<figure id="attachment_307980" class="wp-caption alignnone" style="width: 2491px;" aria-describedby="caption-attachment-307980"><a href="#" data-ident_hash="c60958b0"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2023/04/KIN_0088.jpg" alt=""></a><figcaption id="caption-attachment-307980" class="wp-caption-text">Yamada and BIC stand side by side at the east exit of Ikebukuro, facing each other. If Yodobashi were to join Seibu, it would truly be a &#8220;three-way street.</figcaption></figure>
<p>Akihabara (Chiyoda-ku, Tokyo) is known as the &#8220;town of consumer electronics,&#8221; but that has changed. The center of the electronics retail store industry, with a market size of over 7 trillion yen, is Ikebukuro (Toshima Ward).</p>
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<p>At the east exit of Ikebukuro are the flagship stores and affiliated stores of Yamada Denki, the &#8220;absolute champion&#8221; and the only electronics retail store chain with sales exceeding 1 trillion yen, and Bic Camera, whose headquarters are located in Toshima Ward. In addition to Bic Camera, there is also a &#8220;Nojima&#8221; store in the Tobu Department Store at the West Exit. Walking through Ikebukuro&#8217;s electronics district, one can see that customers who want to examine home electronics are hustling from one store to another. Chinese tourists hanging out in the cosmetics section and people lining up to buy Pokemon cards, which have become a hot topic due to their high resale value, were also noticeable.</p>
<p>Yamada has been expanding its market share through a &#8220;roadside strategy&#8221; targeting suburban customers. On the other hand, in recent years, the company has been focusing on a &#8220;railside strategy&#8221; centered on its &#8220;LABI&#8221; stores in urban centers, and the Japan head office in Ikebukuro is the first of these. The Ikebukuro Japan headquarters is the first of its kind,&#8221; says a former store employee.</p>
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<p><strong> LABI is a &#8220;dollar box,&#8221; with one store sometimes selling 100 million yen a day, and LABI offers lower prices than stores in the suburbs, so price competition is fierce. LABI offers lower prices than suburban stores, and price competition with other companies is fierce.</strong></p>
<div data-friday-nextpage-lead="New Players Enter the Market"></div>
<p>A new player is about to enter the overcrowded ″Shin-Electric Town″ as shown in the map below. Yodobashi HD has acquired the real estate of Seibu Ikebukuro and may open a &#8220;Yodobashi Camera&#8221; store there.</p>
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<p><strong> Seven &amp; i Holdings, the parent company of Sogo &amp; Seibu, has been restructuring its department store business, but it has reached an impasse. A plan has been proposed by a U.S. real estate investment fund, in cooperation with Yodobashi HD, to renovate the store. As early as next year, there are plans to open a Yodobashi Camera across seven floors of Seibu Ikebukuro,&#8221; said a desk clerk at a national newspaper&#8217;s economics department.</strong></p>
<p>If Yodobashi moves into Seibu, there is a possibility that luxury brands such as Louis Vuitton and Hermes, which are on the ground floor of the building, will withdraw from the building. There was also criticism of the plan to &#8220;take over&#8221; the department store.</p>
<p><strong> Former Toshima Ward Mayor Yukio Takano, 85, who passed away in February of this year, was consistently opposed to Yodobashi going into the lower floors of Seibu. He believed that an electronics retail chain, rather than a brand-name store, in the most prominent location at the east exit could destroy the cityscape,&#8221; said Hiroo Ogawa, a journalist familiar with urban planning.</strong></p>
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<p>Yodobashi is aware of the criticism and plans to expand into Ikebukuro. What is the reason for opening a store in an area with a high concentration of consumer electronics chains? Keishi Hosodate, editor-in-chief of &#8220;BCN+R&#8221; and an expert on the consumer electronics market, asks.</p>
<p><strong> I think they are hoping for the overwhelming customer appeal of a terminal station. Seeing the number of customers at the electronics retail stores in Ikebukuro, it can be said that demand has not yet saturated the market. Yodobashi, with its expertise in the railside strategy, may have the math to win even if it has to launch later.</strong></p>
<p>In fact, when Yodobashi, the third largest retailer in the industry, enters the Ikebukuro market, the power structure will change dramatically. Retail and distribution analyst Akihito Nakai says, &#8220;Ikebukuro is a major shopping center for Yodobashi.</p>
<p><strong> Yodobashi could win hands down in Ikebukuro. In 2010, Yodobashi bought the Kintetsu Department Store in Kyoto and turned it into a commercial facility. The reason was that Yodobashi&#8217;s convenience surpassed that of other stores, with &#8220;Nitori&#8221; and &#8220;Uniqlo&#8221; coexisting with the department store. The combination of Seibu, which is directly connected to the station, and Seibu Shibuya, which will be acquired at the same time, is expected to increase sales by hundreds of billions of yen. We can expect sales to reach the 1 trillion yen level.</strong></p>
<p>Yodobashi&#8217;s mail-order service offers free shipping from a single light bulb, and with &#8220;Yodobashi Extreme,&#8221; which is available only in urban areas, items can be delivered as soon as the same day as the order is placed. The convenience of Yodobashi&#8217;s mail-order service is superior to that of Amazon&#8217;s.</p>
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<div data-friday-nextpage-lead="The Day Yamada Falls to the Top"></div>
<h2>The Day Yamada Falls to the Top</h2>
<p>What about BIC, which wants to prevent Yodobashi from overtaking it at all costs?</p>
