Japan is the world’s third largest jewelry market after the United States and China, with an estimated $9.1 billion retail market for costume/fashion jewelry in 2008, a 7.3 percent decrease from the previous year. The market had grown steadily from 1997 until 2006, but declined by 3 percent in 2007 due to the economic downturn. The key demographic for costume/fashion jewelry is female consumers, with strong preference for silver jewelry among male and young female consumers. The current Japanese jewelry market is diversified with a range of pricing and fashion options.
The Japanese jewelry market is highlighted by its diversity. One can find low-priced products which dominate impulse purchases. At the other end are high-priced brand-name products. Both differ tremendously in their distribution structure and consumer purchasing patterns. The market offers affordable precious metal jewelry products in silver or in low-karat (10 an 14K) gold as well as costume/fashion jewelry in various materials from titanium or stainless steel to plastic with semi-precious stones or crystals. Given this diversity, the distinction between costume jewelry and authentic traditional jewelry is less clear, as there is a broad variation of materials and designs available in the market.
Recent difficult economic conditions have had a strong impact on consumer spending and consumption patterns. Not unexpectedly, many Japanese consumers have introduced costume jewelry/fashion jewelry into their fashion repertoires. While women in their 30s and 40s tend to look more favorably upon imported and prestigious brands, young consumers in their 20s focus more on fashion trends and choose products for their unique and distinctive designs rather than brand name. Additionally, these younger buyers use jewelry as a decorative accessory to add fashionable accents to their workday attire. While there is no single trend, consumers have developed a wider range of preferences than has been evident in the past.
Many of the established fashion brand retailers in the market, such as H&M, UNIQLO, Forever21, and Zara, have begun to carry costume jewelry/fashion accessory items at their stores. Major domestic jewelry manufacturers with retail outlets have also successfully started marketing their brand products through their stores in popular shopping complexes, attracting many consumers. There are few upper lines of costume/fashion jewelry called, luxury costume jewelry, targeting middle age female consumers with higher incomes with retail price ranges similar to prestigious brand jewelry.
There are an increasing number of jewelry/fashion accessory products available in direct selling channels such as catalog, on-line, and TV shopping. While a wide variety of precious metal and non-precious metal jewelry is available in this channel, the price range as well as quality and design might vary by company and sales channel from catalog to internet. Amazon has begun selling jewelry products, and Jwell.com is also a major player carrying a wide variety of fashion jewelry/costume jewelry. Consumers are starting to use different resources to collect information on products.
Japan is the world’s third largest jewelry market after the United States and China. The costume/fashion jewelry market was estimated at about $9.1 billion in 2008 (Yano Research Institutes), a 7.3 percent decrease from the previous year. The market had grown steadily from 1997 until 2006 with the increased popularity and affordability of costume/fashion jewelry products, but declined by 3 percent in 2007 due to the economic downturn. The market is estimated to decline by another 4-5 percent in 2009 as low-priced imports put downward pressure on prices.
The Industry Census of Manufacturers by the Ministry of Economy, Trade and Industry (METI) reports that Japanproduced costume jewelry/accessory products and parts totaled about 35.1 billion yen (approximately $297.5 million at 118 yen/1US$) in 2007 with a 0.25 percent recovery from the previous year. The challenge for domestic manufacturers has been to maintain or reduce the retail price of their products in the last few years given the higher price of raw materials and higher price competition. They started selling lower-karat precious metal jewelry products, such as 10 or 14-karat gold, to target younger consumer groups, even though 18-karat precious metal had been the Japanese standard for decades. Lower karats are coming to be accepted by younger consumers due to their affordability.
Many Japanese jewelry manufacturers have also been entering international markets to promote their products.
Exports of imitation jewelry classified under HS7117 by the Japan Tariff Association was about 628.8 million yen (approx., $6.1 million at 108 yen/1US$) in 2008. The U.S. is the largest importer of Japanese imitation jewelry with a 38 percent share.
Jewelry products, especially affordable costume/fashion jewelry products for daily use, are influenced by recent fashion trends as they are seen as important to both male and female fashion. Consumer preferences differ by age, lifestyle preference and fashion; there is no single trend. Best prospects will include:
- Fashionable jewelry successfully representing new fashion trends and good brand image
- Lucky charm accessories using natural design motifs (such as flowers, leaves, etc.)
