Japan Market Outlook & Opportunities Yuri Ann Arthur - PowerPoint PPT Presentation

Japan Market Outlook & Opportunities Yuri Ann Arthur Commercial Officer June 2016

A Profile of the 2016 Japanese Consumer

Update on the Japanese Consumer Bank of Japan Interest rate: negative Average Income: $34,000 Average Base Salary: $29, 420 with $5083 annual bonus Average New Graduate Salary in Tokyo: $17,666 Average Rent in Tokyo: $1373 to $974 Frugality is key Size of Average House: 379 square feet Average Lunch Price: $4.60 Monthly Food Expenditures per Household: $592 Monthly Allowance for Breadwinner: $314

Update on the Japanese Consumer Movie Ticket: $17 Monthly Cellphone Bill: $68 Public University Tuition: $43,113 Starbucks Coffee: Short coffee $2.64 McDonalds Value Set: Big Mac Value Set $6.32 Average Wedding: $31,481 Average Pop Star Concert Ticket: $80 *exchange rate 1$=106 yen

What is popular in Japan? 1 Hokuriku Bullet Train 2 Hibana (Akutagawa Prize winning novel written by comedian) 3 Inbound Tourism and associated spending 4 Convenience Store Donuts 5 Coconut Oil 6 Gaucho Pants 7 Choi- Nomi (similar to Happy Hour) 8 Meiji PA-3 Yogurt 9 Yogurt Flavored Water 10 Apple Watch *From Nikkei Trends 2015

The Trends

This is what is happening in Japan

Breakdown by Industry

Food Related Market

Continued Popularity Waiting for Eggs and Things…..

Market Trends • Japan is very competitive market, and buyers in the food and beverage industry are inundated with meeting requests. • Therefore, they often do not respond to “cold calls” or requests for meetings with individual companies. Instead, they prefer to find new products at large trade shows, or specially targeted trade showcases, where they can look at many products at once. • Therefore, the best way to find buyers here is to participate in one of the food related trade shows or showcases.

Shows supported by our partner ATO Supermarket tradeshow Japan 2017 http://10times.com/super-market-tradeshow Foodex Japan 2017 http://imexmanagement.com/show/204/foodex-japan-2017/ The Department of Agriculture leads in food and beverage related promotion and trade support. The Agricultural Trade Office in Japan has official programming at the two shows above but provides support to U.S. companies interested in the market. ATOOsaka@state.gov Western US Agricultural Trade Association (WUSATA) offers counseling to food and beverage companies and brings delegations to shows often defraying costs for attending. https://www.wusata.org/

Other Shows to consider International Food Ingredients and Additives Show http://www.ifiajapan.com/2016/en/in dex.html

Gift Market How much do you spend for presents? Between Friends Between Couples Rank Price Range (yen) Rank Price Range (yen) 1 3000 ～ 4000 1 3000 ～ 10000 2 2000 ～ 3000 2 5000 ～ 20000 3 500 ～ 1000 3 10000 ～ 50000 What do you purchase for presents? Friends Between Couples Customized goods • Pair accessories Beauty goods • Brand bags Aroma goods • Brand wallets

Japanese Weddings

Japanese Funerals

Oseibo and Ochugen

Valentine’s Day and White Day

Halloween

Tokyo International Gift Show Held: Twice a year (Spring, Autumn) Exhibitors: 2,500 Visitors: 200,000 States that have held Pavilions: Hawaii, Oregon Types of products handled: personal gifts and lifestyle sundries Types of visitors/buyers that attend: Major department stores, volume retailers, mail order houses, specialty shops, Hotels, construction, interior designers CS Presence: CS information booth Other Information: -The 82 nd Tokyo International Gift Show Autumn 2016 will be September 7-9, 2016 - Business Matching Program

Japan Outbound Tourism 0.8

Potential Segments and Opportunity • Senior Travel – Baby Boomers Special Interest Tours (SITs) • Educational Travel •  Conclusion of the Open Sky agreement  Elimination of fuel surcharge  Release of Brand USA’s National Parks Adventure IMAX Film

JATA Tourism Expo Japan 2016 Held: September 22-25, 2016 Exhibitors: DMOs and Tourism Suppliers (Hotels, Airlines, Rent-A-Cars, theme parks, etc.) Visitors: More than 173,000 travel trade and consumers CS Presence: Brand USA Pavilion with more than 70 booths (DOC’s Certified Trade Fair)

Hawaii Expo at Shibuya Hikarie Held: 2015 and 2016 Organizer: Hawaii Tourism Authority Visitors: 13,000 Types of products handled: tourism promotion, Made in Hawaii goods Types of visitors/buyers that attend: General Public CS Presence: no Other Information: http://www.hawaiiexpo.jp/

Outdoor Sports Industry • Hiking has become popular in recent years even among younger females. Such females are often called “Mountain Girls” and associated fashion styles have emerged. • Bouldering is also becoming more popular. • Jogging and Running is on the rise as well. • Sports in contention for the 2020 Olympics offer promise for increased attention and popularity including: Baseball/softball. Karate, sports climbing, skateboarding, and surfing.

