Japanese Market Potential

Why do business in Japan?Japan's Leading National Paper

Growth Strategy (announced on 14 June 2013) : Japan is BACK.

Overall Target: 2% Real GDP Growth in the next 10 years JPY1.5 million Increase of GNI/capita after 10 years

Unleash the Potential of Private Sector•Accelerating industry restructuring and venture businesses•Regulatory institutional reform, opening up the public enterprises

Participation by All & Globally Competitive Human Resources•Greater female participation in the workplace•Society where both youths and elderly can work maximizing their potential•Globally competitive Japanese youth

Creating New Frontier•Revival of Japan as "technology-driven, intellectual property-based nation"•Attracting world business and tourists to Japan•Leap into global market under public/private concerted efforts

Japanese Market Potential

Why do business in Japan?Japan's Leading National Paper

Source : IMF "World Economic Outlook Databases October, 2013 edition" http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx

Enormous market (1)

GDP by Country

United States

United Kingdom

Spain

Russia

Netherlands

Korea

Japan

Germany

France

China

(USD billion)

2012 2011 2010 2009 2008

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000

1,3241,324

2,4772,4772,4652,465

2,2972,2972,2172,217

2,7102,710

16,24516,24515,53415,534

14,95814,95814,41814,418

14,72014,720

1,4561,4561,3871,3871,4581,4581,6011,601

2,0302,0301,8991,899

1,5251,5251,2231,223

1,6611,661771771834834779779798798875875

1,1301,1301,1141,114

1,0151,015834834931931

5,9605,9605,8965,896

5,4955,4955,0355,035

4,8494,8493,4303,430

3,6313,6313,3113,3113,3073,307

3,6413,6412,6142,614

2,7852,7852,5702,5702,6262,626

2,8452,8458,2218,221

7,3227,3225,9305,930

4,9914,9914,5204,520

Japanese Market Potential

Why do business in Japan?Japan's Leading National Paper

Asia

North America

Western Europe

Middle East

Middle South America

Oceania

Central and Eastern Europe, Russia etc.

Africa

(%)

2012 2010 2005 2000 1995

0.0 10.0 20.0 30.0 40.0 50.0

44.344.345.345.3

44.444.441.741.7

36.736.710.010.0

11.311.314.214.2

21.321.325.725.7

10.210.210.610.6

12.412.413.613.6

16.216.219.219.2

17.117.117.017.0

13.013.09.49.4

4.04.04.14.1

3.13.12.92.93.53.5

6.96.97.17.1

5.45.44.74.7

5.55.52.92.92.82.8

1.61.61.51.51.71.72.42.4

1.71.71.91.9

1.31.31.41.4

(%)

2012 2010 2005 2000 1995

0.0 5.0 10.0 15.0 20.0 25.0

1.71.71.51.51.51.5

1.31.30.80.8

6.26.25.25.2

5.65.63.73.7

2.92.95.05.0

4.24.24.94.9

3.93.93.03.0

2.32.32.32.3

1.21.21.21.21.41.4

0.80.80.90.9

1.31.31.71.7

2.12.11.41.41.51.51.71.71.71.7

2.02.02.82.82.82.8

3.53.53.43.4

4.14.11.41.41.41.4

0.90.90.80.8

1.21.28.68.6

9.79.712.412.4

19.019.022.422.4

6.46.46.56.5

4.84.83.93.9

4.34.33.63.6

4.14.14.04.04.34.34.24.2

3.73.73.33.3

2.82.83.83.8

3.13.14.64.6

4.14.14.74.7

5.45.45.15.1

21.321.322.122.1

21.021.014.514.5

10.710.7

Kuweit

Saudi Arabia

UAE

Russia

UK

France

Germany

Brazil

USA

Australia

Indonesia

Malaysia

Korea

China

Enormous market (2)

Source: "Foreign Trade 2013" Japan Foreign Trade Council, Inc http://www.jftc.or.jp/english/reports.htm

Ratio of Imports to Japan

Japanese Market Potential

Why do business in Japan?Japan's Leading National Paper

Enormous market (3)

Source: IMF "World Economic Outlook Databases";"Prefectural Economic Almanac 2010", Economic and Social Research Institute, Cabinet Office http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx

Regional GDP = national GDP of other countries

2,306

Kantoregion

2,262

UnitedKingdom

(USD billion)GDP Comparison Between Japan's Regions and Selected Foreign Countries

