EXPLORE HOME FURNISHING & INTERIOR DESIGN IN JAPAN
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1 EXPLORE HOME FURNISHING & INTERIOR DESIGN IN JAPAN INSIGHTS FROM JAPAN S INTERIOR DESIGN MARKET BUSINESS SWEDEN, JANUARY 2018 INSIGHTS FROM JAPAN S INTERIOR DESIGN MARKET BUSINESS SWEDEN 1
2 EXPLORE HOME FURNISHING & INTERIOR DESIGN IN JAPAN Japan is the world s third largest retail market and has large demand for new Swedish home furnishing and interior design products. With highly enthusiastic and sophisticated consumers, Tokyo is a key trendsetter and an excellent test market for further expansion in Asia. JAPAN HAS A LARGE, SOPHISTICATED HOME FURNISHING & INTERIOR DESIGN MARKET Newcomers to Japan might imagine the country as a mysterious country in the Far East with traditional Japanese homes. The reality is that Japanese lifestyles have been significantly westernized in the past 20 years. Japanese consumer preferences today does not drastically differ from preferences in Stockholm, Sweden, and it is not at all uncommon with households only with IKEA furniture, Tempur pillows and Scandinavian textiles such as Klippan blankets. Japanese people love simple, modern design and respect mimimalistic expression. There is typically a good fit between Japanese and Scandinavian preferences. Some differences to bear in mind are potential size adjustment as househoulds generally are more compact and people are smaller than Swedes. IKEA re-entered the Japanese market in 2006 after an unsuccessful launch in the 1980s. The company opened a first store in 2006 and has since shown steady market growth. Company ambitions are to have 20 stores with a turnover of 150 billion JPY 1 in IKEA s success indicates the market potential for Swedish home furnishing and interior design in Japan. For many smaller Swedish design companies, Japan is their largest market outside of Sweden and somewhat of a second home-market. But it can also be a very difficult and demanding market. Key take-away: Japan is an attractive market for Swedish home furnishing and interior design companies as there is high interest and demand for Scandinavian and Swedish design. THE HOME FURNISHING MARKET SHOWS CONTINUOUS, RE-ACTIVATED, GROWTH The Japanese home furnishing market had a downward trend for a long time due to stagnant economic growth but has shown 6 years of JPY 7,98 SEK as of May BUSINESS SWEDEN INSIGHTS FROM JAPAN S INTERIOR DESIGN MARKET
3 Billion JPY continuous growth due to an upward trend in housing investments. The market was estimated at billion JPY in 2016 and is expected continued growth over the coming years. Figure 1 Home furnishing market trend in Japan Sales of furniture keeps growing at lifestyletheme stores rather than in standard furniture shops (3.9% overall growth in 2016). Multifunction dining tables used for family gatherings is one example of a hot selling item. Size is, in general for all furniture, something that might have to be customized for the Japanese market. Bed linen sales increased by 7% in Highfunctional, washable down-quilts became a smash hit due to its ease of maintenance. Energy saving functions as well as dust-free items was main interior fabric trends. Licensed pattern products are often available in Japan. Source: Yano Data Bank, Home Fashion Brand 2016 According to a survey by the Ministry of Land, Infrastructure and Transport and Tourism (MLIT), housing construction in Japan showed double digit growth in 2013 and consecutive growth for 4 years. A total of 909,299 housing units were built in 2014, and similar growth is expected in New housing makes up only for part of the home furnishing market, but the underlying housing trend indicates the overall market trend. This trend is further indicated by launches of home furnishing lines by international luxury companies such as Giorgio Armani, Hermes, and affordable chains such as Zara Home, Flying Tiger etc. Key take-away: The home furnishing market in Japan shows continuous growth and increased presence by foreign home furnishing players. SOME SUB-SEGMENTS INDICATE STRONG GROWTH & SPECIFIC CHARACTERISTICS The home furnishing market can be categorized in 7 sub-segments. Home furniture is the biggest segment and accounts for 30% of the market, followed by bed linens, interior fabrics and kitchen/tableware. Figure 2 Breakdown of the home furnishing market Towel 4% Lighting 13% Kitchen & tableware 13% Interior fabrics 16% Homeware 5% Home Furniture 30% Bed linens 19% Source: Yano Data Bank, Home Fashion Brand 2016 Due to growing attention on food experiences, consumers also focus on food-related products such and kitchen & tableware. The market grew by 3.9% and more import items appeared. New housing demand is the main market for lighting. Coordinated lighting consulting services is generally available for new houses. There is increased focus on indirect lighting design. The market for towels is growing, especially for organic cotton, but is also highly competitive. There is a growing demand for stylish and cozy homeware. The