MILAN – They know exactly what they want — and the Made in Italy label speaks volumes.
This brief description of Japanese consumers is only one of the reasons Italian luxury brands — and some of their European neighbors — are turning their attention back to Japan after years of intense focus on China.
Valentino, Max Mara and Dior are only some of the labels with events planned in Japan over the next months. Bottega Veneta also has selected Tokyo to unveil the first designs by newly appointed creative director Daniel Lee, who will present his pre-fall collection in Tokyo the first week of December. This will coincide with the Italian luxury company’s opening of a flagship in Ginza, which will be its biggest in Asia.
According to Deloitte’s “Global Power of Luxury Goods 2018” study, the growth of Japan’s economy “seems to be accelerating,” mainly due to Abenomics, the economic and monetary policies advocated by Prime Minister Shinzō Abe since 2013, which have led to low unemployment and strong export growth. “The economic outlook for Japan for the next year is optimistic. Japan’s luxury goods market, one of the largest in the world, is growing steadily again after a long period of global and domestic crisis, and is expected to grow further over the next years thanks to rising consumer confidence and the purchasing power of the younger generations, creating prospects for an increase in spending for luxury goods,” it said. In addition, the number of tourists is expected to rise in 2018.
Will Higham, a London-based behavioral futurist whose Next Big Thing advisory helps a range of big corporations attract and sustain consumers’ attention, said he was “definitely noticing a shift toward Japan. It totally makes sense with the economy looking up and a 2 percent increase in gross domestic product.”
Higham also pointed to Abenomics as a reason for the recovery after difficult times and an aging and shrinking population, expressing his belief that people underestimated the growth of Japan by focusing solely on China. Many were “looking across the globe to see where it was easiest to do business but now it appears that it is not always easy to do business in China, what with the [U.S.] trade war and tariffs starting to come up. People almost forgot about Japan because of a few bad years.”
To be sure, Higham conceded that “Japan is doing well because the rest of Asia is doing well” and noted that the country relies on solid infrastructures, which are still lacking in several emerging markets. He touted Japan’s advanced technology and continued investments in innovation in retail and manufacturing. “Japan understands what the consumer needs,” he said.
What’s more, Higham said the world is “slowly shifting toward Japan’s slower, zen, pared-down philosophy and minimalist attitude. The rest of the world is almost catching up to this.”
He touched on the beauty industry and said that after the success of Korean cosmetics, Japanese beauty products “are getting on trend. There is a different beauty philosophy. It’s about health care and well-being. In Korea, it’s about fixing a problem, in Japan it’s about preventing it.”
Other elements, he believed, are also drawing attention to Japan, from Tokyo hosting the Olympic Summer Games in 2020 to the popular Netflix and Fuji coproduction reality show “Terrace House.” “It’s like ‘Big Brother,’ but nice, there’s no gossip, no falling out, just a group of young people trying to make a meal together or to help someone who is shy to talk. It’s simple and it’s a hit in Japan and in the West.”
He spoke of Kenzō Takada focusing on interior design and a strong Japanese influence at Paris-based interiors and home trade show Maison & Objet in September. “It’s about simplicity, minimalism and decluttering. Young people don’t want clutter and distraction now, they are getting back to understated quality,” he contended.
Michele Norsa, luxury strategic adviser and vice president of Missoni, which is accelerating its distribution in Japan following the sale of a 41.2 percent stake to FSI Mid-Market Growth Equity Fund, concurred with Higham, saying that in Japan, investments in real estate never stopped, as boutiques and department stores were renovated over the years. He cited the new Ginza Six luxury shopping complex as an example, or the new neighborhood around the station in Osaka.
“Japan remains a point of reference and Tokyo is buzzy, interesting, young and full of ideas. The difference in price is no longer an issue now as prices are in line with China, for example. The structure of department stores and trading companies is significantly easier and dynamic,” said Norsa.
While accessories in the affordable price range are very successful in Japan, in terms of apparel, Norsa said that Japanese consumers are “very sophisticated and attentive to quality, look for very exclusive products and materials and they know exactly what they want and are very attentive to sustainability, they check the origin of the product and ‘Made in Italy’ is strongly privileged. Also, they seek unique brands. Let’s not forget this is the country of Comme des Garçons, Yohji Yamamoto and Issey Miyake. Content is important.”
In their November 2017 study on shifting distribution channels in Japan for McKinsey & Company, Jean-Baptiste Coumau, Benjamin Durand-Servoingt, Aimee Kim and Naomi Yamakawa said that luxury fashion stores have also embraced the experiential shopping trend.
“Indeed, we observe more and more of these formats including cafés, restaurants, hair salons, or even flower shops within their walls as a way to become a destination for those in their 20s and 30s,” the quartet wrote.
The study also cited shopping malls Ginza Six in Tokyo or Doton in Osaka, Japan, and fashion districts like Aoyama and Daikanyama in Tokyo. The study said attention over the past few years had been focused on China and South Korea to the detriment of Japan.
