Yum! Brands in the US is reportedly reviewing its Pizza Hut strategy. The company has struggled in recent years due to a mix of factors, including changes in US demand and aging stores.
Pizza Hut Japan, on the other hand, is in a different situation from its parent company. Pizza Hut Japan has continued to expand in recent years, and as of 2024 will have over 600 stores nationwide.
As such, some brands may decline in their home countries but maintain their presence in the Japanese market and evolve in their own unique way. This article examines representative examples of this, including Tower Records, Hard Rock Cafe, and Tully’s Coffee, and explores the Japanese market’s role as a “second home” for brands.
Tower Records: The original U.S. company filed for bankruptcy, But It Has Become a Cultural Hub in Japan
Tower Records was founded in California in 1960 and was once known as one of the world’s largest music retail chains. However, due to the spread of digital distribution and excessive debt, its US operations went bankrupt in 2006. All of its stores, including its iconic Hollywood location, disappeared.
In contrast, Tower Records Japan had a completely different fate. It entered the Japanese market in 1979 and became independent from its parent company in 2002. It continued to operate even after its US parent company went bankrupt, expanding its stores nationwide, including its Shibuya store.
In recent years, the “oshikatsu” culture (a Japanese culture of supporting idols, anime characters, and other popular characters in various ways) has flourished, and Tower Records Shibuya occasionally hosts events featuring artists.
Hard Rock Cafe: Shrinking Globally, but Surviving in Japan Through Tourism and Experience Value
While Hard Rock Cafes are undergoing store consolidation and closures worldwide, losing momentum in several regions, they continue to maintain their role as a tourist destination in Japan. With locations in major cities like Tokyo, Yokohama, Osaka, and Fukuoka, they are popular destinations for tourists visiting Japan.
What’s unique about these cafes is that they function more as “places for brand experiences” than as restaurants. Merchandise like logo T-shirts and pin badges is popular with foreign tourists, and the stores themselves, with their interior decorations and live music performances, have become a form of tourism content.
Amid a global shrinking trend, Japan is one of the few countries that have maintained a relatively stable presence, likely due to the combination of experiential consumption and branded merchandise.
TULLY’S COFFEE: A Brand that Effectively Withdrew from its Home Market, but Developed Its Own in Japan
TULLY’S COFFEE is a coffee chain founded in Seattle, USA. However, due to poor management and a series of lawsuits in its home market, it effectively ceased operations in the US in 2018.
Meanwhile, Tully’s Coffee Japan in Japan has taken a completely different path. The company opened its first store in Ginza in 1997, and in 2005 acquired the trademark rights from its US parent company, establishing an independent operating structure. Currently part of the Ito En Group, it operates approximately 450 stores nationwide.
The Japanese version of Tully’s has survived thanks to the maturation of the country’s cafe culture and the creation of community-oriented stores. This is a prime example of a brand that disappeared in the US but has continued to become a part of everyday life in Japan.
The Japanese Market: A Potential “Second Home for Brands”
Some brands and companies achieve success in Japan despite ultimately failing in their home countries. This may be due to factors such as cultural or physical store presence, which are well-suited to the Japanese market.
This phenomenon isn’t solely a matter of corporate strategy. For example, the rock band Queen enjoyed strong sales in Japan from the start, but historically, this was not the case in many other countries, including their home country of the UK. While Japan’s uniqueness is often cited as a barrier, it can actually be a major opportunity for companies from around the world.
In some cases, Japan could even become a “second home” for some brands and companies, as we’ve discussed so far. Tower Records, Hard Rock Cafe, and Tully’s Coffee are excellent examples for understanding the uniqueness of the Japanese market.
