Japan is the world’s second largest sporting goods and fitness equipment market after the United States with a wholesale market value estimated at $13.8 billion in 2009. A key growing demographic in this space is the women’s market. Golf, running and 30-minute circuit training are a just few examples of the activities popular among Japanese women. Another important demographic is that of Japanese middle-aged consumers, who because of the revised “Health and Medical Service Law for the Aged,” are increasingly focused on improving their health and diet.
Imported products benefit from the perception of being advanced and high in quality. It is important for foreign sporting goods and fitness equipment manufacturers to maximize the competitive advantages (quality, value, brand image etc.) of their products when considering selling their goods in Japan. Although the Japanese sporting goods and fitness market was impacted the economic collapse that started in September 2008, some positive signs have begun to emerge. The government of Japan recently reported the country’s GDP increased at a 3.7% annual rate during the first quarter of Fiscal Year 2009 (April – June).
This report provides an overview of the Japanese sporting goods and fitness equipment market and the market for imported products and services therein. A discussion of best prospects, competitors, end-user analysis, possible market entry strategies as well as market access issues, such as custom duties and regulations, are also included in the report.
A key growing demographic in the Japanese sports and fitness market is the women’s market. Golf, running, cycling, 30-minute circuit training, and women’s baseball are just a few of the activities growing in popularity among Japanese females. To meet the growing demand, Japanese suppliers are expanding the number and breadth of products that exclusively target women. Though the market is flooded with cheap goods produced in China and Southeast Asia, Japanese women factor quality, value and the brand’s image more than just the price of the good or service when considering a purchase. Another growing market is what is termed the “serious athlete” in Japan. These athletes train aggressively and are willing to pay top dollar for high quality merchandise.
Japanese middle aged consumers are also a growing market as they are increasingly focused on their health and diet due to the revised “Health and Medical Service Law for the Aged”. This law, which was established in April of 2008, requires Japanese citizens between the ages of 40 and 74 to take an annual health exam that, among other things, tests a person’s body mass index (BMI). The new test was initiated to combat the increasing numbers of “metabolic syndrome” (obesity) in Japan. To ensure they test under the designated obesity scale for their sex and age group, Japanese citizens subject to the BMI test are paying more attention to their health, fitness, and diet.
The Japanese sporting goods and fitness market did not escape the economic woes of the country following the economic collapse that started in September 2008. Year on year sales comparisons are grim, but as of the writing of this report in September of 2009, some positive signs have begun to emerge. The government of Japan recently reported the country’s GDP increased at a 3.7% annual rate during the first quarter of Fiscal Year 2009 (April – June). In addition, the Family Income and Expenditure Survey conducted by the Statistics Bureau of the Ministry of Internal Affairs and Communications, revealed that consumers were spending more money on sports and sports equipment. The survey, which incorporates three years worth of data, reported that the average Japanese household spent 15,048 Yen ($160) on sports; sporting goods, sport-game entry fees and sports facility usage fees during the first six month in 2009. This amount represented an increase of 0.7% over the 2008 data and is noteworthy given how many other aspects of consumer spending declined as a result of the horrible economic conditions over the past year.
1. The Japanese Sporting Goods Market:
Yano Research Institute, a private market research company, conducts a survey on the sporting goods market and its relative size in Japan every year. According to the most recent survey available, Yano estimated the 2008 sporting goods wholesale market was valued at 1,258.1 billion yen. For 2009 Yano expects the market to be flat with the projected size of the market valued at 1,277.4 billion yen. The report did comment on several market segments that had been growing over the past two years namely cycling, cycling apparel and related equipment.
2. Fitness Equipment Market:
Japan’s fitness equipment market has been driven by increasing health consciousness among middle aged Japanese and the wellness trend among women who are increasingly taking up exercise. A primary driver of this has been the rising number of Japanese classified with “metabolic syndrome.” In 2007, this number reached 20 million, accounting for 34.9% of those between ages 40 and 74. Fitness clubs are providing new fitness exercising programs to help meet the demand from this growing demographic.
