Homegrown to Furniture Frontiers

Japan’s retail landscape is undergoing major shifts—prices for various materials and products are fluctuating, and consumer preferences are evolving. Customers are looking for a blend of traditional values and modern aesthetics. At the same time, sustainability has become a crucial consideration, and people are increasingly seeking quality products at affordable, post-pandemic prices. How is Nitori responding to these expectations both domestically and internationally?

You’re absolutely right. Consumers today want it all: sustainable choices, premium quality, and affordability. They may not always express it directly, but price remains a key factor—even for eco-conscious or design-oriented products. If something is environmentally friendly but priced too high, many customers will hesitate or walk away.

That’s why, at Nitori, we see value, sustainability, and price as interconnected pillars. Take our feather duvets, for example—one of our flagship products. Traditionally, producing new feather bedding comes at a high cost, but we’ve introduced a recycling initiative where customers return used duvets. We clean and refurbish them into fresh products, reducing waste and keeping prices accessible. By outsourcing the washing process to overseas factories and optimizing the supply chain, we’ve brought prices in line with new products while significantly lowering environmental impact.

Another example is our best-selling pillow. Three years ago, we redesigned its packaging, reducing volume by approximately 60%. While manufacturing costs slightly increased, the smaller packaging enabled us to fit 2.5 times more product in a single container or truck—cutting CO₂ emissions, lowering logistics costs, and increasing efficiency across the board. Warehousing, store stocking, and even customer carry-out became more streamlined. These improvements reflect our vertically integrated logistics model, which gives us control that many companies outsourcing distribution simply don’t have.

By making packaging more compact, we’ve been able to avoid investing in an additional ¥50 billion distribution center. This decision alone speaks to the massive long-term benefits of holistic logistics reform.

Can you elaborate on Nitori’s “Green Vision 2050” and how you’re applying sustainability strategies in Southeast Asia and beyond?

Our Green Vision 2050 targets a Carbon Neutralityin greenhouse gas emissions and aims to recycle 100% of customer-returned products. In Asia, our name recognition is still growing—Taiwan is progressing well, but we’re just getting started elsewhere.

Our approach is to replicate what’s already working in Japan. For instance, furniture often creates large-scale waste when customers replace old items. In Japan, we’ve begun using our own trucks to collect unwanted furniture, and we’re building regional sorting and recycling centers to process this material. We aim to reuse or recycle 95% of what we collect. Once proven, this model can be deployed in overseas markets.

We’re also innovating in product design. Take our mattress made in our Vietnamese factory—it’s compressible for easier transport and designed for disassembly in under 10 minutes by two people. Mattresses are notoriously hard to recycle due to mixed materials, but ours is built with recycling in mind.

What lessons have you learned from Nitori’s expansion into Vietnam and India, and how are those insights shaping your broader international strategy?

Expanding into Asia taught us that two main factors vary by region: living environments and regulations. Climate, home size, and lifestyle all influence what sells and how. Then there are legal and compliance challenges—some manufacturing processes acceptable in one country are banned in another. Many of these rules aren’t even written; you discover them through experience.

We’ve faced these head-on and adjusted accordingly. While rules differ, the underlying need is the same: to provide practical, well-designed products at accessible prices.

Outside of Vietnam and India, where do you see the most promising opportunities for Nitori in Asia? Are you pursuing local partnerships, building factories, or focusing on distribution infrastructure?

We believe now is a particularly opportune time to expand across Asia. The region already plays a central role in our supply chain for Japan, and we can leverage that infrastructure.

More importantly, Asia’s middle class is growing rapidly. In fact, it’s likely the fastest-growing in the world. This expanding demographic presents a major opportunity for the Nitori Group over the coming decades.

When analyzing market potential, we look at per capita annual spending at Nitori, city by city. Even within Japan, there are wide variations. This data helps us target areas where middle-class growth will translate into future demand.

As for our business model, we operate independently in every country—whether it’s China, Vietnam, India, Indonesia, Malaysia, Thailand, the Philippines, Singapore, or South Korea. We don’t rely on local partners or joint ventures. Full ownership allows us to respond swiftly to customer needs and manage our supply chain end to end.

Japan is entering an era of population decline. By 2040, labor supply may shrink by 12%. How is Nitori navigating this demographic shift, and what hidden opportunities might emerge from it?

Indeed, we’re already seeing this shift. Some of our stores are in towns that reflect what Japan as a whole will look like 30 years from now—aging populations and shrinking communities. And yet, even in those areas, our sales are growing.

Why? Partly because there’s less competition, and partly because our product range has expanded—customers visit us more often. We’re also seeing our store network boost e-commerce. Customers can visit a store for assembly help, exchanges, or product inquiries. This reduces returns and keeps service costs low.

As populations shrink, we’ll adapt with smaller stores and more efficient operations. But we’re also using technology to drive productivity. For over 30 years, we’ve tracked employee labor efficiency quarterly—this includes part-time staff. Our aim is to keep improving productivity through automation and AI, enabling fewer people to achieve more.

Nitori’s business model emphasizes vertical integration. Can you share how this evolved and why it has become a competitive strength?

In the beginning, we had no choice but to do everything ourselves—logistics, procurement, product development. We realized that buying from wholesalers made it hard to offer great products at affordable prices. So, we began sourcing directly from manufacturers, both in Japan and overseas.

That led us to integrate manufacturing, product planning, logistics, and retail into a single business model. It wasn’t easy, but we believed that overcoming these challenges would create a lasting advantage over competitors.

We now own factories in Vietnam and Thailand—both were originally struggling OEM partners that we brought into our group. Today, they’re profitable and expanding rapidly.

Finally, Nitori has set ambitious targets: 3,000 stores and 200 million customers globally. How do you plan to grow while preserving Nitori’s identity and customer focus?

Our approach is to stay grounded—it’s not about suddenly reaching 200 million people. It’s about serving each customer, one by one. If someone walks out without buying anything, there’s always a reason, and it’s our job to find out why.

Everyone in the company, at every level, should be thinking about what sells, what doesn’t, and why. We track customer traffic—what we call “guest count”—as one of our most important metrics. The more people we can help improve their daily lives through our products, the more naturally our business will grow.

And if you had to describe Nitori in one sentence to someone unfamiliar with the brand—how would you put it?

Nitori is a company that strives to offer high-quality, well-designed products at prices that are accessible to everyone. Our goal is to help ordinary people create homes that are more comfortable, more enjoyable. We want to bring that experience to households in all 59 countries where Newsweek is read—and beyond.

For more information, visit their website at: https://www.nitorihd.co.jp/en/