How Japan Large Appliances Market Is Positioned?
Japan is among the most developed nations in world with GNI per capita of USD 36,680 in 2015. It has very high per capita income, and people in Japan have very high standards of living. Consumer experience is the very important factor while developing the product for Japanese large appliances market. Total demand for large appliances has declined from ~ million in 2012 to ~ million 2015. Market for large appliances in Japan was estimated at USD ~ billion in 2015. Percentage decline in terms of revenue was less compared to percentage decline in terms of number of appliances sold as demand for high end products has increased. Increased concern for environment and value added features with smart technologies has promoted the sales of appliances with high price tag.
Japan is home to some of the prominent large appliances brand in the world which includes Panasonic, Hitachi, Daikin, Sharp, and others. Demand for high end technology products, loyalty to domestic brand, better after sale service and replacement of old product with latest and upgraded appliances were key growth drivers creating demand for large appliances in Japan. Exports over the period have declined owing to closure of manufacturing bases of large appliances in Japan. Total exports for 2015 were reported at USD ~ billion. Though the large appliances market is dominated by domestic companies many products were imported from manufacturing bases outside Japan due to unavailability of raw material and intermediary product in Japan. Import value is much higher than exports.
What Have Been The Major Segments That Has Driven Change
Market for large appliances is dominated by demand for air conditioners in Japanese large appliances market. In 2015, ~ million units of air conditioners were sold in Japan large appliances market. This was ~% of total number of large appliances sold in Japan Market. Television sales with market share of ~% has was second most sold large appliance totaling ~ million units. Washing machine and refrigerator were sold in nearly equal numbers, with each selling ~ million units in 2015 accounting for ~% market share each.
Air Conditioner: Air conditioner sales have dominated the large appliances market in terms of revenue with a market share of ~% in 2015. Sale of air conditioner generated revenue worth USD ~ million in 2015. Demand for air conditioner in Japan was mainly driven by a necessity to have clean air with ambient temperature and humidity condition. It has been witnessed that more than ~% sales for air conditioners in Japan pertains to split A/C.
Shift in consumer preference for HDTV and smart TV has led to replacement of old television sets in Japan which is the major growth driver. The market is largely dominated by domestic brands such as Sharp, Toshiba, Panasonic and others which have together accounted for more than ~% of television sales in Japan. Large screen television sets are gaining market share in Japan with advent of better picture quality and added features.
Major Distribution Channel
Distribution network of large appliances in Japan was majorly dominated by brick and mortar stores across Japan with sales largely dominated by large retail chains such as Yamada Denki, Bic Camera and others. Online shopping in Japan is dominated by market place like Rakuten or by mall sites. Several large retailers such as Yamada Denki and Bic Camera have their own online platform.
Product delivery is the major determining factor for choosing the medium of sales. Logistics handling of large appliances in Japan is very fast, most appliances are expected to be delivered by next day. Delay in excess of 2 days is not accepted. For a small country like Japan such expectation are practical and is met by most retailers in both online and offline mode.
Large appliances market in Japan was largely dominated by domestic brands. Panasonic, Hitachi, Sharp, Sony, Toshiba, Mitsubishi are some of the leading brands which are operating in Japan large appliances market. These companies together constitute more than 90.0% of total revenue in Japan large appliances market. International companies such as LG, Electrolux, Haier have limited share with majority of the demand for their products coming for some specialized product. LG which is among global top 3 large appliances market has less than ~% market share in Japan. Panasonic leads the market for air conditioner in Japan. Panasonic is also one of the prominent players in washing machine segment. Sharp leads the market for television in Japan and is also popular in refrigerator market lagging the market leader by small percentage. Hitachi is one of the biggest conglomerates in Japan and was the market leader in washing machine segment with ~% share in washing machine segment of Japan. Daikin is the second largest player in the air conditioner market. Toshiba which has sold its large appliances business to China based Midea group was the ~ largest player in television and washing machine segment and~ largest player in refrigerator segment.
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Ankur Gupta, Head Marketing & Communications