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B-1. Bags
1 Bags
1. Market Conditions in Japan
(1) Definition of Category
This section encompasses all varieties of bags including luggage (trunks, suit-cases, brief-cases, etc.),
handbags, and purses and other types of accessory bags. In official trade statistics, bags are classified ac-
cording to material of outer surface into “leather” (including composition leather or patent leather), “plastic
sheeting or textile,” and “other materials.” HS numbers are shown below.
Commodity HS No. Material of outer surface
Luggage 4202.11, 91 Leather, composition leather or patent leather
(Trunks, suit-cases, vanity-cases, executive-cases, 4202.12, 92 Plastic sheeting or textile
brief-cases, school satchels and similar containers) 4202.19, 99 Other
Handbags 4202.21 Leather, composition leather or patent leather
(Including those without handle, whether or not 4202.22 Plastic sheeting or textile
with shoulder strap) 4202.29 Other
Accessory bags 4202.31 Leather, composition leather or patent leather
(Articles of a kind normally carried in the pocket or 4202.32 Plastic sheeting or textile
in the handbags) 4202.39 Other
Note 1: Composition leather includes a certain portion of leather scrap material.
Note 2: Patent leather is leather to which has been applied a coating of varnish or lacquer, or plastic sheeting to give the leather a
shiny surface.
Note 3 :The distinction between luggage and handbags is becoming increasingly blurred as more products appear that cannot be
readily classified as one or the other.
(2) Market Conditions
The Japanese bag market is broadly categorized into the mass-market products priced around ¥1,000 to
¥5,000, in which imports from China and other Asian countries are sweeping over the market with their low
prices and usefulness, and above that the domestic brand products whose price range of ¥10,000 to ¥30,000,
then the foreign brand products with the price range of ¥20,000 to ¥70,000, and the European luxury brand
products pricing range of ¥70,000 or more. In recent years, low-cost good-quality bags made in China have
attracted overwhelming consumer support. At the same time, expensive luxury brands have seen their sales
in Japan grow steadily from year to year. The losers have been products in the middle price ranges (mainly
domestic products) with few distinguishing features. As Japanese manufacturers have increasingly shifted
production and processing sites to China, the decrease in shipments of domestic products have exceeded the
increase in imports, resulting downward trend in overall bag market in Japan. (see Fig. 8)
A distinctive trait of the Japanese fashion market is that demand for luxury brands is sustained not merely
by the wealthy but by ordinary young women in their 20s and 30s. Survey research indicates that about half
of all women in their 20s in the Tokyo metropolitan area own a name-brand luxury handbag. Commonly
mentioned reasons include the reward themselves (so called “gift to myself”), name brand preference and
personal satisfaction with the brand, and confidence in product quality and fashion appeal. These results
show that preference for luxury brands is not based on any short-lived cachet. Rather, it reflects comprehen-
sive strength of consumer confidence of product quality, sophisticated design, superior brand image, beauti-
ful and functional decorative details, and attentive after-care services.
Market leader Louis Vuitton (France) set up its Japanese subsidiary in 1978, and since that time the com-
pany has seen its sales in Japan grow continuously. In 2000, Louis Vuitton became the first foreign brand to
break the ¥100 billion barrier. After the merger with Celine Japan in 2003, Louis Vuitton changed its trade
name to LVJ Group, and marked its record high sales of ¥152.9 billion. (Though LVJ Group does not dis-
close its sales revenue since 2004, it is raising business results by acquiring Fendi Japan and Loewe Japan.
Now LVJ Group goes far ahead of Hermes Japan and Gucci Group Japan, whose sales revenues are esti-
mated to be at ¥50 billion something.) In addition, used brand-name product market is steadily growing by
appraising and buying up unused bags and reselling hard-to-find models at a market price. The fact that an
aftermarket exists for these products enhances consumers’ sense of the value of the brand as an asset for
themselves.
Each luxury brand company aggressively opens the large direct outlets after 2004 as well. It is, however,
also true that the upward momentum of domestic demand for luxury brands began slowing down. Consum-
Marketing Guide for ASEAN Exporters to Japan
42
B-1. Bags
ing expenditure of young women which sustained the brand popularity is diversified into the overseas trips
and the beauty treatments. It is apparent that their purchasing enthusiasm is a little bit slacking. Moreover,
the big problem is that the price range is becoming unreachable for young women because of the price in-
crease due to Euro’ appreciation of late. For example, Louis Vuitton has made its price system in public,
where it set the prices in Japan 1.4 times higher than those in France and the prices are revised by linking
them with the exchange market. As a result, the price increase in Louis Vuitton was repeated seven times
since February 2001 (including one-time price decrease), and the retail price as of February 2005 is a little
more than 40% higher than that in 2000.
