The Japanese Distribution

System

By Nozomi Sakurai

Sophia University, Tokyo

Traditional Japanese Traditional Japanese

Distribution FormsDistribution Forms

Historical Development1. Established in the feudal era2. Had many small regions;

manufacturers develop proper distribution forms

Characteristic Distribution Forms1. Many small wholesalers and retailers2. Multi-layered distribution channels3. Complicated systems (ex: rebates)

© NozomiSakurai, 2009

RetailersRetailers

Retailers• department store, supermarket, convenience store,discount store, drug store, shopping center, etc.

Focus on Department Stores…• First department store-Mitsukoshi Gofukuten in 1904

• Sells luxury products• Shop-in-shop system

(http://www.mitsukoshi.co.jp/index.html)

© NozomiSakurai, 2009

ConvenienceConvenience StoresStores

The Success of Convenience Stores• More than 5000 stores in Japan• Sales: more than 7 trillion, 800 billion yen (2008)

Reasons• Change of Japanese lifestyles• Developed a strategy to put stores in certain areas

(http://www.lawson.co.jp/index.html)

© NozomiSakurai, 2009

(http://www.sej.co.jp/index.html)

Changes of RetailersChanges of RetailersProblems• Rebate system-manufacturers pay back money to the retailers after manufacturers collect money from the retailers

• Retailers can return products if the products wereunsold

Changes• Decrease of small retailers• Open cost: prices which are set by retailers• Private brands: retailers plan, produce, and sell their own products

© NozomiSakurai, 2009

Uniqlo'sUniqlo's SuccessSuccessTraditional Retail Forms• Rebate system-manufacturers pay back money to the retailers after manufacturers collect money from the retailers

• Retailers can return products if the products wereunsold

Uniqlo's Success Formula• Exclude all middlemen; produce and sell private brands exclusively; product innovation

Results in LOW PRICES !!© NozomiSakurai, 2009

These slides are part of a student podcast project related to the book “J-Management: Fresh Perspectives on the Japanese Firm in the 21st Century” edited by

Dr. Parissa Haghirian of Sophia University, Tokyo, Japan.

For further information about the podcasts and the book, please visit www.parissahaghirian.com

These slides are to be used for teaching and educational purposes only.

About This Project