Watches in Japan

PROSPECTS

Expansion of tourism driving up demand for watches

The rising number of inbound tourists and high unit prices supported growth in watches at the end of the review period. Government efforts to develop the Japanese tourism industry and boost the number of inbound tourists are helping to drive up sales in watches, thanks to the country’s strong reputation for product authenticity and high-quality craftsmanship.

Sharing services emerging in watches

Smartwatches and sharing services represent an ongoing and growing threat to traditional watches. Smartwatches primarily compete with mid-priced watches, as they occupy a similar price range and target a similar consumer base.

Stores taking on a changing role

Internet retailing gained share in watches in the latter part of the review period, with the category seeing the interplay of e-commerce and store-based retailing serving to change the role of stores for many retailers. Increasingly, physical outlets are being positioned as showrooms, with many consumers visiting stores to see and try out products before purchasing them online, where they can find attractive discounts.

COMPETITIVE LANDSCAPE

Citizen ventures into hybrid smartwatches

In October 2018, Citizen partnered with Fossil Group to establish a presence in hybrid smartwatches. Under the partnership, Citizen will manufacture hybrid smartwatch movements incorporating Fossil Group’s technology, sell hybrid smartwatch movements and complete watches to the broader watch industry, and collaborate with Fossil in bringing innovation to the smartwatch category.

New brands entering market to appeal to modern consumers

Rolex’s Tudor brand entered Japan in October 2018, targeting the strong performance of high import watches in the market. The brand’s entry into the market utilised a mix of permanent retail locations and pop-up stores in Tokyo and Osaka, with a plan to quickly extend distribution to Nagoya and Sapporo.

Domestic brands see an improved performance

Having previously witnessed a trend of decline, domestic brands experienced a revival in their fortunes in 2018. As mentioned above, Citizen was boosted by the celebration of its centenary.

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