Japan’s Apparel Sourcing Patterns

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(The full article is available HERE)

Key findings:

First, the total value of Japan’s apparel imports has been growing steadily in line with consumption patterns. Between 2010 and 2018, the value of Japan’s apparel imports enjoyed a 2.7% compound annual growth rate, which was lower than the US (3.4%), but higher than the EU (1.9%) and the world average (1.3%) over the same period.

Second, while China remains the top supplier, Japanese fashion brands and retailers are also diversifying their sourcing bases. Similar to their counterparts in the US and EU, Japanese fashion brands and retailers are actively seeking alternatives. Imports from Vietnam, Bangladesh, and Indonesia have been growing particularly fast, even though their production capacity and market shares are still far behind China.

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Third, Japanese fashion companies are increasingly sourcing from Asia. As of 2018, only 7.5% of Japan’s apparel imports came from non-Asian countries (mostly western EU countries), a notable drop from 11.4% back in 2000. A good proportion of Japan’s apparel imports from Asia actually contain fibers and yarns originally made in Japan. For example, it is not difficult to find clothing labeled ‘Made in China’ or ‘Made in Vietnam’ that also includes phrases such as ‘Using soft, slow-spun Japanese fabric’ and ‘With Japanese yarns’ in the detailed product description.

Fourth, overall, Japan sets a lower tariff barrier for apparel than other leading import countries. As of September 2019, there were around 15 FTAs and TPAs in force in Japan, whose members include several 1st tier apparel supplying countries in Asia, such as Vietnam, Bangladesh, India, Indonesia, and Cambodia. Most of these trade programs adopt the so-called “fabric-forward” rules of origin (also known as “double-transformation” rules of origin). Additionally, Japan is actively engaged in negotiations on a trilateral free trade agreement with China and South Korea, and the Regional Comprehensive Economic Partnership (RCEP), which involves Japan, South Korea, China and members of the Association of Southeast Asian (ASEAN) countries. Once reached and implemented, these trade agreements will provide new exciting duty-saving sourcing opportunities, including from China, the top apparel exporter in the world.

Author: Sheng Lu

Professor @ University of Delaware

13 thoughts on “Japan’s Apparel Sourcing Patterns”

  1. After reading the article and the key findings, it is very interesting to see how Japan is sourcing its apparel product. Something really interesting that stood out to me was how Japan is starting to diversify its sourcing tactic by staying in Asia but not solely relying on one country to produce its apparel products. The fact that only 7.5% of Japan’s apparel comes from non-Asian countries and that often times textiles are exported to other countries to produce apparel and then imported back in to Japan to sell has similar qualities to NAFTA and the keeping of the textile and apparel industry within more of a localize economy. It will be very interesting to see what the future holds for Japan’s apparel industry.

    1. I think Japan’s shifting apparel sourcing strategy largely reflects the flying geese pattern. Notably, even though Japnese companies are sourcing less from China due to the cost concerns, they are sourcing more from other neighboring Asian countries. As a result, apparel production and the supply chain stays in Asia. You may also follow a new Asia-based mega-free trade agreement that will be reached soon: https://footwearnews.com/2019/business/trade/regional-comprehensive-economic-partnership-what-to-know-1202871750/

  2. After reading the article, I found it very interesting how Japan is sourcing from other asian countries as the cost in China increases. This is a reflection of the flying geese model because not only China, but also other neighbor countries are becoming strong involved in the textile and apparel industry or even becoming a key industry leader. It is also interesting to see how Japan uses its own yarns and fibers while manufacturing garments in diversified bases.

  3. After reading this article I have come to find it extremely interesting that even though Japan imports a lot of its textiles, they contain Japanese made fibers. This is what we learned about earlier in the semester when clothing labels now contain made in labels from multiple nations. It is also interesting to me that many nations are looking to Japan as an alternative to sourcing because of rising costs in its neighboring country China. Another reason many brands look to source from Japan is their lower trade costs. It is very economical of japan as a growing major sourcing nation to set lower trade barriers in order to encourage new business from emerging nations with large populations.

  4. The key findings as detailed in the article only demonstrate how Japan has been able to increase growth and improve the retail fashion industry in the country in spite of a relatively slow growing international economy. First, it was mentioned that the Japanese apparel market has a slow growth, but increasing, nonetheless. I think this is attributable mostly to the second point, which is that the large number of brands from the country are also big players in the global apparel industry. With the fast and steady growth of e-commerce and online retailing, Japanese brands are able to maintain their consumption culture of being available in brick-and-mortar stores. I think that, along with all these points, Japan’s sourcing strategies significantly help in reducing their production costs, thus adding to the country’s apparel industry growth. By exploring other countries as sources of materials, Japan has been able to gauge which will yield better qualities for cheaper prices.

