Apparel World Market: Export
Abstract
Due to the success of companies such as Dooney & Burke, Coach, and Fendi, we will adopt their marketing strategies and export our line of leather handbags to Japan. In order to stay competitive, we plan to make our line exclusively for the Japanese market, as Japan has a lucrative market known for their love affair with brand-name luxury goods and, statistically, most Japanese women own pieces by Louis Vuitton, Gucci, Chanel, Prada, and other designer labels. As well as exclusivity, our products will have the added advantage of the latest trend for being environmentally friendly and sustainable by producing the handbags with only the leather from Eco-Hides, a local Californian eco-friendly tanning company.
Background Information
Japan, an island located in the North Eastern Asia, it includes more than 3,000 small islands; the four major islands are Hokkaido, Honshu, Kyushu, and Shikoku. Japan expends from the Sea of Japan to the Pacific Ocean, slightly smaller than California. It does not border with any countries but lies east of China, North Korea, South Korea, and Russia; it also lies north of Taiwan. Base on the most recent fact sheets released by the U.S. Department of State, Bureau of East Asian and Pacific Affairs, Japan consist the population of 127.3 million and the population growth rate at -0.139%; the majority ethnic group is the Japanese, with Korean at 0.5%, and Chinese at 0.4%. The education level is at 99% literacy and the work force percentage in services is 67.7%, in industry at 27.8%, and in agriculture at 4.5%. Japan has one of the strongest economies in the world, with an estimate of $4.384 trillion (official exchange rate) in Gross Domestic Product in 2007; it’s industrialized and free market economy has made it the second largest in the world.
The alliance between the United States and Japan initiated and strengthen base on the common interests and sharing values, including the stability in the Asia-Pacific region, the political and economical freedoms, support for human rights and democratic principles, and securing the welfare for the people of both countries and the international community. The economic relations between U.S. and Japan are mature, secure, and stable; the tremendous flows of trade, finance, and investment are towards the goal of two-way investment and raising the standard of living in both countries.
Japan is a major market for varieties of U.S. products, which the U.S. imports more than one quarter of all Japanese exports, U.S. exported products including chemicals, pharmaceuticals, entertainments, commercial aircraft, plastics, and medical supplies; Japan is also the largest foreign market for U.S. agricultural products, with exports valued at $10.1 billion in 2007, which is a 20% increase from the value in 2006. Japan is a country with a large trade surplus, with exporting goods being majority cars, electronic devices, and computers.
Apparel / Textile Trade Data
Base on the most recent data, collected by the Statistics Bureau, in 2007, the total amount of Japanese imports is USD $769,682,422,080 and the total amount of imported textile, with a percentage of 0.0605% of total imports, is USD $46,565,786,535.84; The total amount of Japanese exports is USD $883,294,453,512, and the total amount of textile exported, with a percentage of 0.0147% of total exports, is USD $12,984,428,466.63. In contrast, the amount of textile that was exported was incomparable to the imported value; thus, textile is not a strong industry for the Japanese.
Market and Consumption
As for purchasing power and buying habits, Japan, with one of the strongest economy in the world, has a known culture of being obsess with the luxury good, brand name luxurious accessories to be exact. As Chadha and Husband stated, “a staggering 94 percent of Tokyo women in their 20s own a Louis Vuitton piece. Other brands don’t do too badly either – 92 percent own Gucci, 57 percent own Prada, 51 percent own Chanel, and so the list does on” (p. 1). The Japanese’s passion for luxury goods has made Japan the biggest market for major luxury brands, holding over 40 percent of worldwide sales. Exclusivity is also a major role in the marketing strategy towards the Japanese, as for luxury brands, “’control’ is a key word in luxury marketing: restricting your brand’s availability and presence to maintain its life-giving exclusive image” (p. 90). Therefore, the harmony of a luxury brand with the latest trend of being sustainable and the exclusivity marketing strategy would definitely sold in the Japanese market.
Product and Competition
Leather handbags are a vast category of bags for both men and women. We plan to import leather handbags from the United States to Japan. Our price range will be from $75-$800; With the current exchange rate at 0.10503 Japanese Yen per US dollar, this would convert the retail price range to 7,142 - 76,169 Yen. Our handbags will consist mainly of eco-friendly leather, zippers and hardware. We will have a variety of textures on all of our bags i.e. suede, embossed, patent, bordered and imprinted. We plan to purchase the leather from Eco-Hides, an eco-friendly tanning company located in California.
We have narrowed down our competition to three main handbag companies such as Dooney & Bourke, Fendi and Coach. We chose these three competitors since they are targeting the Japanese target market. Dooney & Bourke is the latest in a wave of American accessories firms sailing into the Asian market. Dooney’s bags run the gamut from colorful printed pochettes for the teen set to the elegant zebra-print hobos for a more mature consumer. Bestsellers include the Chiara Bag in patent leather, which retails for $345, and the Hayden Bag, which sells for $500. Another one of our competitors is Fendi. Fendi is taking over the Japanese market using a different marketing tactic. y mixing hip-hop and fashion, Fendi hosted the hottest hip-hop-flavored fashion party in town. The price points for Fendi range from $200-$2,000. With Fendi being a LVMH Moet Hennessey Louis Vuitton-owned brand, the global launch of a range of leather goods has the brand surging toward $500 million in sales next year. Our last competitor would be Coach. Coach is best known for its “accessible luxury” handbags and Japan is Coach’s second-largest market, representing about 20% of the company’s $1.7 billion in sales in 2005. To further reinforce its exclusive image here, Coach included serial numbers in four limited-edition bags in the Japanese market so consumers can see how rare the bags are.