- Fancy decorative stone settings: e.g., colorful semi-precious stones, crystals, or other materials
- Pink gold jewelry for young female consumers
Retail: Vandome Yamada, A&S Inc., Excel, Star Jewelry, The Kiss, H.P. France, FDC Products, Abiste, etc. Direct selling: JWell.com, Jupiter Shop Channel, QVC Japan, Senshukai
Female consumers are the key demographic for costume/fashion jewelry. Silver has been popular among male and young female consumers.
According to a consumer survey by a 2009 Yano Research Institute, the average Japanese female consumer owns 13.3 jewelry pieces, including 4.9 different brands. Women in their 40s show the highest possession of 14.6 jewelry items and with 5.2 different brands. Married woman have more jewelry than their single counterparts.
According to the 2008 Family Income and Expenditure Survey by the Statistics Bureau of the Ministry of Internal Affairs and Communications, households with higher incomes had the largest expenditure on decorative accessories, including jewelry. However, those with incomes over $75,146 saw the largest decrease in spending, a 31.7 percent drop from the previous year. Conversely, those with medium income groups had shown some increase in their average spending on such accessories, and for the group with incomes from $53,010 to $75,146 increased spending as much as 52 percent. Those with incomes from $38,155 to $53,010 increased spending by 35 percent.
User Preference by Age-group
Younger women under 20 are primarily impulse purchasers, targeting low cost imitation jewelry items with fashion trends, but also showing a preference for affordable fashion brand-name silver or in low-karat gold jewelry. This age group is a big user of on-line shopping sites via PCs or mobile phones.
Women consumers from 30 to 40 grew up in a bubble economy and tend to look more favorably on imported and prestigious brands, but they have also begun to accept more affordable fashion items reflecting the current economy. This age group uses catalogs and internet shopping channels to look for products.
Women in their 50s have a strong preference for traditional authentic jewelry and buy at jewelry shops, but are also frequent buyers from TV shopping channels.
For male consumers, silver jewelry has been popular for young consumers since the 1980s. When the popular fashion trend called “Amekaji”, meaning American style casual fashion, took root among male consumers in their teens and twenties in the 1980s, silver jewelry was often worn as a trendy fashion accessory. As a result, many fashionable silver jewelry brands entered the market such as Chrome Hearts. The Amekaji generation has moved into their 30s and 40s. Male consumers continue to be potential end-users for fashionable silver jewelry.
Jewelry distribution channels are often highly segmented and differentiated by the type of product, such as whether they are finished jewelry products or raw materials, and pricing category. The Japanese distribution system is typically multi-layered, with importers, distributors, as well as regional wholesalers, bringing finished jewelry products to the retail channel. This has been changing with an increasing number of direct purchases, i.e., without the middleman, to lower the retail price.
Small and medium-sized companies (retailers or wholesalers), including many individually or family-owned retailers, have an overwhelming share of the market; no single retailer or wholesaler dominates. Recently, there have been more consignment sales among retailers, making business for the distributors and wholesalers in the market more difficult to manage financially.
Many retailers do not handle imports directly and do not stock quantities of inventory. Foreigncompanies seeking representation in the market may want to locate an appropriate importer or specialized distributor who has a targeted sales channel. In many cases, distributors often seek “exclusive rights” to compensate for the risks they take in bringing a product to market. It might be difficult to find a distributor interested in taking on a jewelry brand if the products are already generally available online or on TV shopping channels. Direct selling channels like catalogs, the internet, and TV shopping channels have been an increasing opportunity in jewelry in the last several years.
For new market entry, it is important to carefully determine which sales channels would be appropriate to effectively promote your products by their brand recognition, design, material, and price range in order to reach out to targeted end users. Brands established through TV shopping channels do not appear in retail channels.
Japanese consumers expect high quality workmanship as a general rule. This is true even of the small details, such as stone settings, and even for low priced products.
Much costume/fashion jewelry has a short lifecycle as fashion trends change from season to season. It is also important to realize that new products are supplied to retailers. It has been challenging for many wholesalers to reduce dead-stock products left from previous seasons, as there are now more consignment base sales in the market. Timely supply to and good communication with the importer/retailer is very important.
Release date: December 2009