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Housewares Focus on China & Japan

August 28, 2013

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.

china japan graphics 1
Source of Raw Data: U.S. Dept of Commerce, Bureau of the Census
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.

china japan graphics 2

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

Filed Under: All Posts, Global Opportunities Tagged With: China, HECNA, housewares, IHA, International Housewares Association, Japan

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