Fitness equipment can be categorized into two segments in Japan: home fitness equipment and commercial fitness equipment. According to Yano Research Institute, the total fitness equipment market reached its highest level of 54.7 billion yen in 2006. The major factors contributing to this market growth were the big hit of home horse-back riding exercise machines and the rapid increase in the number of newly opened fitness clubs. Beginning in 2006, small fitness clubs that offer 30-minute circuit training, known in Japan as “combini fitness” (“combini” stands for convenience), began opening rapidly and have become popular. Many “combini fitness” clubs target women. The U.S. franchise fitness chain Curves, entered into the “combini fitness” market early and is now a leading fitness chain in this market segment in Japan.
According to Yano Research Institute, the total fitness equipment market is projected to increase slightly in 2010 to 38.2 billion yen; a main driver of this expansion being the replacement of commercial fitness equipment in existing fitness clubs. The total number of fitness club visits jumped to 181 million in 2006, which is a 14.6% increase from 2005. While this rate of expansion has slowed since 2007 to about 4% to 5% annually, corporate membership visits are increasing as fitness clubs provide exercise programs targeted to prevent “metabolic syndrome” among Japanese office workers. In 2008, the fitness club market targeting Japanese 40 years and older reached 312 billion yen ($3.02 billion).
While a mature market, the Japanese fitness equipment market is very competitive and offers opportunities for fitness equipment that caters to specific user needs, such as “metabolic syndrome” prevention and waist slimming/control.
3. Import Market:
The following table details the import of sporting goods and fitness equipment into Japan from 2004 to 2009. The 2009 figures are estimated based on the actual import results reported from the first 6 months of 2009. *Please note that bicycles, athletic apparel, bowling equipment as well as fitness vibration products are not included in the table.
Imports from the U.S: The United States is the second largest foreign supplier of goods to the Japanese sporting goods and fitness equipment markets. Japan imported approximately 23.2 billion yen ($214.5 million) worth of sporting goods and fitness equipment from the United States in 2008. U.S. imports accounted for roughly 9.5% of the import market in 2008, a nearly 9% drop over 2007 data. For the first six months of 2009, imports of sporting goods and fitness equipment from the U.S. plunged to 16.2 billion yen (approximately $170 million), a 35.5% decrease from comparable June 2008 statistics. This was due to the severe recession that gripped the country from September 2008.
The top five product categories imported from the U.S. in 2008 as determined by their harmonized code number were: golf clubs; golf balls; articles and equipment for general physical exercises, gymnastic or athletic; other golf-related articles and other items and miscellaneous sporting goods. (Note: this data reflects the import of product from the United States and does not reflect the tremendous volume of U.S. product shipped to Japan from U.S. manufacturing facilities in Asia).
3rd Country Suppliers: China is the dominant supplier of sporting goods and fitness equipment in Japan and accounted for 60.9% of total sporting goods/fitness equipment imports for 2008. Due to increasing labor costs in China, however, Japanese manufacturers are expanding production bases in other Asian countries such as Vietnam, Thailand and Indonesia. Japan’s signatory to the ASEAN-Japan Comprehensive Economic Partnership Agreement (CEPA) in April 2008 reduced most of the customs duties for sporting goods/fitness equipment and apparel from ASEAN countries. As a result, the import of sporting/fitness goods from other ASEAN countries will likely increase in the coming years, while imports from China moderate. Due to the premium allocated to U.S. and European products, however, industry experts believe that the imports from these two regions will not be adversely impacted by the CEPA. Taiwan is also big supplier of fitness equipment and sporting goods to Japan.
Domestic Production: Although there are no official statistics, Japan, like the United States, has experienced an exodus of domestic sporting goods and fitness products manufacturers over the past 10 years. The remaining domestic Japanese manufacturers are surviving by manufacturing high-end, high-quality, high-technology products.
