CHAPTER 3. DISTRIBUTION SYSTEM OF KEY IMPORTED
3.1.1. The characteristics, exported and imported products and
3.1.1.1. The characteristic of Japan’s textile and garment industry
After the World War II, Japan once was a textile production superpower, one of the five countries that was Europe’s largest suppliers and took up 1/10 imported goods of the United States. However, with the high development of electronics, automobile manufacturing industries…, and with a rising labor cost, heavy labor industries such as textile and garments gradually moved to other countries with lower labor cost than Japan such as nations in South and South East Asia in the form of direct foreign investment. Typically, Nisshinno Corporation built a very large textile and garment factory in Indonesia in 1988; or Rayon Mitsubishi poured 15 billion Yen into China. At present, apart from supplies from factories, Japan also imports a large quantity of textile and garment product (an estimate of 22-25 billion USD per year) in order to meet the high demand of a population of about 130 million people.
Japan’s demand for textile and garment products is very huge and diverse.
With a high standard of living, the Japanese spend on clothes more than any other consumption markets. Japan has distinct four seasons. In the winter, temperature in the North can go down to 0 degree while in the summer, temperature in the South can reach about 36-37 degree. Therefore, there is a huge and diverse demand for clothes in each season. Additionally, since long, the Japanese has paid attention to fashion; especially since the 1980s of the 20th century, with an economic boom, high quality clothes also represented one’s social status. As analyzed in Chapter one, the Japanese now are paying more attention of product origins and types. With textile and garment products, these criteria are emphasized more. The Japanese’
taste and preferences are continuously changing. They pay a special attention to the world fashion trend and latest items, especially the youth and the middle and above class. Thus, Japan focuses on the imported textile and garments market from Asia.
Apart for textile and garment products, Japanese consumers have a huge demand for household textile products such as bed sheets, blanket sheets, curtains,… There is a high demand for product quality. Products with small errors such as not well-interlaced threads… are still considered defected ones and get returned. Product materials and colors are also specially examined and paid attention to. Products made from artificial fibers are under strict control to avoid bad influences on consumers’ health
For clothing materials, Japan’s markets prefer natural products such as cotton, wool, silk… However, they do not like products made from artificial fibers due to their discomfort and a lack of ability of absorb moisture.
Because the domestic textile and garment industry only meets 40% market demands and has higher price than imported products, this is a fertile area for foreign textile production and export companies. Now, large textile exporters to Japan’s markets are from China, Italy, Thailand, Vietnam… Wars to dominate this market are intense and fast-paced because there is a continuous change in consumers’ demand for higher quality, designs and prices.
3.1.1.2. The characteristic of imported textile and garment products into Japan’s market Table 3.1. 3 main categories of imported textile products in Japan
Product level Characteristics Exporting countries
Casual products Diverse material and largely are hand-made
China, ASEAN countries Middle quality products Small shipments, short delivery
time, a diversity of forms and types to meet the Japanese’s taste and preferences
China, South Korea, and ASEAN countries
High quality products Small shipments, a diversity of famous brands, largely from high quality and expensive fashion suppliers
Western European countries and the USA
Source: www.vietnamexport.com
In terms of composition of Japan’s imported textile and garment products, textiles takes about 25-30 percent while ready-made clothing takes about 70-75 percent . There is a large quantity of vest, shirts for office workers in Japan as they usually wear this attire in office. Additionally, the Japanese like sports very much so sport-related attires are also in great demand in this market. In the future, it is predicted that natural products will becoming more popular and in higher demand due to its comfort, great sweat absorption ability, hygiene and safety.
In the end of the 20th century, due to economic depression and declining purchasing power, affecting the quantity of textile products in demand and in consumption, Japan’s textile and garment businesses rapidly reformed their business structure, narrowed down their scale and focused on research for new fashionable products with s short life span. Now, the form of specialty retailer of private- label apparel, in which producers also the role of product distributors and seller, is getting more popular in Japan by
3.1.1.3. The characteristics of the distribution system of Japan’s textile and garment industry
It depends on the types of goods and product booking or product sale. There are 3 main distribution channels in Japan’s markets.
Figure 3.1: Distribution channels of textile and garment products in Japan’s market Source: VCCI
In the first distribution channel (most popular), finished products are distributed from (1) foreign producers to (2) local importers and then (3) wholesalers. After that, wholesalers will distribute products to (4) department stores and supermarkets or (8) other retailers and then to (5) final consumers.
The second distribution channel is direct importation of goods from foreign countries of (6) huge producers, (4) supermarkets or other retailers. Department stores and supermarkets book goods from foreign products based on their own design and mechanism that they set out at first.
The third distribution channel is direct importation of material or semi-finished products for (7) textile and garment companies. Clothes and other finished products are made here and then transferred into distribution channels of finished products.