Cutthroat competition spreads to Japan's electronics sector

(Julian Ryall)

The price wars that are affecting everything from fashion to fast food in Japan have spread to the electronics sector.

Yamada Denki Co. has opened a vast new store selling discounted home appliances in the Shinjuku district of central Tokyo, with another store due to open nearby next year.

The other key players in the sector - Bic Camera and Yodobashi Camera - already operate similar large-scale outlets nearby.

The firms all have firm presences in the popular shopping districts of Shibuya, Ikebukuro and Akihabara and are considering further expansion plans.

And while all that competition means competition is likely to be cutthroat and consumers will be the big winners as prices fall, it remains to be seen whether the stores themselves can keep the cost-cutting up.

An estimated 10,000 people visited the new Yamada store on its opening day and the company has set an ambitious sales target of Y50 billion (€406.4 million) in the store's first year. Yodobashi Camera's rival outlet earns around Y100 billion (€812.7 million) a year.

Items that are particularly popular at the moment include mobile phones - which fashion-conscious and technology-savvy Japanese tend to change on a regular basis - personal computers and a new generation of digital cameras with a range of advanced functions.

With the end of analogue broadcasting scheduled for next year, electronics stores are also doing a brisk trade in flat-screen digital televisions. A recent report by the trade ministry indicated that more than 60 percent of Japanese households now own a flat-screen television.

And while these chains may have started out solely selling household electrical goods - Yamada Denki opened in 1973 as a single family-owned appliance store in the town of Maebashi - their buy-in-bulk-and-sell-cheap has proved successful.

All have also branched out to sell a wide range of goods - from clothes to music, cosmetics, books, toys and food - taking a lot of business that used to be the domain of the formerly all-powerful department stores.

JR