  5. After reading this article, I found it extremely interesting how even though their production capacity and market shares are still behind China, imports from Vietnam, Bangladesh, and Indonesia have been growing particularly fast. This statement has me wondering if these countries have the potential to surpass China’s production, or even become hand in hand with them. I also found it interesting how a good proportion of Japan’s apparel imports from Asia actually contain fibers and yarns originally made in Japan. This touches base on our previous discussions on clothing being made in different nations.

  6. After reading this article, I can see some similarities and some differences of how Japan’s apparel sourcing strategies compare to the U.S. Both countries have some movement and inclination of moving a lot of their work out of China. Both countries are also seeing sourcing from other Asian countries like Vietnam and Bangladesh. A difference here is that the U.S. has been sourcing from Asian countries for a long period of time, and Japan is just now starting to diversify their sourcing options. I think it’s very interesting that Japan has very low tariff barrier for apparel and they are also looking into a free trade agreement with surrounding Asian countries. This is different in comparison to some U.S. retailers trying to get everything done in the U.S. and still have high tariff on apparel imports. Overall, it’s very interesting to see two developed countries taking different actions on the same topic.

  7. I found it very interesting to read about Japan’s sourcing strategy, as it seems like they are continuously evolving it to better improve themselves and their industry which they have been successful out as per the findings in the article. I find it very interesting that they have such a high number of FTAs and TPAs and an overall low tariff barrier, which seems to be put in place to help them do business with a multitude of countries. I also am curious as to why they have made moves to source from Asia more, as their percentage of sourcing from outside of Asia has seen a drop. I hope that part of this decision was based on trying to be more sustainable and environmentally conscious by lowering the amount of travel a product does before it hits the customers hands. As the article also notes, Japans imports actually do have fibers from Japan itself which makes me wonder just how much the components of a product are traveling around the globe to be made and then how much the product itself travels. I hope that part of the decision to source from Asia is due to physical distance and made to cut back on the amount of transport the product goes through.

  8. This article clearly outlined the great position Japan is in when it comes to sourcing and global T&A trade. Japan has positioned itself as a global leader in technology, which translates to their GDP and sourcing strategy. Japan is able to take advantage of cheap sourcing options and regional trade benefits at the same time by trading with countries such as China and Vietnam. Japan has also been wise in keeping trade barriers low with its neighbors, making it a country that is an import destination for many Asian countries. Japan has a keen understanding of what it is capable of, and does not try to prevent manufacturing jobs from leaving their country, and instead capitalizes on their technological advantage to supply jobs. It will be very interesting to see to what heights Japan grows to in the coming years, as they are poised to experience a great amount of growth.

  9. It’s interesting to see Japan’s sourcing patterns throughout this article. I was shocked that the annual growth rate for apparel imports was higher in Japan than in the EU. It does not surprise me that Japanese fashion brands and retailer are expanding their sourcing bases to developing countries as this seems to be a trend for many countries. While China remains the top supplier, other developing countries are clearly growing quickly, and this explains Japan’s increase in sourcing from Asia compared to the past. I believe that Japan is benefitting from setting lower tariff barriers for apparel and this will continue to positively affect their import rates. Their trade agreements within Asia explains why only 7.5% of their apparel imports came from non-Asian countries. This is similar to the success that the U.S. has with NAFTA and CAFTA. It seems that staying in the same continent when it comes to sourcing is quite beneficial. I believe that Japan is headed towards a positive future in their T&A industries and I look forward to seeing what awaits them in the future.

  10. I read this article because in my opinion, Japan, as Asia’s most fashionable country, we hardly mention it in class. Thus, I am interested in Japan’s sourcing pattern. I resonate with this reading due to my experience. I have a lot of Japanese brand clothes. I think many clothes are cost-effective with creative and trendy design in Japan. Even if I bought clothes in Japan, there are a lot of tags showed “Made in China”. As mentioned in this reading, China remains the top supplier for Japan. and also, I had almost the same tag in my Japanese skirt as the picture showed above. Even if it says “Made in China”, “Japanese yarns” are indeed mentioned in the details. Meanwhile, these clothes cost about $ 100 or more, so I found that the supply of high-quality or high-value clothes is mainly from China. Thus, it really makes me think about the “Flying Geese Model” in Asia we have learned. Japan is in the Tier1 to be a supplier of capital and textile machinery and apparel import market. Even though Vietnam, Bangladesh, and Indonesia have been growing particularly fast, they lack stronger production capability to compete with China.

  11. The apparel sourcing patterns adopted by Japan depicted in this article are interesting to say the least. Notably, the country is making the best of its strategic teams in T&A. Japan has benefited from non-reliance on one country for raw materials, which is a good move that will ensure they never lack supply. The shifting apparel sourcing approach (flying geese model) is one that has enabled the nation to maintain its operations in Asia despite avoiding sourcing from countries within their geographic location that are expensive (China). Another interesting find in this article is that the country uses its own fibers in the products made despite sourcing its textiles from elsewhere. In my opinion, a person in the T&A industry can learn a lot from observing the practices utilized in Japan, aside from the sourcing patterns used.

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