Charlotte Russe in Japan

By:Shreelakshmi Adarsh

Anoosheh BahramipourMohammad Ben Tarif

Guillermo Barrera

Outline

Country Review General Economy Demographics

Business Review Market Analysis

Opportunities Challenges

Internal Analysis Marketing Strategy Conclusion and Recommendation

Country Review

General Area: 377,835 sq km (slightly smaller than

California) Capital: Tokyo Population: 127.5 million Literacy Rate: 99% Government: Constitutional monarchy with a

parliamentary government

Country Review

Economy GDP: $3.582 trillion Composition by sector:

Agriculture: 1.3% Industry: 25.4% Services: 73.3%

GDP real growth rate: 2.7% GDP per capita: $28,200 Est. 2003

Country Review

Economy Exports: $447.1 billion

Main Exports: motor vehicles, semiconductors, office machinery and chemicals

Export Partners: US, China, South Korea, Taiwan and Hong Kong

Country Review

Economy

25%

12%

7% 6.6% 6.3%

US China SouthKorea

Taiwan HongKong

Export Partners of Japan

Est. 2003

Country Review

Economy Imports: $346.6 billion

Main Imports: machinery and equipment, fuels, foodstuffs, chemicals, textiles and raw materials

Import Partners: US, China, South Korea and Indonesia

Country Review

Economy

19.7%

15.6%

4.7% 4.3%

China US South Korea Indonesia

Import partners of Japan

Est. 2003

Country Review

Demographics High population density: 329.5 persons per

sq km 50% of population on 2% of land Total population: 0.96 male/female Age structure:

0-14 yrs: 14% 15-64 yrs: 67% 65 yrs and over: 19%

Country Review

Demographics Population growth rate: 0.08% Life expectancy at birth

Male: 77.74 years Female: 84.51 years Total population: 81.04 years 6th WorldwideComparing to US of 77.43 years

Est. 2004

Business Review Charlotte Russe is an American women’s

clothing company. First store opened in Carlsbad, California in

1975 Trendy women’s clothing. Very reasonable prices. Targets women between the ages of 15 and

35

Business ReviewProducts Satisfies broad range of ready-to-wear

apparel to match all lifestyle needs: Casual Social Career Special occasions

Dresses, shirts, tops, skirts, pants, shorts and all types of seasonal wear as well as outerwear

Accessories such as shoes, jewelry, handbags etc.

Business Review

Performance Today Charlotte Russe owns 256

stores Sales in 2003 fiscal year over $450

million Acquired Rampage stores in 1997,

taking it from 16 stores to 55 stores today

The Question

Should Charlotte Russe enter the Japanese market?

Market Analysis

Opportunities World’s second largest apparel

market after USA: $25 Billion Women’s clothing dominates the

market with the highest percentage of sales

Imports of apparel increased 10.9% in 2003

Market Analysis

56%

32%

12%

Women Men Children

Apparel Market in Japan

Market AnalysisImports from US

0

200

400

600

800

1000

1999 2000 2001 2002 2003

Apparel Imports From US in $Million

0.8%Value

1.6%Quantity

Market AnalysisImports from China

02468

1012141618

1999 2000 2001 2002 2003

Apparel Imports from China in $Billion23.7%Value

80%Quantity

Market Analysis

Local production decreased 20% yearly

2001 – 2003.

Year Total Market

Local Production

2001 $32 B $16 B

2002 $27.5 B $13 B

2003 $25 B $11.5 B

Market Analysis

An increase of 20% in the last year.

Year Exports

2001 $215 M

2002 $242 M

2003 $291 M

Market Analysis

Opportunities The real success stories are in the

specialty store sector.

Store-based sales, that account to 80% of the total sales, increased 6.1% in Feb 2004.

2.5% increase in Sales in Feb 2004. 5% in Women’s clothing sales.

Market Analysis Summary of Feb 2004 sales increase:

Total SalesWomen’s clothing

sales

Store-based sales

+2.3% +5% +6.1%

Market Analysis

Japan’s economy expanded a real 1.7% in the October-December period: the best showing in 13.5 yrs Backed by strong corporate capital

investment, exports and consumer spending

Market Analysis

Opportunities

The average age of marriage for females 27 years and increasing

Japan’s birth rate is among the lowest of the world’s advanced economies

Market Analysis

Opportunities

Fashion-conscious women

U.S. products have basic acceptance in the market (makes authentic U.S. apparel a popular market segment)

Market Analysis

Most popular American brand names in Japan Polo Ralph Lauren Stussy X-Girl Gap Nike Levis

Market AnalysisChallenges

An overall decline in the US apparel exports

A stagnant economy clubbed with effects of the Asian financial crisis.

Yen continues to teeter to the US$ (making US goods more expensive to the Japanese market)

Market AnalysisChallenges A very little room for error (shipments must

neither be too early nor too late) Clothing produced by American companies

has been traditionally designed for the Western women’s figures)

Japanese are highly conscious of the quality of sewing

Market Analysis What do Japanese females

demand for?

Brand name Affordable price Quality of sewing Fabric texture Trendiness

Internal Analysis

What does Charlotte Russe offer?

Popular American brand name Good quality clothing & reasonable price Trendy Good fabric texture

Internal Analysis

Stussy: $57X-Girl T

-shirt: $50

GAP: $30

Marketing Strategy 4 Alternatives for penetrating the Japanese

market: Hire Japanese trading companies to act as

agents to export our goods Sell directly to Japanese trading companies who

can then import these goods into Japan Sell through a U.S. based company that is

familiar with the Japanese apparel market and has connections with Japanese importers or businesses

Sell directly to the market through specialty stores

Marketing Strategy

Target Market Young female trend-setters

rather than trend-followers

Control the most discretionary income in Japan

Are concentrated in large cities such as Tokyo and Osaka

Marketing Strategy Mail order catalogs Billboards in cities like Tokyo and

Osaka Television and print advertising

through select channels of media Participating in Japanese tradeshows

or visiting trade shows in the United States that attract Japanese attendees

Conclusion & Recommendation

Big population+ Big market segment+ High purchasing power+ Fashion oriented women+ Few U.S. competitors+ Very affordable prices+ Specialty stores advantage+ Brand name+ Nice clothing

= Excellent business opportunity.

Thank You!

Any Questions?