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Bargain Basement Big In Japan(HKTDC Enterprise, Vol 04,2007)


The China Pavilion at the recent Tokyo International Fashion Fair may have looked bargain-basement with steel clothing racks, folding chairs and fluorescent lights, but it reflected prevailing Japanese market trends.

According to figures presented by Japan's Statistics Bureau of the Ministry of Internal Affairs and Communications, the typical Japanese household spent 4.1% of its total income on clothing and footwear in 2004, down from 7.1% in 1988.

The decrease could be attributed in part to shifting demographics - a steadily declining birthrate over the last 20 years means that there are simply fewer children in each household.

But another factor is the post-bubble economic slowdown and emergence of no-frills clothing chains such as Uniqlo that mirror the growing Japanese demand for bargains.

The search for good deals stretches across the board, with adults favouring quality and simplicity while youth-driven "street fashion" ranges from the Lolita look to the brutal Goth style, all worn with garish make-up and multiple piercings.

Young people's relative abundance of disposable income makes this an especially coveted market sector, reflected at the International Fashion Fair in a special Shibuhara Zone.

The term Shibuhara is an amalgam of the youth fashion Meccas of Shibuya and nearby Harajuku, a dynamic trend-setting shopping environment where entire store inventories can be overhauled on a weekly basis.

Indeed, Hong Kong and Chinese mainland participants would have taken heart from the fact that exhibitors from the Shibuhara and Creators Village sections were seen visiting the booths of overseas suppliers, suggesting challenging yet potentially lucrative associations where flexible order sizes and fast delivery times would take priority.

Elsewhere, the somewhat abated luxury clothing market survives in Japan and is aimed largely at middle-aged women, with, for example, a handful of high-end Finnish suppliers offering fur coats at wholesale prices of €5,000 and more.

More than 30,000 visitors flocked to the 15th International Fashion Fair from January 17-19, which was the largest edition of the biannual trade fair with 703 exhibitors - including more than 100 from outside Japan.

There was a threefold increase in the number of exhibitors in the Ladies' Wear category, while as usual the fair featured displays of not only apparel but also shoes, bags and accessories.

Hong Kong was represented by a number of booths in the 40-strong China Pavilion, and also by a couple of solo suppliers such as Betty Siu of O-Pa Development Ltd.

Siu utilises manufacturing facilities on the mainland to undertake OEM facilitation for Japanese customers, while her Pretti Dayz brand provides purses and belts for the teen to the thirtysomethings' market.

"We are targetting both small retail shops and department stores in Japan," said Siu. "We are flexible on quantity and can ship even small orders from our warehouses in Hong Kong and China."

Siu acknowledged that an increasing number of Japanese firms have begun working directly with Chinese factories, effectively taking Hong Kong out of the equation.

But she said this arrangement does not always work out well for the Japanese side, noting that she has heard complaints about quality. "Because we have our own factories in China, we can be sure of better service backup, higher quality control and punctual delivery," said Siu, claiming that "this is what makes us attractive" to Japanese customers.

"There are challenges to meet - for example more than 80% of the people we deal with here don't know any English, so we need to be able to communicate in Japanese."

Siu said her company was doing well with synthetic leather "glitter belts", which are available in a variety of colours, come studded with sequins and wholesale for less than US$20 each.

Another Hong Kong supplier specialising in belts is Barry Wong, whose Uber Ltd company works with popular brand Moussy and other Japanese customers.

"Our biggest challenge with the Japanese market is learning how to communicate with customers," Wong admitted, noting that often the designers are not clear on exactly what they want.

"They don't send us a specific design but rather tell us 'the feeling' they're looking for and it is up to us to interpret that, send them samples, get their reaction and make adjustments," Wong explained, adding that Uber's most popular item this year is a line of vintage-style leather belts, with unit prices ranging from US$10-20 and up.

One of the most popular items at the International Fashion Fair has always been bags, with a line of homegrown top-quality leather attachm cases best-in-show at US$500.

The businessman's small "second bag", sometimes referred to as the "man purse", remains a popular accessory for younger professionals. Generally leather, design features include inside pouches for coins and keys, PDAs, mobile phones and train or bus passes.

For the ladies, casual bags in synthetic materials, with bright and colourful designs could be had for US$20 or less. Meanwhile, the top end of this market continues to be dominated by elite European brands.

The continuing trend towards "green" or eco-friendly products was evidenced by a number of exhibitors - noteworthy was an engaging display by a local manufacturer that is using American-grown organic cotton.

The Japanese "Evergreen" brand attracted attention with light jackets, made in China of waterproof yet breathable materials including recycled cotton.

These booths gave careful attention to presenting the products' back story, utilising, for example, documentary photographs, AV presentations and raw material displays.

While this remains a specialised market, there is clearly growing interest in eco-friendly clothing and accessories, and some Japanese consumers are willing to pay a premium to acquire such products.

All in all, there was a good deal of design innovation at this International Fashion Fair, proving that although the heady days of the economic bubble period are long gone, the Japanese fashion market remains healthy.