Trade and services in Japan
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Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
's service industries, including trade, are the major contributor to
gross national product The gross national income (GNI), previously known as gross national product (GNP), is the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product (GDP), plus factor incomes earned by foreign ...
(GNP), generating about 74.1 percent of the national totals in 2004. Moreover, services are the fastest growing sector, outperforming manufacturing. The service sector covers many diverse activities.
Wholesale Wholesaling or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional or other professional business users; or to other wholesalers (wholesale businesses) and related subordinated services. In ...
and
retail Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and t ...
trade was dominant, but
advertising Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...
,
data processing Data processing is the collection and manipulation of digital data to produce meaningful information. Data processing is a form of ''information processing'', which is the modification (processing) of information in any manner detectable by an ...
,
publishing Publishing is the activity of making information, literature, music, software and other content available to the public for sale or for free. Traditionally, the term refers to the creation and distribution of printed works, such as books, newsp ...
,
tourism Tourism is travel for pleasure or business; also the theory and practice of touring (disambiguation), touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tour (disambiguation), tours. Th ...
, leisure industries,
entertainment Entertainment is a form of activity that holds the attention and interest of an audience or gives pleasure and delight. It can be an idea or a task, but is more likely to be one of the activities or events that have developed over thousa ...
, and other industries grew rapidly in the 1980s. Most service industries were small and labor-intensive but became more technologically sophisticated as computer and electronic products were incorporated by management.


Wholesale and retail

The trade operations of wholesalers and retailers has often been denigrated by other nations as a barrier to trade, as well as being called antiquated and inefficient. Small retailers and " mom and pop" stores predominated- -in 1985 there were 1.6 million retail outlets in Japan, slightly more than the total number of retail outlets in the United States (1.5 million in 1982), even though Japan has only half the population of the United States and is smaller in size than California.
Small business Small businesses are types of corporations, partnerships, or sole proprietorships which have fewer employees and/or less annual revenue than a regular-sized business or corporation. Businesses are defined as "small" in terms of being able to ap ...
es are a large voter base of the LDP and had a strong stance in government-business relations. The business situation for non-Japanese companies has improved, though, due to growing experience of foreign firms on the market and more international cooperation in the wake of
globalization Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...
. The Japanese economic crisis of the 1990s helped, too. There were several changes in wholesaling and retailing in the 1980s. Japan's distribution system was becoming more efficient. Retail outlets and wholesale establishments both peaked in number in 1982 and then went down 5.4 percent and 3.7 percent, respectively, in 1985. The main casualties were sole proprietorships, especially mom-and-pop stores and wholesale locations with fewer than ten employees. Almost 96,000 of the 1,036,000 mom-and-pop stores in operation in 1982 were out of business three years later. Government estimates for the late 1980s show additional consolidation in both wholesale and retail sectors including a continued sharp decline in mom-and-pop store operations. A further decline in mom-and-pop stores is expected as a result of the Large-Scale Retail Store Law of 1990, which greatly reduced the power of small retailers to block the establishment of large retail stores. Soaring land prices are another major cause of the decline of mom-and-pop stores, but an even more important reason is the growth of convenience and discount stores. Discount stores are not much bigger than the traditional small shops, but their distribution networks gives them a big pricing edge. As of 2005, large chains dominate nearly every market niche be it consumer electronics (notably
Yodobashi Camera is a major Japanese retail chain specializing in electronics, PCs, cameras and photographic equipment. Yodobashi Camera's sales rank fourth among consumer electronics mass retailers in Japan, after Yamada Denki, Bic Camera and the EDION Gro ...
) or cookies ( Aunt Stellas). In the 1980s, Japanese consumers were discovering the advantages of catalog shopping, which offered not only convenience but also greater selection and lower prices. According to a Nikkei survey, the mail-order business expanded 13 percent between April 1987 and March 1988 alone, to more than US$8.9 billion in annual sales. Specialty chains, particularly those handling men's and women's clothing, shoes, and consumer electronics, were also doing better than the overall industry. Department stores, supermarkets, and superstores (hybrid supermarket-discount stores) and other big retail operations were gaining business at the expense of small retailers, although their progress was quite slow. Between 1980 and 1988, department stores increased their share of total retail sales by only 1 percentage point to 8.4 percent. Supermarkets and superstores increased in market share from 6.5 to 7.3 percent. Between 1980 and 1988, the number of department stores grew from 325 to just 371, and other big self-service stores only increased in number by 62 units between 1984 and 1988. The late 1990s brought a decline of the catalog mail order in favor of
online shopping Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of the r ...
.


Service industries

Among service industries, the restaurant, advertising,
real estate Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more general ...
, hotel and leisure business, and data-processing industries grew rapidly in the 1980s. The fast-food industry has been profitable for both foreign and domestic companies. By 1989 family restaurants and fast-food chains had grown into a US$138 billion business per year. Overall growth declined in the late 1980s because of the sharp rise of rents and a proliferation of restaurants in many areas. The number of hotel and guest rooms grew from 189,654 in 1981 to peak at 342,695 in 1988, and has been falling again since. This fact is based on tertiary sector services.


Advertising

Because much of the sales competition in Japan is of the nonprice variety, advertising is extremely important. Consumers have to see the suitability of products and services for their lifestyles. The intense competition for the domestic market spurs the growth of the world's largest advertising agency, Dentsu, as well as other advertisers. A lot of the advertising effort goes into brand development, as Japanese consumers are very conscious about brand names. Brands are seen as a means of identification and a guarantee for quality. The Japanese consumer market is also one of the fastest in the world, and companies are constantly struggling to come up with new products, which is also an advertisement effort.


References

* {{Country study
Japan
Economy of Japan