“The perceived morose economic situation of the Japanese economy, its aging and declining population, or its historical deflation had much to do with it. Yet with 3.6 trillion yen (approximately 28 billion euros) spent each year in luxury goods, Japan is the second largest luxury market in the world — behind the United States, but still ahead of Mainland China.”
The study also found that over half of local luxury executives report that Japan is seen “as a growth engine and a profit generator” and that Japan accounts for up to 30 to 40 percent of some global luxury brands’ profitability.
McKinsey noted the downturn experienced by Japan in the 2007 to 2012 period, hit by the global economic crisis followed by the Fukushima catastrophe. Japan luxury spending shrank by over 1 trillion yen, or 9 billion euros, and reached a floor level in 2012.
“In 2013, the market started to recover in what we called at the time a ‘Godzilla effect.’ Since then, we have observed a dynamic growth momentum at 8 percent per annum between 2012 and 2016, allowing the Japanese luxury market to recover all of the spending lost in the prior period,” McKinsey said.
The study attributed the recovery in part to a cheaper yen, positive inflation trends, and an increase in household spending. Looking ahead to 2020, the study anticipates the market to grow at a more moderate annual rate of 3 to 4 percent.
“With the Japan luxury market growing again and remaining a major profit driver for many established luxury players, we have observed a renewed interest in Japan in the past year or so. Brands with no presence in the archipelago, or that exited it, are contemplating market entry — often as part of their Asian strategy.”
As reported, signaling the importance of the Japanese market for Valentino, the Rome-based luxury house will hold a runway show in Tokyo on Nov. 27 to present its men’s and women’s pre-fall 2019 collections. Marking the event, Valentino’s flagship at Ginza Six will be temporarily transformed into a concept store conceived by Valentino’s creative director Pierpaolo Piccioli and Sarah Andelman, the former creative director of Colette.
“Japan has always been an important market for Valentino and now more than ever it continues to be a point of reference for our business globally,” said chief executive officer Stefano Sassi. “Where better to celebrate both the launch of a new collection and the launch of a new retail concept?”
Max Mara is planning an event called “I Love Max Mara” at the Hankyu Umeda department store in Osaka running from Oct. 26 to Nov. 10, displaying a selection of archival designs, including the brand’s staple and core product — coats. To wit: The Teddy Bear Icon Coat will become an installation and appear at the center of the hall. The company will also open three different pop-up stores across the department store during the week of the Italian Fair at Hankyu Umeda, where it also hosts various coat-focused events.
After an edition in April in Tokyo and in July in Nagoya, the Italian lifestyle, food and music festival called “Italia, amore mio! [Italy, my love]” will take place in Osaka on Nov. 3 and 4 in collaboration with the Italian institute of culture among others, and organized by the Italian Chamber of Commerce in Japan.
“Japan is an extraordinary country with a great history and aesthetic culture, which was the first to appreciate the values of Italian design,” said Luigi Maramotti, chairman of the Max Mara group. “It’s important to keep this special relation alive with the new generations.” Max Mara first entered Japan in 1989.
Giovanni Zoppas, ceo of Thélios, the joint venture inked last year between LVMH Moët Hennessy Louis Vuitton and Marcolin, was in Japan recently for a market visit to meet with major department stores and specialty and fashion stores in light of the launch of the new Kenzo eyewear line and said “Japan is a fashion-looking-forward country, a place where you can find an astonishing mix of tradition and future. If you come here, save a place in your mind for all the things you will experience and learn: new brands, new stores together with the usual attention to the customers, the latest Internet apps together with a touch of naïveté …daily life is a (delicate) show to bring back home with you.”
The first Kenzo eyewear collection realized by Thélios will be available in stores globally starting from February. The sun and prescription designs were presented at Kenzo’s French headquarters in Paris during the Silmo eyewear trade show.
Launching Bally’s latest artist collaboration with Swizz Beatz and the London-based spray paint artist known as Shok-1 at its flagship in Ginza, Frédéric de Narp, ceo of the Swiss brand, who began his career in Japan, said the market remains at the epicenter of the luxury goods industry and is the brand’s second largest. The Ginza store is Bally’s largest in the world.
“Still today there is no other country or population recognizing and having the level of sophistication [of Japan] to recognize and care for what’s behind the product,” he said. “And that’s the essence of luxury. We work tirelessly for hours to develop craftsmanship around our products to deliver the quality. And here the Japanese do recognize that and care for that. And that’s unique to Japan.”
According to the Altagamma and Bain & Co. Worldwide Market Monitor update released in June, sales of personal luxury goods in Japan this year are seen growing 5 percent, boosted by tourist spending, in particular from Chinese and South Korean customers, coupled with strong local growth. At constant exchange, growth is expected to stand at between 6 and 8 percent. The study sees Tokyo and Osaka “booming” despite partial redirection of spending on luxury experiences. It also states that local influencers and word of mouth are key drivers for tastes and purchases of younger generations.