Shimamura Co., Japan’s second-largest apparel company that runs around 2,200 stores nationwide, has dispatched a team of four buyers to Seoul every month since June to find South Korean fashion brands that have potential in the Japanese market.
Japan’s other large companies in the general trading and distribution sectors, such as Mitsubishi Corp., Ito-Yokado Co. and Itochu Corp., are stepping up their efforts to acquire Korean fashion, cosmetics and food brands’ operations in the neighboring country, industry sources say.
“We have recently received an inquiry from a Japanese general trading giant that if we could sell Japanese operations of some firms we own or have a stake in, like Matin Kim and Depound. We were surprised that such a big company has contacted us for Korea’s homegrown fashion brands,” said an official from e-commerce company Hago House on Wednesday.
NEW TREND
“Some Japanese conglomerates have recently started looking for Korea’s hot brands – we see it as a new trend. Previously, Korean brands entered Japan on their own by opening flagship stores in Tokyo,” said Kim Sung-il, chief executive of trading company Jumbo-K.
Kim, who supplies Korean products to Japan, saw 3,000 pairs of slippers with K-pop sensation BTS members’ characters sold out in a Tokyo-based Shimamura store within two days in the summer of 2021. He immediately received an additional order of 30,000 pairs at the time.
Korean products gain more traction on online platforms.
Qoo10 Japan, the third-largest e-commerce platform in Japan following Amazon Japan and Rakuten, sells around 400 Korean cosmetics brands online. “The transactions in Korean beauty products on our platform rose by 3.5 times last year compared with 2019. The first-half revenue from Korean fashion, food and entertainment products increased more than 30% on-year,” a Qoo10 official said.
T-shirts with Korean instant noodles' logo at an Aeon store in Tokyo
GROWING SALES
Sales of Korean distilled spirit soju and instant noodles are also on the rise. Korea’s No. 1 soju maker HiteJinro Co. said its soju exports to Japan rose by 22.4% and 27.2% on-year in 2020 and 2021, respectively.
Samyang Foods Co. saw the logo of its hit product Hot Chicken Flavor Ramen's on t-shirts at Aeon Co., one of Japan’s largest retailers. Backed by the growing popularity of instant noodles, the Korean food firm’s Japanese affiliate saw its first-half revenue jump 35.5% on-year to 11.6 billion won ($8.8 million). The revenue in 2022 reached 20.8 billion won, 2.5 times the performance in 2020.
It is not clear yet whether the Korean brands’ popularity in Japan will continue into the long term or not, industry watchers say.
Some Korean fashion brands and platforms are yet to see meaningful achievements in Japan. Online fashion platform Musinsa, athleisure brand Xexymix, casual clothing company Thisisneverthat and streetwear brand Nerdy entered Japan in recent years but their businesses are still struggling there.
“It is hard for foreign businesses to put down roots in Japan if they don’t understand the complicated distribution structure, where importers, second vendors, first vendors and distributors are connected to sell a product. But most Korean brands which seek to run businesses in Japan prefer to directly enter the market on their own,” said Jumbo-K CEO Kim.
