Private labels in Japan - statistics & facts
Private labels generally refer to products produced by contract manufacturers and sold by the retailer owning the brand. In Japan, private labels are synonymous with self-managed store brands of retailers competing with national brands. The first private labels entered the Japanese retail market at the end of the 1950s, with big retail chain operators following in the decades after. One of the most successful private brands from the early period was Mujirushi Ryohin, owned by Ryohin Keikaku. Better known by the brand name Muji, the no-brand label was introduced as a private brand for supermarket chains under the Seiyu Group umbrella before it became an independent brand with a dedicated store network.
Suppliers to private labels are either company-owned manufacturing divisions, subsidiaries, or contracted manufacturers. Contract manufacturing is particularly prominent in the food manufacturing industry, where more than 60 percent of businesses are involved with private labels in the retail market. Manufacturing used to be outsourced primarily to small- and mid-sized businesses, which resulted in significant quality differences. To improve and stabilize product quality, retailers have increasingly contracted with original equipment manufacturers (OEM) of national brands at the turn of the century.
Development of store brands in Japan
Store brands are the main form of private labels in Japan as leading retail chains developed in-house brands to compete with products of national brands stocked on their shelves. Drivers of the market growth are retailers like supermarkets, convenience stores, and department store operators that offer a broad product range. Convenience store operator Seven & i Holdings distributes over three thousand items under the “Seven Premium” brand in its affiliated stores, which covers household essentials, fresh and processed foods, apparel, and personal care products, among others.Suppliers to private labels are either company-owned manufacturing divisions, subsidiaries, or contracted manufacturers. Contract manufacturing is particularly prominent in the food manufacturing industry, where more than 60 percent of businesses are involved with private labels in the retail market. Manufacturing used to be outsourced primarily to small- and mid-sized businesses, which resulted in significant quality differences. To improve and stabilize product quality, retailers have increasingly contracted with original equipment manufacturers (OEM) of national brands at the turn of the century.