462

Tohokuregion

469

Poland/Belgium

215

Hokkaidoregion

217

Israel

157

Shikokuregion

142

New Zealand

324

Chugokuregion

319

Thailand

558

Kyusyuregion

528

Switzerland

Chuburegion

861

Netherlands

779

Kinkiregion

Korea

901 1,015

Japanese Market Potential

Why do business in Japan?Japan's Leading National Paper

1 Switzerland

2 Singapore

3 Finland

4 Germany

5 US

6 Sweden

7 Hong Kong

8 Netherlands

9 Japan

10 UK

Competitive Market (1)

Global Competitiveness Index 2013-14

Source: World Economic Forum, "The Global Competitiveness Index 2013-2014"http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf

Business Sophistication

1 Japan

2 Switzerland

3 Germany

4 Netherlands

5 Finland

6 US

7 Sweden

8 Austria

9 UK

10 Qatar/144 Countries

Rank

9

/144 Countries

Rank

1

Japanese Market Potential

Why do business in Japan?Japan's Leading National Paper

Trends of Sales at Department Stores in Japan

Trends in 2013

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

0.20.2

-0.3-0.3 -0.3-0.3

1.41.4

(%)

TokyoNational

-12

-10

-8

-6

-4

-2

0

2

-3.2-3.2-3.0-3.0

-8.6-8.6

-10.2-10.2

-6.8-6.8

Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep.

(%)

TokyoNational

-4

-2

0

2

4

6

8

10

0.20.2 0.30.3

3.93.9

-0.5-0.5

2.62.6

7.27.2

9.49.4

-2.5-2.5

2.72.7

2.82.8

0.50.5

2.52.5

6.46.4

2.12.1

5.15.1

-1.0-1.0

5.65.6

3.63.6

Competitive Market (2)

Source: Japan Department Stores Association "Outlook of the Sales of Department Stores Survey"http://www.depart.or.jp/common_department_store_sale/list

Japanese Market Potential

Why do business in Japan?Japan's Leading National Paper

AD SPENDS SHOW THE SWIFT RECOVERY AFTER THE QUAKE (1)

Total Ad Spends in 2012: USD58.9 billion

0

10

20

30

40

50

60

70

80

68.268.2 69.469.4 70.270.2 66.966.9

59.259.2 58.958.958.458.4 57.157.1

20052005 20062006 20072007 20082008 20092009 20122012

59.759.7

2013201320102010 20112011

USD billionUSD1 = JPY100

Source: Dentsu, Inc."Japan advertising expenditure 2013"http://www.dentsu.com/books/index.html8

Japanese Market Potential

Why do business in Japan?Japan's Leading National Paper

AD SPENDS SHOW THE SWIFT RECOVERY AFTER THE QUAKE (2)

Trends of Ad Spends and GDP (Changes from a year earlier)

80

105

100

95

90

85

Ad Spends GDP

(%)

20052005 20062006 20072007 20082008 20092009 20102010 20112011 20122012 20132013

102.9102.9

100100

101.7101.7

100.6100.6 101.1101.1

101.2101.2

95.395.3

97.797.7

88.588.5

9494

102.4102.4

98.798.7

97.797.7

97.697.6

103.2103.2101.4101.4

100.5100.5 100.1100.1

Source: Dentsu, Inc."Japan advertising expenditure 2013"http://www.dentsu.com/books/index.html9

Japanese Market Potential

Why do business in Japan?Japan's Leading National Paper

AD SPENDS SHOW THE SWIFT RECOVERY AFTER THE QUAKE (3)

Source: Dentsu, Inc."Japan advertising expenditure 2013" http://www.dentsu.com/books/index.html10

Ad Spends classified by Industries (1)

(JPY billion)

2010 2011 2012 2013

0 50 100 150 200 250 300

165165167167

210210207207

288288

78788181

26262525

116116117117

145145

263263

54545454

Home equipment

Home Electronic

Government

Food

Finance

Fashion

Energy, Material, Machinery

Education, Hospital, Religious group

Cosmetics Toiletry

Beverage

Automobile

33333131

168168

65656969

272272

280280

Japanese Market Potential

Why do business in Japan?Japan's Leading National Paper

AD SPENDS SHOW THE SWIFT RECOVERY AFTER THE QUAKE (3)

Source: Dentsu, Inc."Japan advertising expenditure 2013" http://www.dentsu.com/books/index.html10

Ad Spends classified by Industries (2)

(JPY billion)

2010 2011 2012 2013

0 50 100 150 200 250 300

245245

148148147147

203203

109109109109

211211

Classified, others

Tourism

Sports Equipment

Retail

Restaurant

Real Estate

Publisher

Office equipment

Medicine Pharmacy

Information

92929090

41414040

29292828

142142

109109115115

243243

193193

210210

129129