Japan Retail Sector "Consumer electronics sector: competitive conditions..."

Research evidence excerpt

Japan Retail Sector "Consumer electronics sector: competitive conditions..."

ting to terrestrial digital broadcasting

created an artificial wave of demand for televisions, significantly impacting earnings

trends in the consumer electronics retail industry. According to JEITA, domestic television

shipments increased from 9.89mn units in 2008 to 13.66mn units in 2009 and further to

25.19mn units in 2010, before declining to 19.83mn units in 2011 and dropping sharply

to 6.45mn units in 2012.

Earnings at the major electronics retailers fluctuated significantly as a result. We believe

the 2012 acquisition of Kojima by Bic Camera and the acquisition of Best Denki by

Yamada Holdings was in part due to a further deterioration in earnings at Kojima and

Best Denki, which lost their competitive advantage due to changes in location

regulations, as a result of the sharp decline in demand for televisions. Additionally, the

government revised the distribution and transaction practices guidelines in 2017. As a

result, price competition in the consumer electronics retail industry, particularly in

internet sales, calmed, and the ongoing stabilisation of the price-driven competitive

environment across the industry.

The history of Edion and Yamada Holdings

Edion was established in 2002 through the management integration of Deodeo,

headquartered in Hiroshima Prefecture, and Eiden, headquartered in Aichi Prefecture. In

2005, the company acquired Midori Denka and Ishimaru Denki, followed by Sankyu in

2007. Chairman of the Board, Masataka Kubo, previously served as President of

Deodeo. The predecessor of Deodeo was Daiichi Sangyo, founded in 1947, and

Masataka Kubo is the son of the Daiichi Sangyo founder. Figure 4 summarizes the