Luxury Portable Consumer Electronics in Japan

PROSPECTS

Luxury wearables struggling to gain traction

Luxury portable consumer electronics sales in Japan are entirely comprised of wearables. Wearable electronics initially launched in the market in 2014 amidst great expectations, with luxury products first making an impact in 2015.

Luxury mobile phones yet to establish a presence

Luxury mobile phones’ potential for development in Japan is hampered by complex legal requirements and competition from mass-market products. As in wearables, functionality remains the key factor in generating demand in mobile phones.

Appealing to inbound tourists key to growth

As local consumers search for functionality rather than luxury, spending from inbound tourists has become an important factor supporting the growth of luxury portable consumer electronics in Japan. Department stores and non-grocery specialists have become important channels for capturing sales from these inbound tourists.

COMPETITIVE LANDSCAPE

Limited product offer

In 2018, luxury portable consumer electronics continued to account for only a small proportion of overall sales of portable consumer electronics. There were only three major brands with a more than negligible share of sales in luxury wearables in 2018: TAG Heuer from LVMH Moët Hennessy Louis Vuitton SA, Frederique Constant from Citizen Watch Co, and Apple Hermès iWatch from Apple Japan Inc.

TAG Heuer retains the lead

TAG Heuer remained the leading brand in luxury portable consumer electronics in 2018. The brand launched the TAG Heuer Connected Modular 45 smartwatch in 2017, which was followed by the addition of the Modular 41 to the range in 2018.

Strong competition from mass-market products

The limited range of products available in the Japanese market means that much of the competition for luxury portable consumer electronics brands comes from non-luxury alternatives, which have seen much greater product development. Within overall wearables, Apple remains the leading company, offering additional functions that are unique to Japan such as compatibility with Suica, a local prepaid e-money system for transportation and shopping.

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