Critics describe the Japanese distribution system in such unflattering terms as mysterious, archaic, outmoded, old-fashioned, inefficient, and one of the most complicated jigsaw puzzles ever contrived.1 Industrialists and trade negotiators argue that the complex channels represent a major nontariff barrier to entry in Japan and are a key contributor to the U.S. trade deficit.2 Distribution, therefore, remains a key issue in the continuing trade negotiations between the two countries.
But do these claims bear up under close scrutiny? Are they valid in the 1990s? Recently, we have seen some fundamental shifts in the Japanese economy, Japanese management, and consumer life-styles since the collapse of the “bubble economy.” Recent socioeconomic trends in Japan have filtered through its distribution system, resulting in a number of changes.3
In this paper, we examine the unique features of the Japanese distribution system to highlight some of its merits and demerits. Second, we provide an overview of various drivers that are gradually altering the channels for many consumer products and identify five important trends in Japanese distribution.
Features of Japan’s Distribution System
There are four major features of Japanese distribution systems for consumer products: (1) the size and number of retailers, (2) the length of distribution channels, (3) manufacturers’ domination of many channels, and (4) symbiotic relationships.4 We review each to demonstrate... To read the complete article, login or sign-up using the form below.
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