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
30	Australia	0.014	0.031	0.022
	Total	58.950	64.651	62.960

(Source: Japan Customs Statistics) 

Tariffs, regulations and customs

Industry standards

Safety regulations and laws are applicable to furniture imports to Japan. Information on industry standards and labelling under the Household Goods Quality Labelling Law is also available.

For further information contact:

The Products Safety Division
Commerce and Information Policy Bureau
Ministry of Economy, Trade and Industry
Tel: +81 3 3501 1511 Ext. 4301

Marketing your products and services

Market entry

There are a number of important considerations when developing a market entry strategy for Japan. Find an import agent who can promote your products locally according to appropriate distribution channels, develop a strong relationship with them through regular visits and communication. Researching and understanding standards, regulations, safety issues and marking requirements is also very important.

To successfully enter the Japanese furniture market, consider the following:

• Regularly visit Japan and rigorously follow-up on your visits
• Promptly respond to your (potential) clients’ requests
• Bring company and product brochures and material samples and have them translated into Japanese
• Participate in an in-market promotion such as the International Furniture Fair Tokyo. This is a major annual furniture trade show in Japan
• Be prepared to modify the size of your products to fit in Japanese houses, as they are usually a lot smaller than the average Australian house
• Always be aware of Japanese consumers’ latest trends in furniture

Japan’s e-business market is growing and we may be able to see more business-to-business (B2B) and business-to-consumer (B2C) sites for furniture sales in the future. It will be essential for Australian suppliers of furniture to be represented in Japan, for instance by an importer to take part in such online business. Direct participation in e-business in Japan from overseas is still very much a challenge mainly due to the language barrier.

Distribution channels

Most of the home-use furniture is sold through:

• Furniture retailers
• General merchandising stores
• Department stores

However, the Internet, mail order, home centres (do-it-yourself stores), and interior shops are alternative channels for retail distribution.

Furniture sales at home centres and interior shops have grown over the last few years. The distribution route for imported furniture in Japan can take many different forms and layers depending on who is involved in exporting and importing. Exporters could be overseas manufacturers or overseas-based exporters. Importers could be:

• Domestic furniture manufacturers
• Domestic furniture wholesalers
• Trading companies specialising in furniture imports
• General trading companies
• Retail stores

Links and industry contacts

Furniture–related resources

International Development Association of the Furniture Industry of Japan (IDAFIJ) www.idafij.com/IDAFIJ/index.html
International Furniture Fair Tokyo - www.idafij.or.jp

Australian resources

Japan External Trade Organization (JETRO) Sydney - www.jetro.go.jp/australia 
Level 25, Gold Fields House
1 Alfred Street
Sydney NSW 2000
Tel: +61 2 9276 0100

Japan External Trade Organization (JETRO) Melbourne - www.jetro.go.jp/australia/melbourne/index.html
Level 21, 101 Collins Street
Melbourne VIC 3000
Tel: (03) 9654 4949
Fax: (03) 9654 2962

Contact details

The Australian Trade Commission (Austrade) is the Australian Government’s trade and investment development agency, operating as a statutory agency within the Foreign Affairs and Trade portfolio.

Austrade assists Australian businesses contribute to national prosperity by succeeding in trade and investment, internationally, and promoting and supporting productive foreign investment into Australia.

Austrade:

• Delivers services that assist Australian businesses initiate, sustain and grow trade and outward investment.
• Promotes Australia as an inward investment destination and, with the States and Territories, supports the inflow of productive foreign direct investment.
• Administers the Export Market Development Grants scheme.
• Undertakes initiatives designed to improve community awareness of, and commitment to, international trade and investment.
• Provides advice to the Australian Government on its trade and investment development activities.
• Delivers consular, passport and other government services in designated overseas locations.

A list of Austrade offices (in alphabetical order of country) is available.

More information

For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au