Austrade Tokyo

Austrade Tokyo business development manager Amane Kaneko offers exporters the low down on the Japanese TCF market

WHAT YOU NEED TO KNOW
Japan is a mature and sophisticated market for apparel items and Japanese shoppers are among the most discerning in the world. Tokyo is Asia's fashion hub and this is reflected in the retail landscape which encompasses all the major global luxury brands to very inexpensive domestic brands such as Uniqlo.

Australian brands such as Billabong, Quicksilver and Roxy are placed in the middle market, while Ksubi, 18th Amendment and Helen Kaminski are recognised as higher-end brands.

BUSINESS OPPORTUNITIES
The Japanese apparel market is the second largest in the world, after the US (at 16.4 trillion yen in FY 2004 according to the Ministry of Economy, Trade and Industry), and extremely competitive. However, sales of apparel items are estimated to have fallen approximately 1 per cent year-on-year in 2007 according to

Euromonitor Database, and volume sales are also expected to drop slightly. This reflects the current economy with consumers being more careful with their spending. Local industry media forecast the apparel industry will continue to shrink for some time. However, stronger growth is expected for apparel accessories as well as clothing using softer and/or lighter material.

Select shops are keen to take up new brands and 30 to 50 per cent of the brand mix usually changes within a year. This means that the average import brand is likely to have a lifespan for about 2-3 years at a select shop. Therefore import brands must keep ahead of trends while maintaining the design edge that characterises the brand.

The main competition for import brands is from Japanese manufacturers. Expectation regarding quality is amongst the highest in the world and attention to detail is highly appreciated. Manufactured in China is not an issue - many Japanese manufacture there as well as globally recognised brands under license, however, quality vis-à-vis price will be closely examined.

Australian brands are gradually making their way into the market - Australian brands gaining popularity are mostly in the men's and women's streetwear segment.

DO YOUR HOMEWORK
 All goods attract a 5 per cent Consumption Tax. For exact custom duties applicable to specific products, please look up the Japanese Customs Agency website: customs.co.jp/english/index.htm.

 Rule of thumb is that imported Australian brands usually cost about 3.5 times the wholesale price - this includes freight costs, the importer's cost and mark-up at retail.

DEALING WITH TRADE
Select stores will purchase directly from brands, but department stores work on a consignment basis and won't purchase directly, so agents or distributors are required. Japanese buyers prefer to deal with known agents, distributors and suppliers; getting attention through cold calls is hard and can be frustrating. Austrade is able to assist on a fee-basis. If buyers ask for more information, make sure it is sent through.

Building a reputation for responding in a timely manner is appreciated; if you are not able to respond immediately, it is recommended to send an acknowledgment of receipt of communication and to advise the buyer when a full response can be provided.

By Amane Kaneko