TOKYO, Japan - After two years of intense rumours and breathless anticipation, Swedish fast fashion giant H&M finally opened its first Tokyo store on September 13 in the ritzy neighborhood of Ginza, right down the street from competitors Zara and Uniqlo. When the staff cut the ribbon at 11 a.m., somewhere between 3,000 and 5,000 Japanese customers (mostly young women) waited in line for their chance to visit the 1,000 square-metre, four-story retail space. Now, twelve days later, the lines continue to stay long, with around 8,000 people visiting the store daily.
An incredible success? Although these long lines may help pay back the reported ¥2 billion launch expenditures, a little perspective is required to know what it all means.
Tokyo's retail culture is all about lines. Famed donut purveyor Krispy Kreme opened over a year ago, and you still have to wait at least 20 minutes to buy a dozen glazed. There may be a cultural element to the obedient queuing, but the environmental conditions are mostly to blame. The Tokyo-Yokohama area alone is home to 20 million people, and there are at least 40 million in the greater Kanto area. All of these people conceivably come to Tokyo neighbourhoods like Ginza and Harajuku on the weekends to shop. This kind of population congestion means that H&M could achieve these amazing crowds with only a 28% recognition rate amongst Tokyo-area women in their 20s and 30s.
Also, Japan's mass media have a pack mentality and are always obsessed with the latest retail novelty. While H&M did a good job messaging to a wide selection of Japanese magazines and different taste cultures, the wall-to-wall TV coverage worked to spread the word to more mainstream shoppers. The result was a lot of people out on the street at the right time on Saturday morning, which then created an even better media narrative and brought more people out the next week.
While these long lines tend to stun the foreign press, they actually have little predicting power of bona-fide long-term success. There is a common pattern: a hot brand is packed for months; the brand finally opens more stores; the exclusivity goes away; customers move on to the mass media's new favorite donut shop or fast fashion brand.
There is no doubt that H&M's version of "fast fashion" is definitely new to Japan. But, the fashion market here is already so diverse and multi-tiered that it may be like trying to impress calculus students with algebra. Japanese consumers already love a wide range of inexpensive domestic lines that adapt foreign trends to distinct Japanese sub-cultural tastes.
A lot of Japanese critics have stubbornly assumed that H&M will ultimately fail to meet the "high quality demands" of Japanese customers, but H&M is probably no different than the aforementioned domestic labels on this front.
In the end, H&M's greatest advantage may be its incredibly low prices. Most foreign brands come to Japan and charge more than at home. For example, The Gap in Tokyo is about twice as expensive as it is in the USA. H&M bravely has gone the other direction, aiming to match global pricing. So now H&M is one-half the price of Zara in Japan, thereby making most other Japanese retailers look relatively expensive. If Japanese consumer spending continues to decline, this will play into an even stronger position for H&M.
H&M's next store will hit the youth district of Harajuku in November. The Ginza location was perhaps too "elegant," so this should be a better test for the brand to forge a connection with Japan's critical youth market. The Harajuku opening will correspond with the release of the special Rei Kawakubo collaboration line, sure to bring in a rush of leading-edge consumers.
W. David Marx is a Contributing Editor of The Business of Fashion and Chief Editor of MEKAS. This article is an extract of a more in-depth article on the H&M opening which can be found at MEKAS. Photo by Sean Wood.