market is driven by people in their 20s and active consumers in their 50s. SCANDINAVIAN DESIGN HAS ITS OWN ESTABLISHED NICHE IN THE MARKET Japan has a high interest in Swedish and Hokuou (Scandinavian & Nothern European) design. This trend boomed in the early 2000s. Scandinavian design have since received a lot of attention from design enthusiasts but it is still a niche market. Some Nordic brands have been successful in reaching the mainstream market, especially Marimekko, Ittala and IKEA. This have increased the overall interest in Scandinavian design regarding everything from fashion to home furnishing. Today there is a solid customer base who are fond of Scandinavian design and enjoy to purchase original imported items and licensed pattern items produced by local players. CUSTOMER BEHAVIOUR IS SHIFTING TOWARDS INTANGIBLE QUALITIES Even though the Japanese home furnishing market is expected continuous growth, it is no longer possible to sell products just because of a famous Scandinavian design. Japan has high INSIGHTS FROM JAPAN S INTERIOR DESIGN MARKET BUSINESS SWEDEN 3
4 % of time at home purchasing power and is a trendsetter for Asia, but long economic recessions have made consumers more cost sensitive in their spending behaviour. Japanese consumers do not necessarily seek possessing many items but rather spend some extra effort and money to select items that reflects the owner s personality, an item to treasure for a long time. Typical Japanese consumer purchasing behaviour over time is summarized in the table below. It is highly recommended for Swedish home furnishing companies to elaborate on a strong brand story. Consumers are willing to pay a premium for carefully explained intangible qualities. Figure 3 Summary of consumer behaviour shifts 80s 90s 00s Today Key purchasing factor - Limited interest in home furnishing - Enjoy to possess trendy items - Still pre-boom for home furnishing - Screen and select good quality items - Scandinavian home furnishing boom - Pay for well-known designer / brand - Evaluation based on key influencers - Re-activated home furnishing market - Standard items (one time use) to stock - Willingness to pay for intangible value - Evaluation based on own taste Source: Business Sweden market observations Key take-away: There has been drastic changes in customer behavior over the last decades. More attention to cost and intangible qualities, but consumers are ready to pay for quality. TIME SPENT WITH FAMILY, FRIENDS & HOME ITSELF BECOMES MORE IMPORTANT Japan is eagerly embracing a westernized lifestyle. This is not limited to food and housing, but also how to spend weekends and holidays. Japanese people commonly only used to invite relatives or close friends to their home as the home is a private almost sacred area. Today, younger gerenerations spend more time with family and friends at home and the border between private and public has become vague. This trend became even more noticeable after the triple disaster in 2011 when people reevaluated that family and friends are the most valuable things in your life. In a 2012 survey conducted among teens (10-14 year old), 76% of respondent said that they spend most of their time home in the living room, rather than their 4 BUSINESS SWEDEN INSIGHTS FROM JAPAN S INTERIOR DESIGN MARKET own room, which is a 20% increase from when the survey was last conducted in Figure 4 Where do you spend most of your time? , ,3 29,1 76,2 17, Living room Source: Business Hakuhodo Institute of Life and Living 2012 My room Another interesting lifestyle change that relates to the home furnishing market is that people have started not to only enjoy traditional Japanese holidays and anniversaries, such as New Year s Days and Golden Week, but also newly created anniversaries. For example, the halloween-related market is growing rapidly, doubling from 56 billion to 122 billion JPY Christmas and Valentine s day used to be the only western holidays celebrated in Japan but Halloween is expected to surpass Valentine s day as all ages can enjoy Halloween while Valentine s day is more for couples. Key take-away: Time spent with family and friends as well as the home itself is becoming more important in Japan. Products that reflect a unique Swedish lifestyle has potential in Japan. A GROWING E-COMMERCE MARKET OFFER OPPORTUNITIES FOR SME COMPANIES The most common distribution channel for Swedish small and medium-sized companies in the Japanese market is to find an importer that can sell the company s products at Japanese lifestyle stores via distributors. Several layers might be necessary to reach end-customers. But the Japanese E-commerce market is also growing rapidly and interior design is one of the main segments. MUJI, one of the most wellknown Japanese home furnishing retail chains, generate about 6-8% of sales through its E- commerce site. IKEA launched their online store for the Japanese market in If you are interested in more information about E-commerce in Japan, please refer to Business Sweden s E-commerce guide.