<p><strong> BIC is focusing on the purchase and repair of used home appliances, based on the idea that the market will shift from the concept of buying one item after another to repairing and reusing products in an environmentally friendly manner. However, there are many specialized companies in this field, and it is unlikely to become a large market,&#8221; said Kazuyuki Suzuki, a stock analyst.</strong></p>
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<p>Rather, what seems promising is the resurgence of inbound sales. A person in the consumer electronics industry with knowledge of the Chinese situation said, &#8220;Chinese tourists are very interested in Big Sight.</p>
<p><strong> A person in the home electronics industry with knowledge of the Chinese market says, &#8220;BIC is overwhelmingly popular among Chinese tourists. Recently, many tourists don&#8217;t buy home appliances, but cosmetics and medicines, and BIC has a full lineup of such products. Another secret to BIC&#8217;s popularity is the large number of knowledgeable Chinese shoppers.&#8221;</strong></p>
<p>While the two companies are finding upside, Yamada, which is being chased, is likely to continue to face a difficult situation. Distribution analyst Hiroaki Watanabe says, &#8220;Yamada is a manufacturer in a deflationary environment.</p>
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<p><strong> Yamada has been able to increase sales by suppressing purchase prices and selling at low prices through competition among manufacturers in the face of deflation, but I sense that this model has reached its limits. With the population shrinking and the shift away from cars accelerating, fewer and fewer people should be visiting roadside stores.&#8221;</strong></p>
<p>Closest to Yodobashi and BIC in terms of sales is K&#8217;s Denki, the fourth largest retailer in the industry. In the 1990s, when the number of home electronics retail stores increased rapidly, Yamada (Takasaki City, Gunma), Kojima (Utsunomiya City, Tochigi), and K&#8217;s (Mito City, Ibaraki) fought for supremacy in the northern Kanto region in what was known as the &#8220;YKK War. Along with Yamada, K&#8217;s Denki has maintained a firm share of the market.</p>
<p>K&#8217;s Denki operates at its own pace, pursuing a thoroughgoing roadside strategy and daring not to open stores in urban centers such as Ikebukuro. If the competition among the top four retailers for market share is called the &#8220;YBYK war,&#8221; what about the &#8220;K&#8221; strategy of going against the grain? Mr. Nakai, the aforementioned &#8220;K&#8221;, says, &#8220;K&#8217;s Denki is a huge company.</p>
<p><strong> K&#8217;s Denki is a chain that has grown by opening stores in or near huge commercial facilities to increase the flow of people, but there are concerns about its future growth. One is that there is less and less room to open stores in favorable suburban locations. This is because other industries, such as apparel and restaurants, are also focusing on roadside strategies. Another is the use of &#8220;cash discounts&#8221; rather than points. BIC and Yodobashi have a strategy of accumulating points in stores and having customers spend them on e-commerce (mail order), but cash discounts do not allow for this.</strong></p>
<p>Best Denki,&#8221; which once boasted the top sales position, was merged into Yamada, and Kojima, which had jumped to the top in 1997, was acquired by BIC in 2012. In an industry that is in a state of rapid rise and fall, there is a possibility that Yamada will fall from the top.</p>
<p>As a former Yamada employee noted above, stores in central Tokyo are cheaper due to the price-cutting competition and are located near train stations, making them easy to stop by on the way home from work. The stores&#8217; intention is to increase the inflow of customers by encouraging them to compare their prices with those of other stores. The points granted to customers can be used to make purchases on the e-commerce site, thus retaining them in the store. The win-win relationship between the two sides is the reason why a &#8220;fierce battleground for consumer electronics&#8221; like Ikebukuro was created.</p>
<p>Meanwhile, Nojima is developing a strategy of &#8220;squeaking by&#8221; in the fierce battleground of Ikebukuro.</p>
<p><strong> Nojima excels at small-scale development, such as on a single floor of a commercial building. Nojima is a small retailer that focuses on customer service and after-sales maintenance, and has discovered needs different from those of other retailers. I believe that Nojima will secure a position as an updated version of the &#8216;electronics store on the street,&#8217; which has become rare in recent years.</strong></p>
<p>Sooner or later, the power structure of the consumer electronics chains will completely change. The epicenter of this change will be Ikebukuro.</p>
<figure id="attachment_307984" class="wp-caption alignnone" style="width: 2500px;" aria-describedby="caption-attachment-307984"><a href="#" data-ident_hash="fb726137"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2023/04/c0278d5ca885155b9e322de7f126c8e7.jpg" alt=""></a><figcaption id="caption-attachment-307984" class="wp-caption-text">Nojima is moving into the Ikebukuro Tobu Building. Nojima is increasingly opening stores in Ito-Yokado and other commercial facilities.</figcaption></figure>
<figure id="attachment_307983" class="wp-caption alignnone" style="width: 2500px;" aria-describedby="caption-attachment-307983"><a href="#" data-ident_hash="dedb8671"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2023/04/0d0ad4e08c13c4683791e7504bfd5e6d.jpg" alt=""></a><figcaption id="caption-attachment-307983" class="wp-caption-text">Customers in the electronics district often stop before they reach their desired corner. Measures to promote the desire to buy will be key.</figcaption></figure>
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<p>From the May 5, 2023 issue of FRIDAY</p>


 Takeshi Kinugawa

 Ikebukuro is the center of the electronics retail store industry, with a market size of over 7 trillion yen. A new player is about to enter this overcrowded electronics district! What is the reason for daring to open a store in an area with a high concentration of home appliance chains...

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