1. Sporting Goods
Golf: U.S. Companies continue to excel in the sales of golf equipment and related accessories in Japan. Thanks to success of young professional Japanese golfers, the number of Japanese taking up the sport has been increasing in recent years, especially among the younger generation and women. According to industry experts, the sales of golf clubs have been down this year, but the sales of contemporary golf apparel and accessories have held up well.
Athletic underwear: High performance compression underwear has been selling well for the last several years in Japan. A leading manufacturer estimates the market for these products at approximately 10 billion yen ($104.7 million). Although competition is increasing, high performance under/inner wear designed to support specific movements, particular sports, and improve posture have good potential in the market.
Outdoor equipment and apparel: Trekking and climbing equipment continues to sell well in Japan with significant sales reported to Japanese citizens up to age 70. Outdoor apparel, camping equipment and accessories have also been selling well to young families who are increasingly enjoying outdoor camping activities and the new trend of “all-night” music concerts.
Baseball related equipment: Baseball is the most popular team sport in Japan. According to a report titled,” Leisure White Paper 2009”, published by the Japan Productivity Center, 12.6 million people enjoyed playing baseball in Japan in 2008. There are two kinds of baseball played in Japan; regular baseball and what is termed rubber-ball baseball.
Cycling: Road bicycles and crossover type bicycles are becoming more popular in Japan as the number of citizens who enjoy cycling for exercise/leisure and the number of people who commute to work on bicycles increases. Middle-aged and older generation Japanese, concerned about their health, are also riding bikes more often. The market for electric assisted bikes is also increasing rapidly, especially among senior citizens and mothers with young children. Though the market is flooded with cheap product from China and Southeast Asia, high quality, high-performance foreign bicycles are very popular in the Japanese market.
2. Fitness Equipment
Home Fitness Equipment: In General, home fitness equipment has a useful life of two to five years. Due to the limited living space in Japan, compact and foldable equipment is the most popular among Japanese consumers. Highly functional equipment similar to that used in fitness clubs and simple and easy to use equipment is in demand as well. While treadmills and exercise bikes continue to be popular, fitness vibration products and Electric Muscle Stimulators (EMSs) are also selling well. Along with fitness equipment, fitness exercise videos, such as “Billy’s Boot Camp” and exercise games, such as “Wii Fit”, have been big hit items. “Simple and easy to use” is the trend for home fitness products in Japan.
Commercial Fitness Equipment: Commercial fitness equipment generally has a useful life of five to ten years. Highly functional equipment is in demand with measuring and monitoring devices, as well as TV monitors now commonplace on many exercise units. Cardio fitness equipment, such as treadmills and bikes are the most popular commercial fitness machines used in fitness clubs in Japan.
1. Sporting Goods
Golf: Mizuno, Dunlop, Yonex, Callaway, Titlist,
High Performance Underwear: Wacoal, Under Armor, Mizuno, Asics, Descent,
Outdoor: Logos, Coleman, Mont-bell, the North Face, MSR, Black Diamond, Snow Peak, Patagonia
Baseball Equipment: Mizuno, ZETT, SSK, Nike, Addidas
Bicycles: Giant, Trek, Bianchi, Cannondale, Fuji
2. Fitness Equipment
Major Japanese Suppliers: Senoh Corporation, Mizuno, Combi Wellness Corporation, CATEYE Co., Ltd., Toei Light Co., Ltd., Hata Sporting Goods Ind., Ltd.
Senoh Corporation and Combi Wellness Corporation are also major suppliers of commercial fitness equipment.
Major U.S. brands in Japan: Cybex, Star Trac, Gravity (Proavance Corp.), Precor (Amer Sports Japan Inc.), Keiser (Fitness Apollo Japan), Paramount (Japan Tarner Co., Ltd.), Vectra Fitness (Kawai Musical Instruments Mfg. Co., Ltd.), Matrix (Johnson Healthtech Japan Inc.)
