China and Japan are two dynamic country markets with which you may have prior trade – particularly importing experience. In late September, HECNA is offering an opportunity to conduct business in the reverse direction through exporting.
Each of these critical Asian markets presents unique growth trends for you to be aware of and try to capture. As with all market entry, there are market challenges to address with the opportunities. Let’s review the demand for imports from the U.S. to date.
World Trade Atlas ® GTIS
Analysis: Trade Resources Ltd.
As a point of comparison, for the period 2010 to 2012, U.S. global Housewares exports increased 12.6% to $4,122.7 million. During the same period, exports to China and Japan rose 31.5% to nearly $178.5 million. Broken out, China increased over 25% to $ 68.5 million while Japan increased over 35% to $110.0 million. Their combined rate is higher than any other global region in 2012.
(Note that these figures only capture sales and products being shipped directly from the U.S. Direct import shipments from locations outside of the U.S. are not reflected in this data.)
With respect to China by housewares category, bakeware exports soared 62%, household electrics increased nearly 41%, personal care items climbed almost 9%, space organizers increased 23%, tabletop added 20%, and cookware declined nearly 22% over the two year period.
Japan also turned in very good results as bakeware exports rose 7%, household electrics soared nearly 57%, space organizers increased almost 48%, tabletop grew 51%, but cookware dipped 13% and personal care decreased nearly 3%.
In terms of market share of exports, both countries’ shares are growing. Currently, Japan represents 2.7% and China 1.7% of U.S. housewares exports.
The graph below shows the respective market share for exports by geographic region. Asia is broken out so that China-Japan equals 4% while “Other Asia” equals 7% of the world total. Though the China-Japan share may seem rather low; when it is compounded by the current growth rate, the outlook appears very favorable for developing your export plans.
Some of the leading exports to China and Japan may be the same or similar. However, there are differences that should be noted. By category and HS code, some of the leaders are:
Bakeware
HS 3924100002…..Tableware and Kitchenware of Plastic (China & Japan)
HS 7013490000…..Other Table or Kitchen Glassware nesoi (China)
HS 7323930010…..Stainless Steel Cooking and Kitchenware (Japan)
Cookware
HS 7013490000…..Other Table or Kitchen Glassware nesoi (China)
HS 7323930010…..Stainless Steel Cooking and Kitchenware (Japan)
HS 7323990000…..Table, Kitchen or Other Household Articles and Parts nesoi of Iron (not cast) and Steel (not stainless) Not Enameled (China)
HS 7615106000…..Aluminum Cooking and Kitchenware, not cast, Other than Scourers or Polishing Pads, and Parts (Japan)
Household Electrics
HS 8516710000…..Electric Coffee or Tea Makers, Domestic (China)
HS 8508110000…..Vacuum Cleaners with Self-Contained Electric Motor of a Power < or = 1500 W & having a Dust Bag or Other Receptacle Capacity < or = 20 Liters
(Japan)
HS 8516290000…..Electric Space Heating Apparatus & Soil Heating Apparatus nesoi
(China)
HS 8509400020…..Electric Food Mixers Including Blenders, Domestic (Japan)
Personal Care
HS 9019102000…..Mechano-Therapy Appliances and Massage Apparatus, Parts and Accessories (China & Japan)
HS 9603210000…..Toothbrushes, Including Dental-Plate Brushes (China)
HS 9615190000…..Combs, Hair-Slides and the Like nesoi (Japan)
Space Organizers
HS 3923100000…..Boxes, Cases, Crates & Similar Articles of Plastic (China & Japan)
HS 3924905500…..Household Articles & Toilet Articles of Plastic, nesoi (China)
HS 4202927000…..Containers, nesoi with Outer Surface of Plastic Sheeting or of Textile Materials (Japan)
Tabletop
HS 3924100002…..Tableware and Kitchenware of Plastic (China & Japan)
HS 7013490000…..Other Table or Kitchen Glassware nesoi (China)
HS 8211920001…..Other Knives having Fixed Blades (Japan)
As previously mentioned, there are market challenges in addition to opportunities. Your prior experience should help to determine the most suitable strategy to employ when developing China and Japan for exporting. Some market characteristics may be more apparent than others.
For example, the consumer base in China is rapidly growing among those who are considered wealthy and middle class. These consumers may view shopping at retail as a hobby and generally have discriminating tastes. They tend to be brand conscious. Kitchen gadgets are a popular gift item. Over 200 urban areas have 1 million or more people, yet the top tier cities are best to target for potential retail distribution as retail is not well established in ‘smaller’ cities. Online commerce is also taking off in popularity. Yet with all this growth potential, you will need to be protective of your valuable intellectual property rights. Be prepared to negotiate on price allowing good room for margins.
Japan presents an aging market that appreciates quality goods and increasingly is seeking convenience in product and service offerings. Consumers like branded items for gifts. Perhaps more importantly, this highly-literate population seeks detailed marketing information and evidence of reliability and health and safety claims ascribed to products. With more women in the workforce, a close proximity to retailers for home items and foodstuffs has become more desirable. Healthcare and health related services are significantly increasing expenditures for Japanese consumers.
In summary, China and Japan present very good opportunities for HECNA members. Be prepared with lots of product information, translated business cards and patience, and you should have a memorable and rewarding time.
Report and analysis by: Laura Spingola, Trade Resources Ltd., Chicago, IL
+1.312.939.5030 / LSpingola@TradeResources.com