Coach (U.S.) is one of the brands remarkably growing in the Japanese bag market of late. Their products
of main price range between ¥30,000 to ¥50,000 are very popular among women in their 20s and 30s as
“reachable high-class products.” Coach Japan, Inc. has increased the sales revenue 3 times more to ¥31.6
billion in three years by the fiscal year ended June 2004. It has dissolved a joint venture with Sumitomo
Corporation in July 2005 and made it its fully owned subsidiary and announced a plan to expand its sales
revenue to ¥80 billion in 2009. Recently, other brand companies are trying to increase the sales volume by
targeting this segment. For example, the latest products released by Louis Vuitton in June 2005 “Antigua
Line” are tote and shoulder bags all made by canvas cloth, in the lowest price range in Louis Vuitton starting
from ¥65,100. On the other hand, Gucci takes a strategy to enrich the line-up of high-class products (main
price is between ¥100,000 and ¥150,000) in order to target a high income segment who already posses many
luxury brand bags and seek the products other people do not have even in the same brand.
In a recent bag market, popularity of small handbag is fading away, and consumers tend to select
high-capacity bags such as tote bags, traveling bags, and rucksacks. In addition, bags that can be used 2-way
(tote & shoulder) or 3-way (plus diagonal wearing) by adjusting a strap, and that are set with the pouch bag
of the same design are popular, too. In order to satisfy consumers’ diversified and elevated needs, materials
are getting further diversified, and there are demands of products combined several materials such as syn-
thetic leather, canvas cloth, parachute cloth, nylon etc. to make them lightweight, handy, and functional as
well as with attractive design. As a result, except for the luxury brand’s stable items, trend of high-mix
low-volume production and shortening of product cycle are progressing more than ever. Another new trend
that has attracted attention is for adult men over 30 to carry leather casual bags and business bags, signaling
a possible change from the older pattern of women-only demand.
(3) Distribution System and Business Practices in Japan
The most common distribution channel for bags in Japan is from maker (or manufacturing-wholesaler) to
wholesaler to retailer and ultimately to the consumer. Major wholesalers such as Ace, SAZABY, Yoshida,
and Matsuzaki act as brand makers (manufacturing-wholesalers) and take initiatives in the market. They
plan its own products, organize and coordinate subcontractors to manufacture them, and sell them under its
own brands. However, even Ace, a biggest wholesaler, has sales revenue of only around ¥25.8 billion,
showing a significant difference with the overseas brand companies. At the end of 2004, Ace has terminated
the manufacturing license agreement with Samsonite (U.S.) after 40 year run. From now on Samsonite Ja-
pan will take responsibility to import and sell the products sold by U.S. head office. Also, SAZABY has
terminated a JV agreement with C.M.C. (France, brand name: Agnes B) in March 2005, which had been ef-
fective for 22 years. Future management strategy of these companies who gave up its main brand is drawing
attentions in the industry.
Fig. 1 Distribution channels for imported bags
Overseas manufacturers
Domestic manufacturers Importers
Wholesalers
Mail order Specialty stores Department stores, Other retailers
Mass merchandisers
Consumers
Marketing Guide for ASEAN Exporters to Japan
43
B-1. Bags
General wholesalers are categorized, depending on its main customers, into wholesalers for local regions,
for department stores, and cash-and-carry wholesalers. Non-brand products imported from China and
ASEAN follow almost the same distribution channel as the domestic products.
Luxury brand bags, on the other hand, are generally sold to department stores and specialty stores by
Japanese subsidiaries of the overseas manufacturer or by import agents. Recently, a number of large direct
outlet stores (megastores) opened in prestige locations and they have become beacons for projecting brand
image directly to Japanese consumers. Some department stores and GMSs order direct to foreign manufac-
turers. There are also “development imports” which are manufactured to Japanese specifications, or “paral-
lel imports” which are bought directly from retailers in other countries. Recently, the sales through the
Internet have been increasing, and some overseas brand companies have set up direct ordering systems un-
der which individuals or retailers can select the design, material and parts materials.
