What is the Japan market-size (TAM) for the Retail industry?

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What is the Japan market-size (TAM) for the Retail industry?

Hello! Thanks for your question about the Japanese market size (TAM) for the retail industry. The short version is that the Japanese market size for the retail industry was 69,380 billion JPY in 2015. The Japanese retail space is divided into 65% food, 18% general merchandise, and 16% fabrics/apparel/accessories. In 2015, the total retail space in Japan was 215,174,918 sq ft. In 2016, this number went down to 214,750,316 sq ft, and in 2016, the total retail space in Japan was 214,276,859 sq ft. Below you will find a deep dive of my research and methodology.

METHODOLOGY

I looked for information in statistics websites of the Japanese government, CBRE--the foremost, well-known authority in publishing reports about retail spaces of various countries around the world--websites like NRI, reports by Savills Asia, and Xymax. I also searched through various media articles and reports to look for the required information. After searching through all these websites, I have come to conclude that the segmentation of total retail space in Japan is not available.

JAPAN MARKET SIZE FOR THE RETAIL INDUSTRY

While I could not find a direct answer to your question, I was able to gather some information about this topic, which I think will be helpful for your project. According to data from the USDA, in 2015, Japan had 69,380 billion JPY in retail sales (the equivalent of 612.55 billion U.S. dollars).

Of this amount, 45,311 billion JPY (400.05 billion U.S. dollars) came from food; 12,798 billion JPY (113.0 billion U.S. dollars) came from general merchandise; and 11,271 billion JPY (99.51 billion U.S. dollars) came from fabrics, apparel, and accessories. In other words, the Japanese retail space is divided into 65% food, 18% general merchandise, and 16% fabrics/apparel/accessories.

Retail Sales YoY in Japan are estimated to stand at 2.09% for the next 12 months. According to Trading Economics' econometric model, the Japan Retail Sales YoY will remain at around 0.90 percent in 2020.

SIZE OF RETAIL STORES IN JAPAN

In Japan, the number of locations for large stores has been decreasing. In recent years, the average area of large stores was 2,098 square meters, and there were 569 stores. When it comes to shopping centers, the total floor area for all stores and the floor area per store are increasing. Rent levels in Omotesando, Ginza, and Shinjuku are very high compared to other areas. Since 2011, capitalization rates have been falling, and in Tokyo they have hit a record low.

According to a 2017 report by Savills, 1/F rents in Tokyo increased after consecutive periods of softness. In Ginza 1/F rents remained the highest in the city, and Omotesando rose to the second place over Shinjuku. The retail market has undergone some changes. Sales figures for drugstores surpassed those of department stores for the first time on record, which highlights changes in consumer spending patterns. Great demand in labour is slowly and slightly pushing wages up. Also, due to a lack of opportunity, investment volumes decreased significantly in 2016. Demand for prime retail assets is reducing capitalization rates in select areas, but developers are still looking for opportunities in strategic locations, and they have multiple major projects planned in Tokyo and Japan.

According to an article by CNBC, the United States on average has 7.3 square feet of retail space per person, France and Japan have 1.7 square feet, and the U.K. has 1.3 square feet. We will use the figure from Japan to estimate the total retail space of stores in that country. The population of Japan has been decreasing since 2015. In that year the Japanese population was 126,573,481. In 2016, this number decreased to 126,323,715, and in 2017, the Japanese population was 126,045,211. From the information on CNBC, we can calculate the total retail space in Japan for 2015, 2016, and 2017.

126,573,481 x 1.7 sq ft = 215,174,918 sq ft
126,323,715 x 1.7 sq ft = 214,750,316 sq ft
126,045,211 x 1.7 sq ft = 214,276,859 sq ft

In 2015, the total retail space in Japan was 215,174,918 sq ft. In 2016, this number went down to 214,750,316 sq ft, and in 2016, the total retail space in Japan was 214,276,859 sq ft.

In addition to this estimate, Xymax collaborative research says that in 2013, Japan's large retail properties offered 86 sq km of retail floor area. This is 1.3 times the size of Tokyo's Yamanote line or Manhattan Island. Goods accounted for 78.1% (67,771,085 Sq m) of the area. Services were 17.1% or 14,758,989 Sq m. Restaurants were 4.2% or 3,606,656 Sq m.

CONCLUSION

To wrap it up, after searching extensively through statistics websites of the Japanese government, CBRE--the foremost, well-known authority in publishing reports about retail spaces of various countries around the world--websites like NRI, reports by Savills Asia, and Xymax, I've determined that the segmentation of total retail space in Japan is not publicly available. However, I was able to learn about retail space segmentation for large retail stores and about the Japanese market size for the retail industry. Also, I was able to calculate an estimate of the total retail space in Japan in 2015, 2016, and 2017. Thanks for using Wonder!

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