Consumer goods distribution and logistics in Japan

Authored by: Hendrik Meyer-Ohle

Routledge Handbook of Japanese Business and Management

Print publication date:  February  2016
Online publication date:  January  2016

Print ISBN: 9780415734189
eBook ISBN: 9781315832661
Adobe ISBN: 9781317859550

10.4324/9781315832661.ch28

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Abstract

One of the main characteristics of Japan’s industrial structure is a multi-layered distribution system with goods passing through several stages before reaching the final user. On the one hand, trading intermediaries include gigantic so-called general trading companies that played a major role in the internationalization of Japanese manufacturing by procuring raw materials and providing the necessary support in selling finished products overseas. Intermediaries in domestic distribution, on the other hand, vary widely in size and in the role that they play in the distribution chain, with goods often being passed through several layers of wholesalers, some of them being very closely affiliated with specific manufacturers. The Japanese wholesale system gained some prominence in the trade conflicts of the 1980s, where it was frequently mentioned as a non-tariff trade barrier. Foreign companies found it difficult to find distributors for their products, and even if they overcame this hurdle they had to adjust to a complicated set of trade practices, such as the right to return unsold merchandise, as well as myriad rebates that honoured long-term relationships more than trade volume or guaranteed fixed margins across the different levels of the distribution chain.

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