Furniture to Japan

(Last updated: 29 Oct 2008)

Trends and opportunities

The market

The Japanese furniture and furnishings industry had sales of ¥3.3 billion in 2007. The largest Japanese furniture and furnishings retailer, Nitori, accounted for just over six percent of the total value of sales in 2007, but held a 17 per cent share of total selling space of furniture and furnishings stores.

Despite rising materials costs leading to price increases, Nitori has, by contrast, cut prices to compete on a value-for-money footing. As Nitori develops approximately 70 per cent of its products in-house, this allows the company to keep prices low despite rising materials costs.

International furniture and furnishings giant, IKEA, re-entered Japan, opening its first store in Funabashi in April 2006. IKEA opened a second outlet in September 2006. The company plans a total of four to six stores in Japan. Similar to many of its outlets outside Japan, the stores will host cafés to complement its large shopping area.

Sales of furniture and furnishings in Japan are expected to increase slightly over the next five years, even though consumers may become less willing to purchase luxury products due to deteriorating economic conditions and price increases related to rising materials costs. The increasing number of single and two-person Japanese households will assist in stablising demand for furniture and furnishings due to the rapidly ageing society in Japan.

Furniture and furnishings store forecasts between 2007 and 2012:
 

	2007	2008	2009	2010	2011	2012
Sales (billion yen)	3,343	3,353	3,366	3,383	3,404	3,427
Outlets	55,453	55,064	54,788	54,678	54,555	54,500
Selling space (1,000sqm)	11,830	11,889	11,854	11,783	11,665	11,513

(Source: Official statistics, trade associations, trade press, company research, trade interviews, Euromonitor International estimates)

There are a number of developments:

• Increased price competitiveness in what is an increasingly price-sensitive deflationary environment.
• More Japanese furniture manufacturers purchasing Original Equipment Manufacturers (OEM) produced furniture from overseas companies to remain cost competitive.
• Greater number of Japanese furniture manufacturers are forming strategic alliances with overseas counterparts to complement existing product lines.

There is also increasing Japanese consumer and industry interest in legged furniture, such as dining-room tables, chairs, sofas, beds, and dining-room cupboards. Overseas manufacturers mainly produce legged furniture whereas domestic manufacturers mainly produce storage furniture.

The emergence of new players engaging in furniture imports, such as furniture wholesalers, furniture retail chains, large-scale furniture stores, and furniture manufacturers is also changing the furniture industry in Japan.

Industry organisations such as the International Development Association of the Furniture Industry of Japan expect furniture imports to keep increasing.

Competitive environment

Asian furniture manufacturers tend to supply low to medium-priced furniture for the Japanese market, while European and North American manufacturers supply the medium to high priced end of the market.

Japan's furniture imports divided into HS product codes and ranked by country from 2005-2007 are as follows:

(Units in billions of Japanese yen)
 

HS Code 9401:  Seats (Except Barber, Dental, Etc), and Parts

 

Rank	Country	2005	2006	2007
1	China	79.074	97.329	117.602
2	Mexico	20.338	23.434	29.320
3	Thailand	15.959	14.975	13.742
4	United States	12.793	13.345	10.136
5	Italy	11.132	11.316	9.848
35	Australia	0.107	0.1222	0.084
	Total	191.503	216.892	237.760

HS Code 9402:  Medical, Surgical, Dental or Veterinary Furn etc

Rank	Country	2005	2006	2007
1	Germany	1.910	1.701	1.525
2	US	1.226	1.608	1.255
3	China	0.492	0.605	0.924
4	UK	0.506	0.709	0.809
5	Indonesia	0.223	0.315	0.294
22	Australia	0.018	0.011	0.084
	Total	5.377	6.038	5.965

9403: Furniture Nesoi and Parts Thereof

Rank	Country	2005	2006	2007
1	China	112.468	125.405	130.608
2	Vietnam	20.275	23.130	25.197
3	Thailand	19.955	20.880	20.441
4	Taiwan	20.705	20.314	19.113
5	Indonesia	15.737	17.066	18.328
25	Australia	0.274	0.230	0.248
	Total	252.671	271.328	279.055

Rank	Country	2005	2006	2007
1	China	35.151	40.104	38.064
2	Thailand	4.533	4.757	4.636
3	Taiwan	3.928	4.044	3.605
4	US	3.191	3.370	3.391
5	Italy	2.752	2.566	2.890