TOKYO — The demographic diversity of Asia — from Japan’s aging society to the fast-growing consumer bases of China and India — offers up a wealth of business challenges and opportunities for retailers and manufacturers, according to executives speaking at a conference here.
The Consumer Goods Forum’s annual Global Summit kicked off its three-day run here Wednesday, drawing hundreds of participants from the retail, consumer goods and food industries. The organization brings together chief executive officers and other executives of more than 400 companies across 70 countries.
Here are some highlights of the first two days of the conference:
• Tadashi Yanai, chairman, president and ceo of Uniqlo parent Fast Retailing Co. Ltd., spoke candidly about how his company turned its missteps into learning experiences. The executive gave several examples of where Uniqlo had failed when entering new markets, from expanding too quickly in London and subsequently having to close several stores, to selling items that were priced too low in China, not realizing that Chinese consumers would want the same quality of products available to shoppers at Uniqlo stores in Japan.
When entering the U.S. market, Yanai said the company miscalculated by simultaneously opening three stores in New Jersey shopping malls, only to find that suburban consumers who were unfamiliar with the brand didn’t shop there. The stores closed, and unsold stock was transferred to Uniqlo’s SoHo store in New York, which was much more successful.
“When failing, I think it’s best to fail early, when [the business] is small. I think if you fail early, you’ll be able to succeed the next time,” Yanai said.
• Nobel Peace Prize Laureate Muhammad Yunus spoke passionately about his mission to create businesses to help solve world problems like hunger and poverty.
As chairman of Bangladesh’s Yunus Centre and founder of Grameen Bank, the professor spoke of how he applied business principles to improve people’s lives, from granting collateral-free loans to women in his native Bangladesh to setting up agricultural projects in Haiti.
Yunus also drew laughter from the crowd when talking about how he learned how to run his businesses by looking at what for-profit banks were doing — and then doing the exact opposite.
“We are the only bank in the whole world which is lawyer-free,” he said. “And it works.”
• Executives from Kao Corp., Aeon Co. Ltd. and Seven-Eleven Japan Co. Ltd. spoke about how their businesses are catering to Japan’s fast-aging population.
Nearly a quarter of Japan’s population is over the age of 65, and the country’s senior citizens are “the richest in the world,” according to Motoya Okada, president and group ceo at Aeon. Aeon has rolled out smaller supermarkets in densely populated urban areas that are easy to reach by foot. The retailer also opened a large store in Tokyo featuring a café, bookstore and hobby space, catering to older consumers’ desire for social interaction.
Kao has made an effort to label its products more clearly and place them in smaller, lighter containers.
Seven-Eleven has launched a delivery service for precooked ready-to-eat meals and groceries to assist less mobile elderly customers.
• Geping Guo, chairman of the China Chain Store & Franchise Association, said Chinese retailers have witnessed a slowdown in business over the last couple of years in line with the broader international macroeconomic trend.
Chinese retailers’ sales growth this year “will remain within 10 percent,” she said, citing a survey conducted by her organization.
She said Chinese retailers are facing challenges as they lack an adequate level of managerial skills and knowledge of the needs of consumers in third- and fourth-tier cities as they expand to those markets.
• Kishore Biyani, founder and group ceo of India’s Future Group, spoke about his country’s extremely young consumers looking for “branded, value-added” products.
An Indian born in 2009 will over his or her lifetime consume 13 times the amount of goods as one born in 1960, he said, adding that 60 percent of India’s population is under the age of 35. “Western fashion is doing phenomenally well,” he said.
• Yoko Ishikura, a professor at Keio University’s Graduate School of Media Design, said Japan needs to work harder to empower its young people and give them more practical hands-on business responsibilities — perhaps even internationally — early in their careers. The country also needs to rectify its woefully low gender parity levels and tap into this underutilized but educated segment of the population, she explained.
“My immediate suggestion is to get out of the country,” she said, offering her advice to Japan’s young people. “But we [older Japanese need to] make sure that Japan will be the much better place when they come back.”
• Executives are placing a greater emphasis on “back-to-basics” strategies like product development, marketing and brand building, according to a Forum and KPMG International-sponsored survey of leaders from 442 of the world’s largest consumer companies.
Executives are considering more “trendy alternatives” such as social media, e-commerce and mobile sales and development less of a priority, the research concluded.