Demand for air conditioner in Japan was mainly driven by a necessity to have clean air with ambient temperature and humidity condition. It has been witnessed that more than ~% sales for air conditioners in Japan pertains to split A/C.

Shift in consumer preference for HDTV and smart TV has led to replacement of old television sets in Japan which is the major growth driver. The market is largely dominated by domestic brands such as Sharp, Toshiba, Panasonic and others which have together accounted for more than ~% of television sales in Japan. Large screen television sets are gaining market share in Japan with advent of better picture quality and added features. In 2015, ~ million refrigerators were sold in Japan and have generated revenues worth USD ~ million. Replacement demand has been the key market driver for demand of refrigerator especially with machines which are embedded with smart and sensitive device technology.

Life expectancy at birth is among the highest (83.1) in Japan and is mainly attributed to their healthy eating habits and hygienic environment conditions. Due to lack of space to dry clothes naturally, washing machines with drier have gained much importance. Majority of sales for washing machines was driven by demand for replacement of existing old washing machine with better technology and energy efficiency. In 2015, ~ million washing machines were sold in Japan which has garnered revenues worth USD ~ million. Demand for automatic type front loading washing machine was reported to be highest in Japan.

• MAJOR DISTRIBUTION CHANNEL Distribution network of large appliances in Japan was majorly dominated by brick

and mortar stores across Japan with sales largely dominated by large retail chains such as Yamada Denki, Bic Camera and others. Online shopping in Japan is dominated by market place like Rakuten or by mall sites. Several large retailers such as Yamada Denki and Bic Camera have their own online platform. Product delivery is the major determining factor for choosing the medium of sales. Logistics handling of large appliances in Japan is very fast, most appliances are expected to be delivered by next day. Delay in excess of 2 days is not accepted. For a small country like Japan such expectation are practical and is met by most retailers in both online and offline mode.

• RECYCLING IN JAPAN The consumers must return the large appliances to retailers and pay for the cost of

transport and recycling as announced every year. The retailer in turn has to take back the appliances they have sold. The government has also appointed designated bodies to collect the old appliance. Cost of returning the large appliances is variable and is dependent on company as well as the appliance returned. In 2015, ~ units of old large appliances were returned as per data released by Ministry of Economy Trade and Industry

• Export and Import Market in Japan With declining market in Japan for large appliances, most of the Japanese

companies are focusing on producing in other emerging economies especially China to cut down the production costs. Almost all major Japanese brands have strong presence in global market with majority of their sale coming from Europe and the US market.

Many companies have sold their large appliances business in recent times or are in talks to exit their large appliances business directly or indirectly. Most of these large appliances companies have setup their manufacturing bases outside Japan to save on cost and become more cost competitive. Exports over the period have declined owing to closure of manufacturing bases of large appliances in Japan. Total exports for 2015 were reported at USD ~ million. Import of large appliances in Japan has also declined with shrinking Japanese market for large appliances. Though the large appliances market is dominated by domestic companies, many products were imported from manufacturing bases outside Japan due to unavailability of raw material and intermediary product in Japan. Import of large appliances in Japan was free, but every good manufactured or imported in Japan was subjected to consumption tax of ~% irrespective of the country of origin.

• Market Share Of Major Players in JApan Large Appliances Market• Large appliances market in Japan was largely dominated by domestic brands.

Panasonic, Hitachi, Sharp, Sony, Toshiba, Mitsubishi are some of the leading brands which are operating in Japan large appliances market. These companies together constitute more than 90.0% of total revenue in Japan large appliances market. International companies such as LG, Electrolux, Haier have limited share with majority of the demand for their products coming for some specialized product. LG which is among global top 3 large appliances market has less than ~% market share in Japan. Panasonic leads the market for air conditioner in Japan. Panasonic is also one of the prominent players in washing machine segment. Sharp leads the market for television in Japan and is also popular in refrigerator market lagging the market leader by small percentage. Hitachi is one of the biggest conglomerates in Japan and was the market leader in washing machine segment with ~% share in washing machine segment of Japan. Daikin is the second largest player in the air conditioner market. Toshiba which has sold its large appliances business to China based Midea group was the ~ largest player in television and washing machine segment and~ largest player in refrigerator segment.

• How The Future for Large Appliances Market is Anticipated Large Appliances market in Japan is shrinking and is expected to continue to shrink.

High rate of product innovation, growing demand for innovated & high technology bounded products and consumer’s willingness to pay a premium will drive the large appliances market in Japan in terms of value. Tokyo Olympics which is scheduled to be held in 2020 is expected to boost sales of large appliances especially in hotels and restaurants specifically. Japanese consumers are very loyal to their domestic brands however consumer preferences are changing. Japanese people have started accepting foreign brands as they manage to establish their name and high product quality. As the product life cycle of large appliances is reducing opportunities will be created for new market entrants to capture the replacement market for large appliances.

• Source: https://www.kenresearch.com/consumer-products-and-retail/consumer-electronics/japan-large-appliances-market/65830-95.html

• Contact: Ken ResearchAnkur Gupta, Head Marketing & CommunicationsAnkur@kenresearch.com+91-9015378249

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