Domestic Disruptors: For Some Japanese Companies, Breaking With Custom Offers A Rare Path To Growth

Yoko Sakai and Clarke Moody discuss Japan’s domestic disruptors and the investment opportunities they create.






Key Takeaways

 

  • Despite nearly three decades of low growth in Japan, some domestic businesses have flourished by disrupting their industries and taking market share from competitors. The key to their success: introducing efficiencies into Japan’s tradition-bound industries.
  • ABC-Mart has shaken up Japan’s highly stratified footwear industry by integrating vertically, creating efficiencies that allow it to sell popular shoe brands profitably at a discount. ABC-Mart is now the largest shoe retailer in Japan.
  • MonotaRO, a wholesaler of industrial supplies such as protective glasses, disposable gloves, and dust masks, is challenging the traveling salesman model of wholesaling by introducing online ordering and its inherent pricing transparency. The firm’s lower prices have allowed it to take sales from less-efficient competitors.
  • Are these companies at the vanguard of a new Japanese dynamism, or just outliers? Though the answer is not yet clear, examples like these present investment opportunities—if identified early.

Disclosures

 

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