Korean Companies Withdrawing from Japanese Market due to Weak Yen

Korean companies in Japan are returning to Korea or scaling down their business due to the ongoing weak yen. Meanwhile, more and more Japanese companies are rushing into the Korean market based on the depreciation of the yen. 

E-Land, for example, shut down its SPAO men’s wear shop in the Lalaport Yokohama shopping mall on March 1. At present, E-Land has no shops at all in Japan. The company entered the Japanese market in 2013 and ran two Mixxo ladies’ wear shops along with three SPAO shops at local department stores and shopping malls. The company said that it would focus on the Chinese market, opening at least 30 brand shops in China this year, instead of struggling with the weak yen-based low profitability. 

Amore Pacific, which started its cosmetics business in Japan in 2006, withdrew from the market last year. It used to run eight shops in local department stores, but its sales in Japan decreased from 47.6 billion won (US$42.8 million) to 45.7 billion won (US$41.1 million) between 2012 and 2013, with an operating loss of 3.9 billion won (US$3.5 million). The annual sales of Able C&C, well known for its cosmetics brand Missha, fell about 20 percent in Japan last year, too.

In contrast, the Shinsegae Group launched the No. 21, the private shoe brand of Japanese department store Isetan Mitsukoshi, in Korea last month. Also, individual shoppers in Korea are turning their eyes toward Japanese shopping malls to take advantage of the weak yen. According to international delivery firm Malltail, its Japan-to-Korea delivery volume increased 80 percent from a year ago to approximately 18,000 cases in January and February this year. “The weak yen has resulted in more consumers getting interested in Japanese shopping malls such as Amazon Japan and Rakuten, which have the merit of shorter delivery periods compared to those in Europe and the U.S.” Malltail explained.