February 2014 Archives

2013 Music Products Retail Market Survey

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Japan Music Trades conducted 2013 music products retail market survey sending a questionnaire to 146 music retailers throughout Japan at the end of January. Here's a report based on the responses from 102 dealers.

Number of dealers who replied their business increased in 2013 over the year before last exceeded those who reported decline, suggesting a steady recovery from 2 years ago.
Facing consumption tax hike in April, the industry carefully watches consumer spending and market conditions.

2013 Sales

42 music dealers out of 99 replied their sales rose in 2013. More than half of them are still struggling with declined or flat sales, however, when compared with the result in 2012, there is a clear sign for recovery of music products retail market. The 42 dealers with positive sales results reported 8.2% increase in average, and 15 dealers achieved two digit growth.

Though the effect of dynamic economic rebuilding programs set out by Abe Cabinet looks to be under expectations of the music products industry, overall music retail performance is slowly but steadily returning.

Consumer spending has been mildly improving since last spring, and in the fall after the government announced consumption tax hike implemented in April, 2014, demands for high-ticket music products soared. The dealer reports confirmed improving consumer confidence.

Backed by recovering general economy, music sales significantly improved from the year end to early this year, the most expectable business season in Japan. Reflecting the favorable economic trend, the dealers reported sound sales during the period.

Albeit they see 2014 business cautiously as coming consumption tax hike might affect consumer spending, Japanese government announced additional economic boost packages to cope with possible steep slowdown after April. However, it's uncertain whether they work as expected, and there is a possibility that the effect causes retail businesses a serious damage.

According to NHK (Nippon Hoso Kyokai, or national broadcasting station) Industrial Market Survey conducted in the middle of January, nearly all of 100 Japanese major companies reported that they felt economic recovery, and 71% of them replied planning a pay raise for employees this spring. Only 9% replied increase of basic salary, 30% suggested paying employees extra wage bonus, and 32% planning only regular wage increase. Obviously, the industry leaders are not fully confident in the present economic upturn and anxious about long term growth ahead.

Which products achieved good sales in 2013? 

Dealers reported increased sales of digital and upright pianos, woodwind and brass instruments, and acoustic guitars. They also commented that music teaching studio operations went out successfully during the year.

School market continues to grow with improved sales of flutes, clarinets, saxophones, trumpets and violin family instruments.While, electronic organ ended up with the same level of sales of the year before last.

Electric guitars, amps and effect processors are still struggling with slow sales. Dealers see the trend will continue for sometime. Ukuleles were familiar among adults for easiness to play a year before last, and the 2013 report confirmed the trend continued.

Some music dealers sell electronic drums exclusively with entry models as base line these years. They prefer innovative functions and sound-control ability of them, and customers are expanding to young children and female players. They are one of the most expectable products this year.

What should the industry do?

In the question about the industry concerns, the dealers commented the needs of extended music making promotion. Last year, they much worried about deep discounting among dealers including online operators.

This year, their attitude changed pointing the basics of doing business which are market development and promotion of music playing, essential factors for music dealers to serve and survive in local communities. They shared the action plans, offering opportunities and stages to make music for amateur players, organizing all-industry band competitions and supporting students' pop bands. They understand that music dealers can support local music communities by returning their profits to music makers.

Musical Instruments Fair Association Japan stages Tokyo Music Fair again
at a new location, Tokyo Big Site, in November. It will provide the industry with a revised stage toward the goal of expanding music making population.