2. Trade Trends
(1) Import Trends in Japan
Imports of bags in 2004 reached 653.53 million units (up 4.0% from the year before) worth ¥380.85 bil-
lion (up 5.4%). Over the past two years, bag imports were on a decrease, and it appeared that imports had
near the saturation point. Nevertheless, imports moved back upward in 2004 and set a new all-time record
both on a value and a volume basis. Especially on a volume basis, China has an overwhelmingly lead as an
exporter of bags to Japan, accounting for 91.6% (598.65 million units). Not only having leading Japanese
makers and manufacturing-wholesalers shifted much of their production to China, but also medium-sized
makers have outsourced production to factories in China for survival. Some overseas bag makers also have
production sites in China and output is being shipped directly to Japan. (see Figs. 2, 4)
By category, main type in bag imports was luggage with outer surface of plastic sheeting (including artifi-
cial leather etc.) or of textile material, accounting for 74.0% (483.29 million units) of 2004 total import
volume, and 52.1% (¥198.56 billion) of total import value. Next leading types on a value basis were leather
luggage (¥45.1 billion) and accessory bags of plastic sheeting or textile materials (¥36.6 billion), all of
which finished above the previous year (see Fig. 3). Especially leather luggage showed strong growth to 1.8
times in the last five years.
Fig. 2 Trends in Japan’s bag imports
（¥ million） （¥ million）
500,000
300,000
400,000
Of plastic sheeting or textile
300,000 200,000
200,000 Of leather
100,000
100,000
Other
0 0
2000 2001 2002 2003 2004 (Year) 2000 2001 2002 2003 2004 (Year)
Value Volume
2000 2001 2002 2003 2004 2000 2001 2002 2003 2004
Luggage 24,464 30,395 36,413 40,424 45,064 6,717 7,195 8,558 9,404 11,355
Handbags 27,839 28,394 23,937 22,938 22,202 5,007 4,274 4,222 3,804 3,791
Leather
Accessory bags 31,747 33,790 31,729 34,797 36,633 27,994 27,438 27,636 27,061 27,622
Subtotal 84,050 92,578 92,080 98,160 103,899 39,717 38,907 40,417 40,269 42,769
Luggage 174,962 202,484 193,497 190,256 198,559 437,129 473,662 468,540 476,965 483,292
Plastic Handbags 33,919 37,738 30,808 33,574 34,654 21,735 19,195 19,292 18,303 18,503
sheeting
or textile Accessory bags 25,296 30,906 32,562 34,801 38,357 60,188 70,005 66,493 71,813 85,616
Subtotal 234,177 271,128 256,867 258,631 271,570 519,052 562,862 554,325 567,081 587,411
Luggage 3,518 4,538 4,387 3,935 4,533 8,071 9,365 13,307 11,436 13,164
Handbags 281 303 235 190 263 256 261 222 186 283
Other
Accessory bags 764 762 776 584 587 11,555 11,529 12,074 9,709 9,898
Subtotal 4,564 5,602 5,398 4,708 5,383 19,882 21,155 25,603 21,332 23,345
TOTAL 322,791 369,309 354,345 361,499 380,853 578,651 622,924 620,345 628,682 653,525
Units: value=¥ million, volume=1,000 units Source: Trade Statistics (Ministry of Finance)
Marketing Guide for ASEAN Exporters to Japan
44
B-1. Bags
In the booming imported bag market, only handbags remain stagnant, sinking from ¥27.8 billion (5.01
million units) to ¥22.2 billion (3.79 million units) over the past five years, which represent just about 40%
level of the peak year of 1996 (¥5.50 billion). Behind the trend is the fact that consumers are increasingly
fond of high-capacity and easy-to-use bags. The same is true for materials, where canvas cloths and other
types that are light in weight and have a high degree of flexibility for design are gaining popularity of late.
