While the retail industry is receiving a blast of consumption tax increases, a steady growth is continuing in the sale of second-hand brand goods. Listed on the Tokyo Stock Exchange (TSE) Second Division was Komehyo, a business that handles second-hand brand items. In March of 2016, the accounts of the 3rd quarter (April-December 2015) reported that sales were at 33,918 million yen, which, compared with the same period last year is a 106.6% increase in revenue. This company is pushing to open a new store as soon as possible.
Supporting that growth curve is the demand from the inbound market of foreign tourists visiting Japan. Around 15% of Komehyo’s sales are accounted for by inbound travelers, especially the sales from Chinese tourists who make up half of those travelers, which compared to this time in the previous year, show a 122.2% growth.
It is understandable why there might be shopping sprees for new brand-name items, but why would foreign tourists want to spend their money freely on second-hand brand items? To solve this riddle, we visited Mr. Daisuke Motojima who works as an expert for brand item auctioning company SMAOKU.
When did second-hand Japanese name-brand goods become popular?
Motojima: The market has probably expanded at once because of the internet becoming common. And, actually, overseas there aren’t many “second-hand goods” and they aren’t as popular as they are in Japan.
The fact that second-hand Japanese goods are being bought largely by foreign tourists means that the quality is being recognized. While it is said that the Japanese are “the strictest in the world with quality”, as a result of carefully handling things and strict regulations, there are not many imitation goods.
Similarly to the words “made in Japan”, we have recently started asking for the words “checked in Japan” which have the meaning of being appraised in Japan. This indicates that second-hand brand products in Japan are gaining popularity because of their wide circulation and high quality.
Why is there a wide circulation of high-quality name-brand goods in Japan?
Motojima: Regarding the consumption of original Japanese brand name goods, there is something of an abnormality compared to the West.
In Japan, including high school students, most people have worn some sort of name-brand item, however in the West, it is restricted to a small portion of the wealthy. For that reason, brand-name products are starting to be equally available in any area of Japan. Overseas, most brand-name items are only available to be purchased in large cities.
The second-hand name-brand market exists in Japan because the Japanese are familiar with brand items and their high quality. It seems only Japan has this many second-hand shops.
How are products purchased, and after that, what is the flow of how those products are sold again in shops as second-hand?
Motojima: Depending on purchases collected from major company stores, second-hand goods are wholesaled at auctions throughout the country and frequently appear in second-hand shops. Differently from new items, the supply of second-hand goods is not stable, therefore, the unnecessary stock from major companies is mostly procured in the [second-hand] market. Also at those auctions, approximately 50 types of industries are participating in that market, and authorization as a second-hand dealer is necessary for entry.
The second-hand name-brand items market consists of consumers who purchase new items, and the major second-hand shops who purchase those goods used, those small to medium shops which buy that inventory, and the consumers who buy the second-hand goods. In this way, the market is able to mature, however, except for situations when extremely cheap goods do not appear, [most people] don’t end up buying fakes. Imitation items are scarce because if second-hand shops in Japan buy fakes, their business will be suspended.
With the speed of China’s economic growth slowing down, it will be difficult to make accurate predictions hereafter, however, as the government’s aim of “20 million foreign tourists visiting Japan in 2015” seems achievable, there is a powerful inbound market demand. And now, with the “safe second-hand name-brand goods market” brought about by the Japanese, the strictest checkers of quality in the world, it is no mistake that Japan holds the key to becoming a major power of shopping tourism through its second-hand brand goods.
SMAOKU – No.1 Live Auction from Japan, Guaranteed Authentic Items
**The site seems to be permanently closed as of 2019 April