JAPAN’S NAME GAME PLAYS ON
Byline: Tsukasa Furukawa
TOKYO — Consumers here might be buying a little less than they did in the boom of the Eighties, but when they buy, they’re going for imports.
Despite a hike in the consumption tax to 5 percent from 3 percent in April, resulting in a dip in retail sales, the hunger for American and European brands here has not abated.
According to the Japan Department Store Association, department store sales in Japan in March — just before the tax hike — zoomed 23 percent from March 1996, but sales plummeted 14 percent in April. Then the downswing slowed, but sales were still off 5.1 percent in May and 4.7 percent in June.
Japan has the world’s second-largest economy and a population of 126 million, or half that of the U.S. It is the leading importer of apparel, last year registering a record intake of $18.9 billion, up 6.2 percent from the previous year.
This followed robust growths of 23.2 percent in 1995, 22.7 percent in 1994, 16.2 percent in 1993, 22.8 percent in 1992. The size of Japan’s import market, when accessories are included, is in excess of 2 trillion yen, or $20 billion, according to the Japan Textiles Importers Association here.
The numbers, however, include imports from low-cost producer countries such as China, which supplies 60 percent of Japan’s requirements; Vietnam; Indonesia; Thailand, and the Philippines.
Italy followed China as the second largest supplier with an 8.9 percent share, and the U.S. was fourth with 5.4 percent.
All together, fashion apparel imports from American and European markets now account for nearly 20 percent market share, and they’re still growing.
The strength of the foreign designer apparel market is supported by several developments involving change in the buying attitude of the Japanese consumer and in the structure of the Japanese market in recent years.
In the boom years of Japan’s inflated economy in the Eighties, Japanese consumers with deep pockets snatched up whatever merchandise they could find, at any price, as long as it was a major designer label.
The boom ruptured around 1990, causing the import market to shrink but only temporarily. As Muneyoshi Uchida, general manager of the textile administrative division of Mitsui & Co., notes, the fashion import market has been coming back strong after hitting the bottom in 1991.
“During the boom time, there were people who spent 10 million yen [$100,000] a year just on clothes,” the Mitsui executive observed. “High-priced clothes with big designer labels flooded the Japanese market.”
The boom years are gone, but not the taste for fashion that ensued. That economy provided opportunities to Japanese consumers to see top-quality American and European merchandise, and they’re not about to give it up.
A big trading company like Mitsui, for one, now represents about 40 American and European designer brands involving nearly 100 product lines. The company recently purchased the Pierre Cardin brand name for the Japanese market.
Now, though, the Japanese consumer is far more selective and discriminating about what she buys in terms of value versus price, according to As Nobuyuki Ota, executive director of the Tokyo Life Style Institute.
“But even today, the Japanese consumer is willing to pay a high price for good designer clothes if the product has the real value that justifies its price,” Ota, former executive director of the Council of Fashion Designers, Tokyo (CFD), said. “In this respect there are more opportunities in Japan now for high-quality American and European designs with real content.”
Some 15 million Japanese go abroad every year, providing exposure to original products in stores abroad. This is why Japanese consumers are no longer satisfied with copies. As Ota put it, they want the real thing.
In this scenario, import of European and American-made products is growing. For example:
Ralph Lauren’s Purple Label line is making its debut in Japan.
Christian Dior broke with its longtime Japanese partner, Kanebo, earlier this year to gain freedom to expand its direct import sales in Japan.
Givenchy threw a big fashion show and party at the Toho Movie Studio here recently, inviting more than 1,000 guests.
Lanvin, which formed a new partnership with Kanebo, followed with a big show at the Westin Hotel to emphasize its presence in Japan.
This all reflects a big push by European designer houses to penetrate the lucrative Japanese fashion market. They are financially stronger today by means of two major sources of income they have built up over the decades — royalty revenues from licensing on a global scale and fragrance sales. Some are setting up wholly owned subsidiaries here to handle direct imports.
This is not to say Japanese manufacturers are sitting idle. Breaking from their traditional stance of being focused only on the domestic market, Japanese designers and manufacturers are creating strategic or international brands aimed at the global market. Issey Miyake’s easy-care Pleats-Please line has expanded to the U.S. and Europe, and so have the ICB brand from Onward Kashiyama and Ozoc from Kobe-based World.
After a disruption of more than a decade, young Japanese designers from the post-baby-boom generation are rising on the Japanese fashion scene, Ota said, noting that promising designers are meeting the changing needs of the Japanese market. Among those cited are Masaki Matsushima; Yoichi Nagasawa; Keita Maruyama; Jun Takahashi, for Undercover, and Tatsuro Tayama, for A.T.
Electronic data interchange is another area of serious interest by Japanese manufacturers, traders and retailers, who are forming EDI links. As EDI becomes widespread, it will transform the apparel and retail industry on the national and global scale.
Japan is a highly competitive but open market, the association said, noting it is “a highly sophisticated consumers’ market, which requires small-lot, wide-range and short-cycle deliveries.”
“Japan has no import quota system for clothing, nor any prior approvals of import by government agencies,” the association stressed. “Japan is a free import country as far as clothing is concerned.”