1. Sporting Goods
Golf: Japanese women, especially new-to-golf women, are an important growing market in the Japan’s golf industry. These customers are eager to improve their game but also want to look good and have fun. They are fashion-forward and care about their appearance and equipment when playing. Serious male golfers are also important customers to U.S. golf equipment suppliers. Although the sales of golf clubs and golf balls have dropped over the past year, these customers are keen to purchase new clubs in an effort to improve their game.
High Performance Underwear: This growing market began with an emphasis on the “serious athlete” market” and has since expanded to include the sale of high performance undergarments for the mass-market. Products are designed and marketed to not only improve athletic performance, but also to improve areas such as a person’s posture.
Outdoor equipment and apparel: Since the late 1990’s, trekking and climbing have been very popular among senior citizens up to 70 years old. Many Japanese Seniors became interested in trekking after viewing a hit TV show which featured the “100 beautiful mountains in Japan”. Since many of these Seniors are new to trekking, they have been inclined to purchase higher quality, value-added products, especially those that are light weight and easy to use.
Baseball: Baseball is Japan’s most popular sport, with High School baseball the leading segment in this market. 4,132 high schools and roughly169,449 students belonged to the Japan High School Baseball Federation as of May 31, 2009. The federation organizes nationwide tournaments twice a year, with the annual Koshien summer tournament the most famous. High School baseball clubs have extensive budgets to purchase the necessary equipment for the sport.
Cycling: Men between 20 and 50 dominate the high-end cycling market in Japan, though the number of women has been increasing in recent years. Imported products compete well in this market segment in Japan, especially for higher end street and mountain bikes. Newcomers to the sport can generally be classified into two groups, those who ride serious road bicycles because of personal interest and/or friend recommendations and those who ride touring bicycles in town because they think it’s “cool”.
2. Fitness Equipment
Home Fitness Equipment: The major target group of home fitness equipment is young women, ages 20-30 years old. They are conscious about their weight and interested in slimming exercises. That said, the fastest growing segment is middle aged persons taking up fitness to prevent “metabolic syndrome.”
Commercial Fitness Equipment: The new health check-up scheme for metabolic syndrome, introduced in Japan in April 2008, is contributing to the growing popularity of fitness among the middle aged. The number of large fitness club memberships is increasing among those in their 30s, 40s and 60s. 30-minute circuit training at “combini fitness” centers continues to be popular among working women and housewives, given the convenience of a quick workout.
1. Sporting Goods
Product from foreign suppliers usually goes to retailers via an importer and wholesaler. Wholesalers that are active in the sporting goods industry and carry a wide range of products from various manufacturers. This enables smaller retailer to “one stop shop” from these wholesalers. Larger retail chains, however, usually purchase directly from manufacturers.
Possible Market Entry Strategies:
Foreign companies are advised to develop a long-term strategy with respect to the Japanese market and to focus on building strong working relationships with a Japanese partner. Japanese stores are also reluctant to maintain large inventories, so foreign companies should plan accordingly when approaching a potential Japanese customer.
2. Fitness Equipment
Home fitness equipment is sold directly from manufacturers and importers to retailers, and sometimes through distributors. Large retail outlets as well as online and TV shopping programs are the most common place for end-users to purchase fitness equipment. TV shopping programs have become very popular for marketing fitness equipment and products, and they have made several hit products in home fitness, such as the Stepper and the exercise DVD, “Billy’s BootCamp”.
Generally, commercial fitness equipment is distributed directly to fitness clubs from Japanese importers and domestic suppliers. In many cases, equipment is sold directly to fitness club owners and leasing companies who then lease the machines to fitness club franchisees and other establishments.
Possible Market Entry Strategies:
Imported fitness equipment with new functions that match Japanese users’ needs and preferences has good potential in the Japanese market. The common entry strategy for foreign companies is to find an importer who specializes in fitness equipment.
Release date: September 2009