Fig. 3 Trends in imports of bags by category in 2004
Value Volume Average unit price
Yearly Yearly
Value Share Volume Share 2003 2004
change change
Luggage 45,064 11.8% 111.5 11,355 1.7% 120.8 4,299 3,968
Leather Handbags 22,202 5.8% 96.8 3,791 0.6% 99.7 6,030 5,856
Accessory bags 36,633 9.6% 105.3 27,622 4.2% 102.1 1,286 1,326
Plastic Luggage 198,559 52.1% 104.4 483,292 74.0% 101.3 399 411
sheeting Handbags 34,654 9.1% 103.2 18,503 2.8% 101.1 1,834 1,873
or textile Accessory bags 38,357 10.1% 110.2 85,616 13.1% 119.2 485 448
Luggage 4,533 1.2% 115.2 13,164 2.0% 115.1 344 344
Other Handbags 263 0.1% 138.6 283 0.0% 151.5 1,017 931
Accessory bags 587 0.2% 100.6 9,898 1.5% 101.9 60 59
Luggage (subtotal) 248,156 65.2% 105.8 507,812 77.7% 102.0 471 489
Handbags (subtotal) 57,119 15.0% 100.7 22,577 3.5% 101.3 2,543 2,530
Accessory bags (subtotal) 75,578 19.8% 107.7 123,136 18.8% 113.4 646 614
Units: value=¥ million, volume=1,000 units, yearly change=%, average unit price=¥ per unit
Source: Trade Statistics (Ministry of Finance)
(2) Principal Exporters to Japan and ASEAN’s Position
China has further established itself as a bag production site and accounted for sizeable 91.6% (598.65 mil-
lion units) of total import volume in 2004. Chinese products carry an average unit price (CIF basis) of just
¥306 per unit, which has helped China dominate the market. On the other hand, luxury brand products build
strong position in the market, which include France (average unit price of ¥19,034 per unit) represented by
Luis Vuitton and Hermes, and Italy (¥11,545) represented by Gucci and Prada (see Fig. 4). On a value basis,
three leaders of China (¥183.0 billion, 48.0%), Italy (¥75.5 billion, 19.8%) and France (¥73.6 billion,
19.3%) together accounted for 87.1%. When Spain, whose exports to Japan grow year after year, is factored
in, imports from EU as a whole made up 44.3% (¥168.6 billion) of total imports. This indicates that the im-
ported bag market is becoming further polarized, and the composition of China’s mass-market products
versus the luxury EU products becomes more apparent. Meanwhile, Coach (U.S.) internationally diversifies
its production sites into ten and several countries including China.
Over the past several years import value of China and EU stood nearly on a par. But in 2004, imports from
China soared from ¥163.5 billion the year before to ¥183.0 billion, whereas soaring of average unit prices
by strong euro pushed import volume of EU down and gave limited growth in import value (from ¥167.7
billion to ¥168.6 billion), putting it even farther behind China. Specifically France finished the year down
both on a value and a volume basis, indicating its slowdown trend. Top three exporters of China, Italy and
France together make up 85-90% in almost every product category, giving them a sizeable lead over other
countries. The only exception is luggage of other materials, where the United States, Germany and ASEAN
hold the lead next to China. The category with the highest import share for China is luggage of plastic
sheeting or textile materials (¥121.0 billion, share 61.0%), which propel the recent breakthrough of China.
On the other hand, Italy holds the lead in leather luggage (¥16.9 billion, share 37.5%) and accessory bags of
plastic sheeting and textile (¥11.6 billion, share 30.2%), while France (¥7.4 billion, share 33.4%) retains the
top spot in leather handbags. (see Fig. 5)
Imports of bags from ASEAN as a whole in 2004 totaled 19.91 millions worth ¥11.3 billion (share 3.0%
both). ASEAN competes directly with China in its main category of bags of plastic sheeting or of textile
materials. From stiffer competition with China, total import volume from ASEAN tumbled from 30.75 mil-
lion units to 19.91 million units over past five years. Import value peaked at ¥15.0 billion in 2001 and then
