Agreement with EU
On 1 February 2019, a new trade agreement between the European Union and Japan (Economic Partnership Agreement – EPA) came into force, which has sharply reduced barriers and tariffs on goods exported between the two. For European companies, this is an extraordinary opportunity to expand their borders to such an interesting market as Japan.
The 3rd largest economy in the world, a very advanced country with 126 million inhabitants and a high purchasing power. A special predilection for high quality, and especially if they are fashion items (clothing, footwear, handbags etc) of European brands, make it an ideal market.
Leather goods in Japan
As an example, we will take a closer look at the leather goods sector (mainly handbags), which has very good prospects.
Since the 1990s, local production has been steadily declining and in fact, in 2016 (with 4.06 billion euros) it was only 1/4 of what it was in 1991.
Nevertheless, the Japanese consumer continues to demand leather goods, as the figures show. Compared to the ’90s, imports have increased by around 50% to a figure of 3.83 billion euros in 2018.
In 2017, 78.2 % (by value) of leather handbags were imported, with the small remainder being locally produced.
EU exports to Japan
Continuing with the leather goods (handbags) sector, it should be noted that demand is very important in the high-value product segment.
For that reason, 3 European countries stand out in particular: Italy, France and Spain, which together account for 67% (by value) of all handbags that Japan imported in 2018.
The overall ranking is led by Italy with 42%, followed by France with 21%, and in fifth place is Spain with a more modest 4%. In fourth and fifth place are Vietnam (11%) and China (9%), albeit with low-priced products and high volumes.
Some keys to the market
- – Traditionally, handbags were bought for various types of ceremonial events and as gifts.
- – Japanese women are increasingly entering the labour market, and their spending possibilities have increased, without being dependent on any special event.
- – A significant percentage of sales are to tourists (especially from China and other Asian countries), who like to visit Japan and shop.
- – High quality, country of origin, prestige and brand image are key elements for success in this market.
Spain has very good design and high quality in the manufacture of leather goods. Our small market share, compared to Italy and France, suggests that with a little effort in brand image and marketing, there are great possibilities for growth.
All this, together with the progressive reduction of barriers and tariffs thanks to the new trade agreement (Economic Partnership Agreement– EPA), make Japan an opportunity market to take advantage of.
Should your company be interested in this market, IO Consultorescan provide you with support and advice. Contact us for more information.