Japan’s Home Furnishings Battle Rages On

Strategy Briefing

About This Report

Nov 2018

Home and garden in Japan is dominated by the domestic retailer Nitori Co Ltd. Known for its affordable fast-fashion furniture, Nitori has been on a winning streak, rapidly expanding to a network of 523 stores while its competitors grapple with local consumer preferences and management disputes. This report focuses on the state of play, business strategy and product mix of four key competitors in home furnishings: Nitori Co Ltd, IKEA Japan KK, Ryohin Keikaku Co Ltd and Otsuka Kagu Co Ltd.

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Japan’s Home Furnishings Battle Rages On

Nitori is the leading furniture retailer

Nitori Co Ltd is the leading player in home and garden in Japan by far. The high degree of fragmentation makes it difficult for any one player to amass a significant share, as consumers have traditionally favoured small-scale manufacturers and local craftspersons. However, Nitori has made the most of its first-mover advantage and secured the leading position with its mass-produced, low-cost furniture.

Nitori’s closest competitors are Inter Ikea Systems BV and Ryohin Keikaku Co Ltd, given that their product portfolios and brand positioning are comparable. Seven & I Holdings Co Ltd retails furniture and home textiles under the Bals brand, and Karimoku Inc only manufactures furniture.

Panasonic Corp and Midea Group Co Ltd were second and third in 2017, due to strong sales in lighting fixtures and light sources. Makita Corp specialises in power tools and gardening equipment, while Sumitomo Corp focuses exclusively on garden care. Groupe SEB comes in at ninth place on the back of the enduring popularity of its non-stick stove-top cookware.

Scope
Nitori is the leading furniture retailer
Dynamic growth at Nitori outpaces the industry
Smaller urban outlets contributed to declines in average spend
Home delivery is a challenge for IKEA Japan
Smaller stores pose a unique dilemma for IKEA Japan
Ryohin Keikaku Co Ltd has a strong foothold in China
Ryohin Keikaku Co Ltd bets on suburban shoppers
Leadership squabbles damage Otsuka Kagu’s reputation
Red flags arise for Otsuka Kagu
Furniture retailers thrive on variety and innovation