declined for three straight years. Nevertheless, more sharp decline of imports from the Republic of Korea
and Taiwan during this time gives sixth position (¥49.8 billion, share 1.3%) to Vietnam, and seventh posi-
tion to Thailand (¥42.8 billion, share 1.0%) in the rankings of total bag exporters to Japan. (see Figs. 4, 6)
Marketing Guide for ASEAN Exporters to Japan
45
B-1. Bags
Fig. 4 Principal exporters of bags (total) to Japan
[Trends in import value by leading exporters] [Shares of bag imports in 2004 (value basis)]
(¥ million)
200,000 Others ASEAN
China 4.7% 3.0% EU
150,000
44.3%
100,000 Italy
50,000 France China
Spain 48.0%
0
2000 2001 2002 2003 2004 (Year)
2000 2001 2002 2003 2004
Average
Value Value Value Value Volume Value Volume unit price
China 135,509 159,283 160,126 163,496 568,058 182,996 48.0% 598,648 91.6% 306
Italy 74,510 80,016 70,291 72,810 6,543 75,536 19.8% 6,543 1.0% 11,545
France 53,019 68,258 72,874 77,137 3,869 73,642 19.3% 3,869 0.6% 19,034
Spain 6,481 8,756 8,652 12,491 782 13,830 3.6% 820 0.1% 16,859
U.S.A. 12,121 13,469 9,911 8,188 2,644 8,367 2.2% 2,346 0.4% 3,566
Vietnam 6,105 6,818 6,164 5,573 8,733 4,983 1.3% 8,988 1.4% 554
Thailand 3,391 4,817 4,236 3,805 5,940 4,278 1.1% 6,209 1.0% 689
R. Korea 12,906 9,740 6,961 4,268 13,106 3,116 0.8% 11,168 1.7% 279
Others 18,750 18,151 15,131 13,731 18,640 14,104 3.7% 14,933 2.3% 944
TOTAL 322,791 369,309 354,345 361,499 628,682 380,853 100.0% 653,525 100.0% 583
(Ｅ Ｕ) 137,683 161,499 156,679 167,706 13,339 168,620 44.3% 12,811 2.0% 13,162
（ASEAN） 12,414 14,962 13,254 11,538 20,025 11,338 3.0% 19,913 3.0% 569
Units: value=¥ million, volume=1,000 units, average unit price=¥ per unit Source: Trade Statistics (Ministry of Finance)
Fig. 5 Principal exporters of bags to Japan by category in 2004
Luggage (of leather) Handbags (of leather)
Yearly Average Yearly Average
Country Value Share Country Value Share
change unit price change unit price
1 Italy 16,921 37.5% 113.6 20,173 France 7,414 33.4％ 92.2 68,986
2 China 13,210 29.3% 126.9 1,478 China 6,583 29.7% 100.6 2,024
3 France 9,299 20.6% 95.6 42,754 Italy 5,464 24.6% 97.0 25,981
4 Spain 1,806 4.0% 94.0 37,453 Spain 722 3.3% 98.4 33,668
5 Thailand 570 1.3% 99.9 2,802 R. Korea 412 1.9% 68.2 10,596
(ASEAN TOTAL) 1,029 2.3% 117.8 1,233 456 2.1% 94.8 7,087
Accessory bags (of leather) Luggage (of plastic sheeting or textile)
Yearly Average Yearly Average
Country Value Share Country Value Share
change unit price change unit price
1 China 14,590 39.8% 113.4 638 China 121,047 61.0% 109.4 269
2 Italy 8,857 24.2% 97.7 10,090 France 27,238 13.7% 94.1 15,487
3 France 8,034 21.9% 102.8 16,719 Italy 26,027 13.1% 101.5 13,663
4 Spain 2,649 7.2% 102.6 10,199 U.S.A. 5,733 2.9% 100.5 3,063
5 Thailand 676 1.8% 90.1 765 Vietnam 4,280 2.2% 86.3 578
(ASEAN TOTAL) 880 2.4% 97.7 772 7,936 4.0% 95.7 522
Handbags (of plastic sheeting or textile) Accessory bags (of plastic sheeting or textile)
Yearly Average Yearly Average
Country Value Share Country Value Share
change unit price change unit price
1 China 13,063 37.7% 112.0 766 Italy 11,590 30.2% 105.1 5,056
2 France 11,737 33.9% 91.1 29,199 China 11,375 29.7% 131.6 147
3 Italy 6,560 18.9% 102.0 20,365 France 9,853 25.7% 101.8 11,434
4 Spain 1,245 3.6% 186.6 25,450 Spain 4,215 11.0% 107.0 15,731
5 U.S.A. 676 2.0% 109.4 9,518 U.S.A. 493 1.3% 93.9 2,672
(ASEAN TOTAL) 371 1.1% 118.2 1,015 236 0.6% 87.8 294
(To be continued)
Marketing Guide for ASEAN Exporters to Japan
46
B-1. Bags
Luggage (other) Handbags (other）
Yearly Average Yearly Average
Country Value Share Country/area Value Share
change unit price change unit price
1 China 2,446 54.0% 117.5 257 China 194 73.9% 153.2 721
2 U.S.A. 587 13.0% 94.8 6,620 Italy 29 10.9% 89.0 37,661
3 Germany 373 8.2% 121.7 9,706 France 12 4.4% 275.7 44,487