5 PERCEPTION OF SWEDISH HOME FURNISHING BRANDS IN JAPAN It is important for new market entrants to understand the established perception of Swedish home furnishing in Japan and what adaptations are needed to succed in the market. Figure 5 Perception of Swedish home furnishing Keyword Design Quality Cozy Kawaii (Cute) Classic Nice to have Current position in market Swedish design is well-received, has good reputation and also matches Japanese people s taste Swedish products are perceived to have fairly good quality, quality control measures should be considered as this still could be and issue for certain products Swedish lifestyle is known as an ideal and can appeal by describing how items can enrich one s life Steady target market, especially for 20s-40s females have interest in Swedish Kawaii products Several famous classic designers are established in the market, successful examples are Stig Lindberg and Lisa Larsson Swedish products are often unique and regarded suitable gifts. Special gift-wrapping and packaging should be considered Source: Business Sweden market observations CERTAIN HOME FURNISHING INDICATE STRONG GROWTH POTENTIAL 1. Good sleep - The current demographic shift aging and shrinking population has created a large market for active seniors with money to spend. These consumers have strong interest in cozy products and being healthy. Any item that can provide good sleep, psychologically or with medical evidence, has potential in Japan. 2. Glamping - Glamping is a new word combination of glamourous and camping. This trend has recently got a lot of attention in the home furnishing as well as the tourism market. The market is driven by people that are hesitant to try real camping but enjoy a bit of an outdoor experience. The target segment is mainly made up of people aged living in metropolitan areas interested in unique kitchen appliances or home furnishing for a good glamping memory. As Swedish products have a good image for being ecological and sophisticated, items associated with glamping may have potential. 3. Holiday event The Japanese retail industry is looking for the next Halloween for additional marketing opportunities. Easter could be one possible future holiday event. Any item that can be used for special holiday home furnishing will have potential, such as unique garlands, wall stickers, party goods, or Fika - related appliances. 4. Photogenic Products are increasingly not only a product but also a part of a lifestyle. Companies need to explain visually how items will add joy to consumer s daily lives. Any trendy item with catchy design has strong showcase potential to reach core target consumers and untapped market potential by using social media. 5. Pattern - Swedish textiles and patterns is one of the most prominent areas of Swedish design in Japan. One low-hanging fruit is to license out patterns and/or designs on a commission basis based on sales of licenses. Successful examples can be found in interior fabrics, such as cushions, kitchen lines, but often include stationary, bags and shoes as well. MUST KNOW DESIGN TERMINOLOGY Zakka is a vague Japanese concept and there is no direct translation in English or Swedish. Most of home furnishing items are classified as Zakka, except for home interiors. Zakka are products that improves your home, life and appearance. Kawaii means cute or loveable in Japanese. Kawaii is an important factor to succeed in Japan. Swedish home furnishing products are typically categorized in this Kawaii concept regardless of its sometimes distinct design and non-decorative characteristics. Hokuou means the Nordic countries, including the Scandinavian countries and Finland. Hokuou-Zakka is a well-known concept in the Japanese home furnishing market and often uses colourful motifs from the Nordic countries. INSIGHTS FROM JAPAN S INTERIOR DESIGN MARKET BUSINESS SWEDEN 5
6 BUSINESS SWEDEN Box 240, SE Stockholm, Sweden World Trade Center, Klarabergsviadukten 70 T F tokyo@business-sweden.se Business Sweden s purpose is to help every Swedish company to reach its full international potential and help companies abroad to reach their potential by investing in Sweden. The purpose is operationalised through 450 staff deployed at 14 offices in Sweden and at 55 offices in 49 key markets abroad. Feel free to contact us for any questions regarding Swedish international trade or foreign investments in Sweden.
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