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I went to the Maclaren shop in Aoyama to get a replacement rain cover for our 2008 Maclaren Volo buggy today. The shop had 5 assistants standing about and no customers on either floor – quite an achievement given that it’s a holiday, but the store is in a truly awful location so that probably adds to its lack of popularity. The store is also crammed with inventory – not unusual in Japan, but a little strange for such a high cost location.

The conversation went like this (all in Japanese of course):

Me: Hello. I want to buy a rain cover for this buggy.
Assistant 1: Certainly, sir. Did you buy the buggy here?
Me: Er, no, I got it mail order.
As.1: oh, so you bought it overseas…
Me: (puzzled, and getting suspicious…) No, in Japan!
As.1: I see, sir. But not at this shop or at Familiar?
Me: No.
[Assistant 1 whispers to Assistant 2 and 3, before Assistant 4 disappears into the stock room to fetch Store Manager]
Store Manager: (Bum lickingly obsequious) We’re sorry but we can’t sell a rain cover to you unless you bought the buggy from us.
Me: What? Why not? Don’t you have any in stock?
SM: No, actually we have quite a few, but if we sold them to people who didn’t buy from us, we might not have enough.
Me: So you’re not Nomura Trading, the official Japanese Agent for Maclaren?
SM: (Quite unnerved that I know the company name) Erm, yes we are Nomura.
Me: Sorry, but wouldn’t you be better saying you had no stock rather than simply refusing to sell to me? It makes you look like you’re an import agent who punishes customers for buying from someone else?
SM: But saying we don’t have stock when we do would be unethical, sir.
Me: (Choke, splutter) Nevermind…. (Leaves shop)

Bottom line: My very rough guess is that the Maclaren brand has about 60% share in Japan, but their agent, Nomura Trading (despite their index being entirely in English I couldn’t immediately detect any English explanation on their site), has decided they will punish, not distributors, but customers for avoiding their high price markups. Parallel imports are generally a fault of bad distribution management and poor agents – and both are fairly uncommon nowadays thankfully. Thankfully also, Nomura doesn’t seem to have exclusive rights to Maclaren here (or, with this attitude, maybe they would have threatened to sue me before I left the store!).

My hypothesis would be that Nomura grabbed the brand early and has produced good results for Maclaren as the official importer – but that Maclaren has no idea of the full potential of the market and relies entirely on Nomura to feed it the information it has on Japan. At the same time, Nomura has attempted to restrict distribution to high end stores (the website lists just a tiny handful of ‘official’ stores for Tokyo). The buggy we now use, the Volo, sells for ¥29,400 on Nomura’s own website, although on Rakuten it goes for about ¥16,500 (and there’s very few people who won’t check this first nowadays), and ¥18,500 on Amazon Japan. In the US, it’s about $130 (¥12,000), and in the UK it’s about £75 (¥10,500). So Nomura are selling at between 60% and 100% markup. It’s hardly surprising that many people prefer to buy Maclaren products through other channels.

When I first came to Japan, this kind of thing was very, very common: a Japanese import agent selling popular brands at highly inflated prices, arguing they need to justify “investment” (at least Nomura opened a shop – albeit in an awful location with zero foot traffic) and “customer service” costs and, of course, Japan is “so expensive”. Based on mediocre sales, the agent would then deliver what seemed like reasonable profit to the overseas parent, who did not really understand the true potential of the market and who relied on the same agent for all its information. This may not be the case with Maclaren, but such “sorry, we can’t sell to you because you’re not the right kind of customer” response is very suspicious.

These import agents relied entirely on the docility of Japanese customers and their lack of knowledge about overseas products. Nomura is clearly doing exactly this – or hopes it is. The problem is that customers are no longer as badly informed and, unless the ‘official import price’ is only slightly higher than that through other channels, customers quickly realise they’re being thoroughly ripped off – especially if service levels also don’t match what you’d expect for the price paid.

In most cases, these agents were taken over by overseas parents realising that it was a short term gain, long term disaster, or died as they had too much exposure to well informed customers and relied on too few brands. In the case of Maclaren, a baby product, few parents would not do a lot of homework before purchase, so it’s hard to understand how Nomura has maintained their position even this long. Despite the high market share, my guess is that a huge proportion of sales do not come from Nomura. Of course, Maclaren probably doesn’t need to care about that, but, with better distribution controls, it could see average prices rise and see profit flow back directly to itself at a much higher rate. It also wouldn’t need to pay the cost of supporting Nomura.

Finally, about 18 months ago we did buy a footmuff from Nomura (also known as ‘Premium Brands’ for their online sales) as we couldn’t find it anywhere else. I remember the transaction well because, after putting in the order online, they immediately docked my credit card before shipping (not unknown or illegal, but certainly a tad unprofessional) and then I had to call them a week later to be told, sorry, the item was backordered and would take another 1-2 weeks to arrive. All in all, not a great experience or recommendation.

Technorati Tags:
Japan, retail, marketing, distribution, customer service, Maclaren, Baby buggy

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