4 Indonesia 217 4.8% 105.9 2,793 Germany 7 2.5% All 37,034
5 Thailand 194 4.3% 112.8 137 Hong Kong 5 2.1% 94.8 1,440
(ASEAN TOTAL) 422 9.3% 104.1 281 8 3.0% 150.9 1,393
Units: value=¥ million, yearly change=%, average unit price=¥ per unit Source: Trade Statistics (Ministry of Finance)
Fig. 6 Trends in imports from ASEAN by country/category
[Value] [Volume]
(¥ million) (1,000 units)
20,000 40,000
14,962 30,753
28,886
15,000 13,254 30,000 24,839
12,414
11,538 11,338
20,025 19,913
10,000 20,000
5,000 10,000
0 0
2000 2001 2002 2003 2004 (Year) 2000 2001 2002 2003 2004
(Year)
Value Volume
2000 2001 2002 2003 2004 2000 2001 2002 2003 2004
Luggage 443 661 757 874 1,029 368 301 267 384 834
Handbags 676 599 518 481 456 208 145 110 111 64
Leather
Accessory bags 976 888 874 901 880 1,314 1,235 1,206 1,258 1,141
Subtotal 2,096 2,148 2,149 2,255 2,365 1,890 1,682 1,583 1,753 2,039
Luggage 9,153 10,789 9,549 8,289 7,936 24,879 22,951 19,284 15,669 15,199
Plastic
Handbags 587 1,044 558 314 371 1,013 959 590 364 366
sheeting
ASEAN or textile Accessory bags 300 401 413 268 236 1,747 1,767 1,908 935 800
TOTAL Subtotal 10,040 12,234 10,520 8,871 8,542 27,639 25,678 21,782 16,969 16,365
Luggage 271 555 577 405 422 1,170 1,477 1,442 1,277 1,498
Handbags 5 25 7 5 8 5 25 7 4 6
Other
Accessory bags 2 1 2 2 2 49 24 24 22 5
Subtotal 278 581 586 412 431 1,224 1,526 1,474 1,303 1,509
TOTAL 12,414 14,962 13,254 11,538 11,338 30,753 28,886 24,839 20,025 19,913
Share of total 3.8% 4.1% 3.7% 3.2% 3.0% 5.3% 4.6% 4.0% 3.2% 3.0%
Bags of leather 240 250 186 202 386 412 302 286 344 809
Bags of plastic sheeting
5,862 6,555 5,974 5,366 4,594 14,904 13,442 10,431 8,378 8,177
or textile
Vietnam
Other bags 3 12 3 4 2 9 41 11 11 2
TOTAL 6,105 6,818 6,164 5,573 4,983 15,325 13,785 10,727 8,733 8,988
Share of total 1.9% 1.8% 1.7% 1.5% 1.3% 2.6% 2.2% 1.7% 1.4% 1.3%
Bags of leather 1,153 1,281 1,476 1,470 1,352 1,290 1,230 1,202 1,227 1,110
Bags of plastic sheeting
2,012 3,188 2,460 2,160 2,729 6,114 5,729 4,362 3,527 3,685
or textile
Thailand
Other bags 226 348 301 175 196 999 1,172 1,190 1,186 1,414
TOTAL 3,391 4,817 4,236 3,805 4,278 8,402 8,132 6,754 5,940 6,209
Share of total 1.1% 1.3% 1.2% 1.1% 1.1% 1.5% 1.3% 1.1% 0.9% 0.9%
Bags of leather 146 91 71 89 154 87 72 35 68 48
Bags of plastic sheeting
1,378 1,578 1,430 1,016 830 4,237 3,881 3,559 3,533 3,060
or textile
Indonesia
Other bags 12 144 235 205 218 25 39 73 68 79
TOTAL 1,537 1,813 1,736 1,310 1,203 4,349 3,992 3,666 3,669 3,197
Share of total 0.5% 0.5% 0.5% 0.4% 0.3% 0.8% 0.6% 0.6% 0.6% 0.5%
(To be continued)
Marketing Guide for ASEAN Exporters to Japan
47
B-1. Bags
Value Volume
2000 2001 2002 2003 2004 2000 2001 2002 2003 2004
Bags of leather 528 478 378 431 410 56 44 27 50 46
Bags of plastic sheeting
42 94 67 36 43 82 176 79 91 46
or textile
Singapore
Other bags 0 1 2 0 0 0 5 2 0 0
TOTAL 571 573 447 467 453 139 225 108 141 93
Share of total 0.2% 0.2% 0.1% 0.1% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0%
Philippines 769 796 564 302 321 2,057 1,884 1,297 433 277
Malaysia 33 133 104 77 96 456 829 2,279 1,097 1,150
Cambodia 0 1 2 1 4 0 2 2 3 3
Myanmar 5 11 2 0 1 11 37 6 4 4
Laos 2 - - 2 - 13 - - 5 -
Brunei - - - - - - - - - -
Units: ¥ million, 1,000 units Source: Trade Statistics (Ministry of Finance)
(3) Imports’ Market Share in Japan
As is clear from Fig. 7 below, between low-priced imports in volume from China and imports of luxury
brand products from EU, domestic production of bags have been in a lengthy decline, slipping from ¥234.6
billion in 1999 to ¥157.2 billion in 2003, representing just two-thirds level. Accessory bags and tanned
leather handbags, the leading domestically made products, have sharply declined in production over the last
five years. Production has been down in virtually every product subcategory (except for composition leather
cases).
