A Tiger Roars in Kansai
In a market known for its adherence to rules, Tiger Copenhagen is succeeding by breaking them
When Tiger Copenhagen opened its first Japanese store in Osaka last July, a queue stretched far down the sidewalk from the shop’s entrance in the trendy neighborhood of Amerika Mura. Those in line couldn’t just show up either. Entrance required a ticket. And sales weren’t just good. The store literally sold out, as eager shoppers snagged the entire stock within days.
The ticket system ended on November 9, but a queue can often still be seen outside, and around 2,000 customers turn up daily. “If you figure everything in, Japan is one of the largest cash cows for Tiger,” says Tiger’s Japan representative director Claus Falsig.
The company’s success is a testament to founder Lennart Lajboschitz’s flexibility and ingenuity, and it was the company’s willingness to take risks that allowed Falsig to embark on the business experiment in Osaka, a location that was largely Falsig’s (meticulously researched) idea.
Yet even Falsig’s thorough research and planning did not permit him to anticipate the frenzied consumer reaction to the store’s opening.
Tiger’s global success has a surprisingly humble backstory. Founded in 1991, Tiger opened its first retail store in Copenhagen in 1995 and has grown into a one-stop homewares business with 200 stores in 18 countries. Founder Lajboschitz eventually sold 70 percent of the company to a large private Swedish equity firm called EQT that has fueled its rapid expansion, but Tiger started out as an umbrella repair business.
“This meant that business was only good on rainy days,” Falsig laughs. “So Lennart [the founder] began selling sunglasses. When this wasn’t enough for his family, he continued to expand, gradually adding more items to the store’s inventory.”
When the time came to settle on an official name for the company, Lajboschitz again took an atypical approach. When he went on vacation and left his sister-in-law in charge of the original Copenhagen shop, he forgot to tell her the prices for all of the items on sale. When she called to enquire about it, he told her to charge 10 kroner (roughly ¥150) for every item. Remarking on the similarities between the Danish word for “tiger” and “tier”, the Danish slang term for a 10 kroner coin, Lennart had settled on a name.
Over time, the company continued to refine its strategy, and slowly evolved into a brand offering simple, colorful products, from homewares and toys to stationary and accessories, priced with the average consumer’s real concerns – namely, value – in mind.
With a population of around 25 million, Scandinavia is comprised of Denmark, Norway and Sweden, with Finland and Iceland rounding out the Nordic region, which in terms of soft power, punches well above its weight.
But until around two years ago, Tiger was Euro-centric. It was not until Falsig approached Lajboschitz with a wild idea that the company began to explore beyond its original terrain, ultimately leading to Osaka. Falsig’s fascination with Japan began with four backpacking trips he took from northern Honshu southward to Kagoshima.
Following these trips, he was hooked. The food, the people, the scenery, the culture – it all added up for him. Somehow, he had to make the move to Japan. “Tiger wasn’t really planning to open in Japan,” he said. “It was a side project. I wanted to go to Japan. When I pitched the idea, they said okay, go.”
At that point, Falsig had been working at Tiger for five years. As fate would have it, he arrived in Osaka six days after the March 2011 earthquake, and settled in Kyoto, where he began a rigorous course of studying Japanese and conducting market research.
As he pored over figures and mapped out an action plan, he began to see that the brand’s bright colors and subtly kawaii products were an ideal fit for Osaka’s consumer market – especially among its young professional women.
Moreover, the store’s emphasis on value aligns with the city’s mercantile roots and money-savvy residents. After all, a traditional greeting in Osaka is the archaic moukarimakka (“Are you making any money?”).
After sending his initial report to Copenhagen, the response was unequivocal: “They told me to open a shop as fast as I could,” Falsig recalls. The choice of location was right on target. “Osaka people are more conscientious about their spending and like bright colors more than Tokyoites.”
“The atmosphere of the store is light and fun,” adds Saya Arai, a marketing specialist in Tiger’s Osaka office. Music is played through an iPod and warm lighting brings attention to the items on sale. Shelves are low, giving a view across the store of the product range, which runs from hot sellers like ¥100 paper napkins to the ¥300 faux luxury plastic bags, featuring images of designer bags on white plastic.
Contrary to popular wisdom, opening in Osaka actually created more buzz for Tiger, according to Falsig. To date, only about 40 companies have made Kansai their point of entry to Japan. “This makes it much easier to stand out in Osaka,” he said.
In some ways, Tiger ended up making its move to Japan at just the right time. One of the biggest trends at play in its success is Japanese consumers’ decreasing desire to shell out hard-earned yen on designer goods. As Falsig sees it, “People are less convinced that things are worth their price, and have realized that price alone doesn’t reflect quality.”
An extreme example of wallet-gouging can be seen in the case of perfume. “The fragrant liquid itself costs about the same as beer to produce. The same goes for its packaging. But it sells for ¥10,000,” Falsig says.
By selling quality goods for a fair price, Tiger has flipped the profit model of big-name department stores on its head. “We are selling items for what we think is reasonable,” Falsig says. “This mindset that prices should be bumped up just because it’s Japan is totally wrong.”
Tiger’s items begin at ¥100 and go up to around ¥2,000, though the average price is ¥300-400. While the store makes slightly less per ¥100 than in some of Tiger’s other locations, Japan’s close proximity to about 400 suppliers spread across Asia has slashed logistics costs for the Osaka shop.
In a world with infinite choice, “to sell something it has to be unique,” Falsig says. “A cup is a cup. If you don’t make a cup unique – by having different price structure or good design – then why should someone buy a cup from you instead of a competitor?”
Tiger has discovered how to sell its uniqueness to Japan and plans to replicate the formula elsewhere. Within the next few years, the company plans to expand in Japan and leap to elsewhere in Asia – China being a huge potential market. These moves will likely prove exciting for the company as well.
“Most design an airplane first, then fly it,” he says. “We’re designing it as we fly.”