Tariff
In keeping with the abolishment of quota by the WTO in 1995, there is no quota for the number of leather handbags that the US can export into Japan
However, according to Japan's Tariff Schedule, there is a 14% tariff rate applied to “handbags, whether or not with shoulder strap, including those without handle: With outer surface of leather, of composition leather or of patent leather.”
Trade Agreement and Quota
There is no current trade agreement between the US and Japan. Despite this fact, Japan is a prominently active member of the WTO and the “Japan-US Partnership for Growth” is a crucial alliance for the two countries. Their economic relations are lucrative due to three factors, as per the Ministry of Foreign Affairs of Japan:
1. The US is Japan’s largest trading partner: Imports from the US account for 11.8% of Japan’s total imports
2. Japan is the 2nd largest non-NAFTA trading partner of the US
3. Japan is the 3rd largest job creator in the US
According to OTEXA, as of 11/14/08, domestic exports of American handbags and purses to Japan had reached 957,271 units. This translates to $27,112,742 worth of goods. In keeping with the abolishment of quota by the WTO in 1995, there is no quota for the number of leather handbags that the US can export into Japan.
Citation
Chadha, R. and Husband, P. (2006). The Cult of the Luxury Brand: Inside Asia’s
Love Affair With Luxury. London; Boston: Nicholas Brealey International.
Japan. (2008). U.S. Department of State. Retrieved November 20, 2008, from
http://www.state.gov/p/eap/ci/ja/index.htm
Japan-U.S. Economic Relations (Overview). (2007). Ministry of Foreign Affairs of
Japan. Retrieved November 22, 2008,
from http://www.mofa.go.jp/region/n-america/us/economy/relation0711.html
Statistics Bureau. (2008). Japan Monthly Statistics. Retrieved November 24, 2008,
From http://www.stat.go.jp/english/data/getujidb/index.htm
U.S. Domestic Exports for Selected Products. (2008). Office of Textile and Apparel (OTEXA).
Retrieved November 22, 2008, from http://otexa.ita.doc.gov/FLT/exports/cat192.htm
Due to the success of companies such as Dooney & Burke, Coach, and Fendi, we will adopt their marketing strategies and export our line of leather handbags to Japan. In order to stay competitive, we plan to make our line exclusively for the Japanese market, as Japan has a lucrative market known for their love affair with brand-name luxury goods and, statistically, most Japanese women own pieces by Louis Vuitton, Gucci, Chanel, Prada, and other designer labels. As well as exclusivity, our products will have the added advantage of the latest trend for being environmentally friendly and sustainable by producing the handbags with only the leather from Eco-Hides, a local Californian eco-friendly tanning company.
Background Information
Japan, an island located in the North Eastern Asia, it includes more than 3,000 small islands; the four major islands are Hokkaido, Honshu, Kyushu, and Shikoku. Japan expends from the Sea of Japan to the Pacific Ocean, slightly smaller than California. It does not border with any countries but lies east of China, North Korea, South Korea, and Russia; it also lies north of Taiwan. Base on the most recent fact sheets released by the U.S. Department of State, Bureau of East Asian and Pacific Affairs, Japan consist the population of 127.3 million and the population growth rate at -0.139%; the majority ethnic group is the Japanese, with Korean at 0.5%, and Chinese at 0.4%. The education level is at 99% literacy and the work force percentage in services is 67.7%, in industry at 27.8%, and in agriculture at 4.5%. Japan has one of the strongest economies in the world, with an estimate of $4.384 trillion (official exchange rate) in Gross Domestic Product in 2007; it’s industrialized and free market economy has made it the second largest in the world.
The alliance between the United States and Japan initiated and strengthen base on the common interests and sharing values, including the stability in the Asia-Pacific region, the political and economical freedoms, support for human rights and democratic principles, and securing the welfare for the people of both countries and the international community. The economic relations between U.S. and Japan are mature, secure, and stable; the tremendous flows of trade, finance, and investment are towards the goal of two-way investment and raising the standard of living in both countries.
Japan is a major market for varieties of U.S. products, which the U.S. imports more than one quarter of all Japanese exports, U.S. exported products including chemicals, pharmaceuticals, entertainments, commercial aircraft, plastics, and medical supplies; Japan is also the largest foreign market for U.S. agricultural products, with exports valued at $10.1 billion in 2007, which is a 20% increase from the value in 2006. Japan is a country with a large trade surplus, with exporting goods being majority cars, electronic devices, and computers.