Fig. 7 Trends in domestic production of bags
1999 2000 2001 2002 2003 Share Vs. 2002 Vs. 1999
Tanned leather travel bags 1,581 1,313 697 1,183 1,116 0.7% 94.3 70.6
Tanned leather attaché cases,
18,766 18,470 16,257 16,594 17,926 11.4% 108.0 95.5
student bags, school satchels
Leather cases 3,432 1,351 1,367 1,357 897 0.6% 66.1 26.1
Other tanned leather luggage 4,189 3,437 2,928 3,992 3,393 2.2% 85.0 81.0
Tanned leather handbags 50,293 45,204 41,017 39,504 35,364 22.5% 89.5 70.3
Composition leather cases 8,180 8,385 7,940 8,983 8,757 5.6% 97.5 107.1
Plastic luggage 13,991 12,943 8,365 5,596 5,021 3.2% 89.7 35.9
Other luggage 35,483 33,536 32,681 26,466 26,219 16.7% 99.1 73.9
Accessory bags 85,968 77,061 69,768 52,662 48,628 30.9% 92.3 56.6
Plastic handbags 1,756 588 562 500 440 0.3% 88.0 25.1
Other handbags 10,999 12,061 11,108 8,323 9,460 6.0% 113.7 86.0
合 計 234,638 214,349 192,690 165,160 157,221 100.0% 95.2 67.0
Units: ¥ million (factory shipment basis), Vs. 2002, 1999=%
Source: Census of Manufacturers (those with 4 employees and over)
From these statistics, imports’ share in the Japanese bag market in 2003 is estimated to reach 70%. In 2004,
imports continued to grow, whereas Toyooka City in Hyogo Prefecture, the largest bag producing area in
Japan, was heavily damaged by the flood due to a Typhoon. Decline of domestic production ability is inevi-
table, imports’ share in 2004 will likely further increase.
Fig. 8 Imports’ share in the Japanese market
2000 2001 2002 2003
Domestic production 214,349 192,690 165,160 157,221
Exports 4,230 4,148 4,335 4,598
Imports 322,791 369,309 354,345 361,499
Market total 532,910 557,851 515,170 514,122
Imports’ share 60.6% 66.2% 68.8% 70.3%
Unit: ¥ million Sources: Census of Manufactures, Trade Statistics
3. Key Considerations related to Exporting to Japan
(1) Regulations and Procedural Requirements at the Time of Importation in Japan
The importation of leather bag is, in some instances, subject to the Foreign Exchange and Foreign Trade
Law, the Wild Life Protection and Hunting Law, the Customs Tariff Law and the Customs Law.
Marketing Guide for ASEAN Exporters to Japan
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B-1. Bags
1) Foreign Exchange and Foreign Trade Law (Import Trade Control Order)
Under terms of the Washington Convention (Convention on International Trade in Endangered Species of
Wild Fauna and Flora, so-called CITES), the Foreign Exchange and Foreign Trade Law regulates importing
of species of wild fauna and flora listed in the Appendices to the Convention. It covers not only the animals
themselves but also bags made wholly or partially from fur or leather of endangered animals. The Washing-
ton Convention applies to three categories of species, as discussed below. For more information on the spe-
cific content and applicability of these classifications, please contact the Trade Licensing Division, Trade and
Control Department, Trade and Economic Cooperation Bureau, Ministry of Economy, Trade and Industry.
Appendix I (All species threatened with extinction)
Commercial traffic in these species or products made from these species is prohibited. For customs
purposes all of these animals are designated as import quota items and the Minister of Economy, Trade
and Industry must approve an import quota before any such item can be imported.
Appendix II (All species requiring strict international regulation to prevent danger of extinction)
The importer of any such species or product made from a member of such species must present to
Japanese customs authorities an export certificate or re-export certificate from the management au-
thority of the exporting country. Some species need prior confirmation by the Minister of Economy,
Trade and Industry.
Appendix III (All Species that any party identifies as being subject to regulation and as needing the cooperation of
other parties in the control of trade)
The importer of any such species or product made from a member of such species must present to
Japanese customs an export certificate and a certificate of origin issued by management authority of
exporting country, or a certificate granted by the management authority of the country of re-export that
specimen was processed in that country. Some species need prior confirmation by the Minister of
Economy, Trade and Industry.
Animals may be bred and raised in captivity for commercial purpose of providing animal hides, or those
had obtained prior to conclusion of the Convention are permitted so long as a certificate by the management
authority of exporting country to that effect is granted. It can be difficult to determine whether leather under
its common name corresponds to a species covered under the Washington Convention, or whether the mate-
rial came from animals that were systematically grown or not. Accordingly, it is preferable when importing
leather bags to list the scientific name on the invoice.
