STITCHING UP THE MARKET:
In Clothing, Japan Has Become an Import Colossus

JUNE 3, 1996

Imports of luxury brand-name items are rising quickly.
(Photo: Sun Motoyama Co.)

A major supermarket specializing in low-priced goods has been putting all its strength into importing men's business suits. The ratio of imports in its stock of suits reached a whopping 80% in 1995, a twofold increase in just two years. Most of the goods come from China. As store officials explain, "Consumers today don't care about where something was made, as long as they're happy with its price, quality, and design."

Meanwhile, a department store in Shinjuku, one of Tokyo's main shopping districts, displays a colorful lineup of spring outfits in its newly opened fourth floor women's clothing boutiques. Particularly noticeable are the name brands from the United States, Britain, France, Germany, and Italy. Indeed, foreign goods here account for as much as 40% of all merchandise.

Throughout the store, imports have commanded a growing presence with each seasonal change of goods. The volume, according to store officials, has risen 2.5 times in three years. Nearly all of the items are either direct purchases or special orders to suit Japanese tastes in material, color, and design. Efforts have been made to keep prices to within 1.25-times that of similarly high-quality Japanese goods. Most customers feel that with such a small difference in price, the imports are well within their reach.

A Clothing Import Superpower
According to 1995 trade statistics compiled by the Ministry of Finance, the value of imports came to 1.5 trillion yen (14.3 billion dollars at 106 yen to the dollar) and exports, just 23.3 billion yen (220 million dollars), for a ratio of 65 to 1. Just four years earlier, in 1991, the ratio stood at 27 to 1, providing a clear indication of the staggering pace at which imports have been rising. The Japanese ratio far surpasses that of such countries as France, where imports are 1.9-times higher than exports, Germany, where they are 3.3-times higher, and the United States, where they are 7.0-times higher.

Imported clothing used to fall into two main categories: quality name brands from the United States and Europe and low-priced goods from other Asian countries. However, the situation is changing. Shipments from China, Japan's biggest supplier, once comprised inexpensive goods exclusively but now include a growing volume of suits and coats in the mid-range for price and quality. The more expensive items are the upshot of a close supervision of sewing and other technologies by Japanese and Western manufacturers, which have come to regard China as a major center for the production of clothes.

The surge in Japan's clothing imports over the last few years has come on the heels of the yen's rise against the dollar, which has further widened the gap between domestic and foreign labor and production costs. Asian-made goods, which account for most of the low-priced items, have grown even cheaper, and famous U.S. and European brands, which used to cost two or three times more than comparable Japanese labels, are now just a third or half more. The reduction in the retail prices of these goods has made them even more attractive to consumers, and the result has been a further expansion of imports. Under the pressure of the growing volume of imports, Japan's domestic apparel industry believes the only way to survive is to continue shifting over to the production of high-value-added goods featuring original designs and high-tech materials.