Sports Influenced Fashion- Mountain Girls

Sports Influenced Fashion- Running

Outdoor Retailer Summer Market Held: Annually in the summer Winter Market for winter sports held annually in the winter Location: United States Types of visitors/buyers that attend: Designers, Retail Buyers, International Delegates CS Presence: Yes. IBP Show. Other Information: A sizeable Japanese delegation visits these shows. Also a great way to connect with international buyers from other countries

Interstyle Held: Usually once or twice a year Location: Yokohama Types of goods covered: outdoor sports with a focus on board sports. Types of visitors/buyers that attend: 283 companies representing 824 brands Attendees: 18, 928 International Visitors: 232

Cosmetics Industry • One of the world’s largest markets for cosmetics. • Accounts for 30% of aggregate Asian market, which is one third the global market. • The Japanese cosmetic market in 2014 grew 2.9% from the year earlier in all fronts, domestic shipment, import and export. • Cosmetics imports to Japan in 2014 grew despite sharp depreciation of the Japanese yen against U.S. dollars. • The U.S. is the second largest cosmetics exporters to Japan after France. China remained third.

Cosmetic Products

Cosmetic Products

Cosmetic Products

The Landscape • Estimates say that there are about 4000 companies with 130,000 items being distributed in Japan. • Japan’s Big Three companies are Kanebo, Shiseido, and Kose. • There are newcomers including FujiFilm and Senshukai. • 4 channels for prospective buyers: Chain Store system, general distributorship, direct marketing, Others.

Best Prospects • Skincare products that fall under anti-aging, lightening, moisturizing, and color sport correcting areas. • Natural/organic products. • Men’s skincare and personal care products. • Fragrances with lighter scents.

Points to consider for Market Entry • Numerical claims and efficacy claims in general are very restricted. • Product image plays a huge part in product success. Marketing to appeal to a Japanese audience becomes key. • Pharmaceutical and Medical Device Law requires one to have a license to import to Japan and to follow Japan mandated quality and safety standards. • Currently, one needs to have a Japanese partner secure these licenses. • Labeling and packaging requirements must be followed.

Examples • Applicant companies for licenses must have a product quality manager, a Safety Control Manager, and a General Marketing Business Controller. • The Controller needs to be a licensed pharmacist or specialist. • There also needs to be an Engineering Manager. • Cosmetic products need to be wrapped in a manner that shows the name and address of marketer, product name, production code, cosmetic ingredients, and shelf life.

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Shows to Consider COSME TOKYO 2016 & COSME TECH 2016 Date: January 20-22, 2016 Venue: Tokyo Big Sight, Tokyo Organizer: Reed Exhibitions Japan Ltd. URL: http://www.cosmetokyo.jp/en/, http://www.cosme-i.jp/en/ Organic EXPO 2016 Date: February 10-12, 2016 Venue: Tokyo Big Sight, Tokyo Organizer: NürnbergMesse GmbH URL: http://organic-expo.jp/en/

Shows to Consider Beautyworld Japan 2016 Date: May 16-18, 2016 Venue: Tokyo Big Sight, Tokyo Organizer: MESAGO Messe Frankfurt Corporation URL: http://www.beautyworldjapan.com/tokyo/e/ DIET & BEAUTY FAIR ASIA 2016 & SPA & WELLNESS JAPAN 2016 Date: September 12- 14, 2016 Venue: Tokyo Big Sight, Tokyo Organizer: UBM Japan Co., Ltd. URL: http://www.dietandbeauty.jp/en/, http://www.spaandwellness.jp/en/

Biotechnology Industry - Strategic area for Japan’s growth, Opportunities for U.S. businesses - Remarkable growth: $25.6 billion in 2015 • cf. $205 million in 1986 • Growth driver: Healthcare/medical sector Other sectors: Biofuel & Biorefinery; • Food/functional foods Japan open to innovation • and seeking global collaboration Source: Nikkei Biotechnology & Business and Japan Biotechnology Association Note: Exchange rate used: JPY121.05/dollar