How to make Japan retail market entry a success? 4 key success factors for profitable and sustainable retail expansion FUKUTOKUSHA K.K.

#1 Create “Magic” with the 1 st Store Locate the brand’s 1 st store in TOKYO in prime location e.g. Ginza or Shinjuku, facing the street  For the brand to spread word-of-mouth across Japan and rise awareness most efficiently Such a location requires high rent, so the store must make super-high sales from super-high customer transaction, therefore… (continue to next slide)

#1 Create “Magic” with the 1 st Store PR the brand through Japanese media BEFORE 1 st store opens to give brand a highly fashionable image  Make Japanese consumers feel hunger for the brand and have them eagerly wait for the brand  Then, consumers will line up in “Gyouretsu” Make sure cameras will wait for 1 st store opening and the photos will be disseminated across media

#2 Build Bond with “Developers” Almost all shopping complexes in Japan are built by major “Developers” e.g. AEON or railway companies  Building good relationship with “Developers” is a must to achieve successful store expansion If a brand succeed in achieving profitability with the store in prime location, shopping center tenancy offers will be awarded by “Developers” to the brand But don’t rush; hierarchy exists among “Developers”— prioritize business with higher hierarchy “Developers”

#3 Be Prepared for the Fast Expansion Every successful retail company experiences fast market expansion stage  When the time comes, flood of new store opening opportunities come all at once Securing human resources and finance become very critical at that stage  Build relationship with labor market and finance market before the fast expansion stage starts, in order not to miss the chance for growth

#4 Be Prepared with New Store Concepts When a brand grows and penetrates in Japan market, new store concepts become necessary to grow further for two reasons; 1.“Developers” start requesting new “news” as a tenancy condition to revive media attention 2.“Small” size store type become necessary to secure real estate location for further expansion  Small physical store size  Small sales but profitable

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