The apparel retail market in Japan is a mature one with stagnant growth in both volume and value terms over the period from 2011 to 2015 (the ‘‘Review Period’’). Retail sales value of apparel decreased at a CAGR of 9.5% over the Review Period to reach USD62,452.9 million in 2015 and retail sales volume of apparel decreased at a CAGR of 0.5%. The decrease in retail value sale and retail volume of apparel in Japan from 2011 to 2015 was mainly due to shrinking disposable incomes, stagnating Japanese population, and a growing ageing population which had made expansion through domestic consumption difficult. This is corroborated by declining consumer expenditure on apparel items as recorded by Statistics Bureau of Japan data.
Household expenditure on clothing and footwear declined from JPY14,245.0 per month in 2000 to JPY9,832 per month in 2015. The sustained economic downturn in Japan has caused a drop in disposable incomes. Apart from that, the consumption pattern in Japan apparel retail market has gradually shifted to local and imported fast fashion brands with affordable price. In other words, consumers tended to purchase more apparel with lower prices. This further caused affordable yet trendy mass market local apparel brands and other imported fast fashion brands to increase in traction, which led to decrease in the overall retail sales value of apparel. During the Review Period when the apparel retail market in Japan witnessed shrinking retail sales value and volume, increasing inbound tourism and growing internet apparel retailing have contributed to offset part of the decrease.
In the Forecast Period, while the growth constraints including shrinking disposable incomes, stagnating Japanese population and ageing population are likely to persist, the apparel retail market in Japan is expected to recover due to growing popularity of internet apparel retailing, increasing inbound tourism and changing consumer pattern. The retail sales value of apparel is projected to reach USD72,722.3 million in 2020, representing a CAGR of 3.4% over the Forecast Period. In the Forecast Period, the internet retailing is expected to continue to become increasingly prominent in consumer lifestyles in Japan, while consumers are also expected to become increasingly comfortable with shopping online. The apparel retail sales value through internet retailing grew at a CAGR of 10.5% during the Review Period. It is expected that the internet retailing within apparel retail will have a steady growth over the Forecast Period. In addition, the flood of tourists into Japan is set to grow further over the Forecast Period. Growth in the number of inbound tourists will continue to be driven both by government campaigns and by the efforts of private companies. The Japanese government has set a target of 20 million tourist arrivals annually by 2020. As part of its tourism growth strategy, the Japanese government also aims to increase the number of outlets participating in its duty-free scheme to 10,000, up from 4,000 in 2014.
However, despite the forecast growth in terms of retail sales value, the annual retail sales value in the Forecast Period will be generally lowered than that in the Review Period. This is partly due to ongoing economic constraints and the increasing preference towards mass-market apparel due to shrinking disposable incomes, and partly due to the decline in population and ageing population which results in lower demand in fashion clothing and apparel for work. In 2015, Japan imported USD13,315.1 million of knitted or crocheted apparel and clothing accessories, representing a CAGR of –3.3% over the Review Period. The apparel import market in Japan is highly fragmented, with apparel imported from more than 100 countries worldwide, and mostly from Asian countries. China is the largest exporter to Japan, followed by Vietnam and Indonesia. These three countries accounted for 86% of Japan apparel imports in 2015. Hong Kong is the largest 35th importing country in the same year.