Apparel / Textile Trade Data
Base on the most recent data, collected by the Statistics Bureau, in 2007, the total amount of Japanese imports is USD $769,682,422,080 and the total amount of imported textile, with a percentage of 0.0605% of total imports, is USD $46,565,786,535.84; The total amount of Japanese exports is USD $883,294,453,512, and the total amount of textile exported, with a percentage of 0.0147% of total exports, is USD $12,984,428,466.63. In contrast, the amount of textile that was exported was incomparable to the imported value; thus, textile is not a strong industry for the Japanese.
Market and Consumption
As for purchasing power and buying habits, Japan, with one of the strongest economy in the world, has a known culture of being obsess with the luxury good, brand name luxurious accessories to be exact. As Chadha and Husband stated, “a staggering 94 percent of Tokyo women in their 20s own a Louis Vuitton piece. Other brands don’t do too badly either – 92 percent own Gucci, 57 percent own Prada, 51 percent own Chanel, and so the list does on” (p. 1). The Japanese’s passion for luxury goods has made Japan the biggest market for major luxury brands, holding over 40 percent of worldwide sales. Exclusivity is also a major role in the marketing strategy towards the Japanese, as for luxury brands, “’control’ is a key word in luxury marketing: restricting your brand’s availability and presence to maintain its life-giving exclusive image” (p. 90). Therefore, the harmony of a luxury brand with the latest trend of being sustainable and the exclusivity marketing strategy would definitely sold in the Japanese market.
Product and Competition
Leather handbags are a vast category of bags for both men and women. We plan to import leather handbags from the United States to Japan. Our price range will be from $75-$800; With the current exchange rate at 0.10503 Japanese Yen per US dollar, this would convert the retail price range to 7,142 - 76,169 Yen. Our handbags will consist mainly of eco-friendly leather, zippers and hardware. We will have a variety of textures on all of our bags i.e. suede, embossed, patent, bordered and imprinted. We plan to purchase the leather from Eco-Hides, an eco-friendly tanning company located in California.
We have narrowed down our competition to three main handbag companies such as Dooney & Bourke, Fendi and Coach. We chose these three competitors since they are targeting the Japanese target market. Dooney & Bourke is the latest in a wave of American accessories firms sailing into the Asian market. Dooney’s bags run the gamut from colorful printed pochettes for the teen set to the elegant zebra-print hobos for a more mature consumer. Bestsellers include the Chiara Bag in patent leather, which retails for $345, and the Hayden Bag, which sells for $500. Another one of our competitors is Fendi. Fendi is taking over the Japanese market using a different marketing tactic. y mixing hip-hop and fashion, Fendi hosted the hottest hip-hop-flavored fashion party in town. The price points for Fendi range from $200-$2,000. With Fendi being a LVMH Moet Hennessey Louis Vuitton-owned brand, the global launch of a range of leather goods has the brand surging toward $500 million in sales next year. Our last competitor would be Coach. Coach is best known for its “accessible luxury” handbags and Japan is Coach’s second-largest market, representing about 20% of the company’s $1.7 billion in sales in 2005. To further reinforce its exclusive image here, Coach included serial numbers in four limited-edition bags in the Japanese market so consumers can see how rare the bags are.
Tariff
In keeping with the abolishment of quota by the WTO in 1995, there is no quota for the number of leather handbags that the US can export into Japan
However, according to Japan's Tariff Schedule, there is a 14% tariff rate applied to “handbags, whether or not with shoulder strap, including those without handle: With outer surface of leather, of composition leather or of patent leather.”
Trade Agreement and Quota
There is no current trade agreement between the US and Japan. Despite this fact, Japan is a prominently active member of the WTO and the “Japan-US Partnership for Growth” is a crucial alliance for the two countries. Their economic relations are lucrative due to three factors, as per the Ministry of Foreign Affairs of Japan:
1. The US is Japan’s largest trading partner: Imports from the US account for 11.8% of Japan’s total imports
2. Japan is the 2nd largest non-NAFTA trading partner of the US
3. Japan is the 3rd largest job creator in the US
According to OTEXA, as of 11/14/08, domestic exports of American handbags and purses to Japan had reached 957,271 units. This translates to $27,112,742 worth of goods. In keeping with the abolishment of quota by the WTO in 1995, there is no quota for the number of leather handbags that the US can export into Japan.
Citation
Chadha, R. and Husband, P. (2006). The Cult of the Luxury Brand: Inside Asia’s
Love Affair With Luxury. London; Boston: Nicholas Brealey International.
Japan. (2008). U.S. Department of State. Retrieved November 20, 2008, from
http://www.state.gov/p/eap/ci/ja/index.htm
Japan-U.S. Economic Relations (Overview). (2007). Ministry of Foreign Affairs of
Japan. Retrieved November 22, 2008,
from http://www.mofa.go.jp/region/n-america/us/economy/relation0711.html
Statistics Bureau. (2008). Japan Monthly Statistics. Retrieved November 24, 2008,
From http://www.stat.go.jp/english/data/getujidb/index.htm
U.S. Domestic Exports for Selected Products. (2008). Office of Textile and Apparel (OTEXA).
Retrieved November 22, 2008, from http://otexa.ita.doc.gov/FLT/exports/cat192.htm