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“Fast Fashion” trend in Japan – Cheap is better than Luxury?

With big non-Japanese brands like H&M and Forever21 coming to Japan with their “fair quality with surprisingly low price” in 2009, the Japanese fashion industry is going through a never-seen-before price overhaul. For a long time, Japanese consumers were said to be very picky and closed-minded towards overseas products with no brand names as they always loved luxury high-end brands with premium quality. As the
market is changing, so too are consumers’ taste. This may be the time for overseas no name fashion brands to come into the Japan market.

For at least a decade or two in the past, fashion consumers have been going after products at “premium quality with premium price”. Women of all ages adored Chanel, Gucci, Prada, etc., and were wrapped in their dresses from head to toe. But not anymore. With the worldwide financial crisis as well as consumers’ taste and consumption pattern changes, current fashion industry in Japan is taking a step in a totally new direction. There is now a growing popularity for products which are “fair quality with unbelievably inexpensive price”.

With H&M and Forever21 coming into Japan in 2009, Japan’s own fashion brand, “g.u.”, part of Fast Retailing Co., ltd., started to sell a pair of jeans for an unbelievable 990 yen (approx. US $10) as of March, 2009. The brand carries almost 500 products, and almost half of them are priced under 990 yen. They have a total of 72 stores in Japan as of July 10, 2009. Since the release of 990 yen jeans, their sales are said to be constantly growing at a rate of 170% . The jeans are said to be selling at the rate of one million pairs per year.

In order to compete in today’s apparel market, the strategy of Fast Retailing Co. ltd
is to try and capture customers at as many price ranges as possible. Their strongest brand, UNIQLO – who have opened their doors in 7 countries so far – captures consumers with products at “mid-range” price, while “g.u.” covers the products with a “low-end” price. Their business model is very similar to that of one of the most powerful international fashion retailers, Gap Inc. While Gap captures consumers with products at “mid-range” price, its sister brand Old Navy and Banana Republic target low-end price products and high-end price products of the apparel industry, respectively.

KN
2009/08/27

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