Japan is one of the world’s largest fashion industries, and is home to many unique trends and innovations. New styles and fashion brands gain popularity all the time. The annual turnover of Japan’s clothing industry is USD 96 billion, according to FashionUnited. The country’s apparel and footwear industry has declined slightly in recent years, but certain segments and companies are flourishing and have promising future prospects.
Japan’s economy has been struggling since the global financial crisis, facing three recessions in that time. In 2015, the country’s economy grew by only 1%-1.5%. In an effort to boost the economy, Japan’s central bank elected to implement negative interest rates in order to encourage lending and lower the cost of borrowing. However, while this tactic had some success, its effects have lately declined.
In 2015, according to Euromonitor, volume sales of apparel and footwear fell slightly. The country’s financial situation has meant that many consumers have less spending power, and are therefore buying less. However, more affluent consumers have actually seen the opposite effect, likely offsetting the decline somewhat.
Luxury goods, including fashion brands, aren’t being hindered by the current Japanese economy. While other industries struggle, luxury goods continue to grow at a comfortable rate. This is due largely to tourism — Japan’s weak yen, as well as a number of other factors that make it easier and more appealing for Chinese tourists to visit, has been encouraging more and more tourists to visit. It is cheaper for them to buy luxury goods in Japan and bring them back home, than to buy them in their native country. This means that luxury clothing has been thriving despite the challenges facing the apparel industry in general.
Japan’s aging population is another challenge to the market. In general, the older population segment has less interest in fashion trends. This group also has less need for business apparel as its members retire.
One trend affecting the Japanese fashion market is a move towards more casual and athletic clothing. The government has recently increased its focus on its annual Cool Biz campaign, which encourages workers to wear lighter, more casual clothing at work during the hot summer season. This initiative was begun in 2005 with the intention of reducing CO2 emissions and electricity use — if people wear cooler clothes, they can reduce the use of air conditioners and save energy. The campaign has encouraged open-necked, short-sleeved shirts rather than suits, and has recently added polo shirts and aloha shirts to its suggested office apparel.
The Cool Biz campaign is one of the factors that has been leading to a more casual style in the country, as people abandon suits in favor of more comfortable clothing during the summer. The aging population has contributed towards demand for casual, comfortable clothes, as many older consumers prioritize these qualities over others.
Athleisure and athletic apparel is another new style that is becoming more popular in the country, particularly athletic footwear. Health and wellness has become a widespread trend in Japan. This has led to increased demand for sportswear, but has also given rise to sports-inspired clothing. This segment of the market is expected to continue to flourish, especially with the approach of the 2020 Tokyo Olympics.
E-retail is also affecting the Japanese fashion market. Online shopping, both through desktop and mobile, is popular with a high percentage of Japanese consumers. E-retail sales of apparel and footwear have been rising significantly in the past few years. However, high internet usage also means easy access to second-hand products, which could threaten the market.
There are many factors at play in the Japanese fashion market. While there are several challenges to navigate, there are also many opportunities to take advantage of. With its variety of styles and trends, this market is not one to be ignored.
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