2) Wild Life Protection and Hunting Law
When importing bags containing some species of fur or leather, it is required to attach the export certificate
or legally captured certificate issued by the government agency of the exporting country.
3) Customs Tariff Law / Customs Law
The Customs Tariff Law prohibits the importation of fake name brand products and knock-off copies, and
such items are subject to confiscation or destruction at customs based on provisions of the Customs Law.
Importers can even be subject to criminal penalties, including fines and imprisonment. In recent years, seri-
ous problem in this field is the large number of fake name brand products. April 2003 revisions of the Cus-
toms Tariff Law added patents, design rights and utility model rights to the import suspension system. From
April 2004, information about manufacturers, exporters and importers of fake name brand products shall be
disclosed to rights holders so they can take legal action or otherwise pursue the importers, etc. It has been
decided that, starting from March 2006, the items which are subject to the Unfair Competition Prevention
Law such as misleading products, fake name brand products and knock-off copies will be checked at the
customs even if those products are not registered for trademarks, design rights etc., in order to strengthen the
countermeasures against copy products.
The Ministry of Finance has provided the following information about import suspensions involving bags.
In 2004 there were 6,420 incidents involving 164,939 bags that were intercepted at customs because they
were suspected of infringing intellectual property rights. Moreover, 50.2% of all such interceptions involved
bags.
2000 2001 2002 2003 2004 Yearly change
Number of incidents 1,131 2,376 5,547 5,420 6,420 118.5%
Number of units 43,687 83,863 161,213 142,417 164,939 115.8%
Marketing Guide for ASEAN Exporters to Japan
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B-1. Bags
(2) Regulations and Procedural Requirements at the Time of Sale
The sale of bags is subject to the Act Against Unjustifiable Premiums and Misleading Representations. The
sale of some type of leather bags is also subject to the Law for Conservation of Endangered Species of Wild
Fauna and Flora, and the Household Goods Quality Labeling Law. Products that infringe trademarks, design
rights and other intellectual property rights are regulated by the various intellectual property laws (Trademark
Law, Patent Law, Unfair Competition Prevention Law, etc.). These include knock-off copies, misleading
trade names, and unauthorized use of the characters in advertisements. Prospective importers must be aware
of these considerations, as rights holders may initiate legal action.
Containers and packaging may also be subject to identifier labeling provisions of the Law for Promotion of
Effective Utilization of Resources, and recycling provisions of the Containers and Packaging Recycling Law.
Please contact one of the agencies listed below for more complete information about affected packaging, the
definition of specific providers (certain small-scale providers are exempt from regulation), and labeling
methods.
1) Act Against Unjustifiable Premiums and Misleading Representations
The Act prohibits a form of improper labeling exaggerated or false labeling that misleads consumers about
the nature or quality of products. Also, vague or confusing labeling that makes it difficult to discern the ac-
tual country of origin is also prohibited as a form of improper labeling. The country of origin is defined as “a
country in which a treatment or process effecting substantial change to the substance of the goods made.”
2) Law for Conservation of Endangered Species of Wild Fauna and Flora
The Law established a legal framework of protection for species considered to be in danger of extinction.
Leather bags made from leathers, which are designated as species specially identified for protection, may not
be sold or transferred in Japan. However, species that are being raised for commercial purposes may be dis-
tributed in Japan, provided that proper registration procedures with the Minister of the Environment are
completed. Registration procedures are with the Natural Environment Research Center, a registration or-
ganization officially designated by the Ministry of the Environment. For more details, please consult with the
Wildlife Division, Nature Conservation Bureau, Ministry of the Environment.
3) Household Goods Quality Labeling Law
The Household Goods Quality Labeling Law requires luggage made of cowhide, horsehide, pigskin,
sheepskin or goatskin leather to bear proper labeling to provide information that consumers need to make
purchases. Handbags, purses and other similar types of accessory bags are not subject to these provisions.
(see (3) Labeling Regulations)
(3) Labeling Regulations at the Time of Sale in Japan
1) Legally Required Labeling
[1] Act Against Unjustifiable Premiums and Misleading Representations
All imported bags are subject to country of origin labeling requirements imposed by the Act Against Un-
justifiable Premiums and Misleading Representations. The Act establishes country of origin label standards
so that consumers will not make Japanese-made products for foreign-made products, and so they can readily
identify the country of origin.
[2] Household Goods Quality Labeling Law
The Household Goods Quality Labeling Law requires that all luggage made from cowhide, horsehide,
pigskin, sheepskin or goatskin leather indicate 1) type of leather material used, 2) care and preservation
methods, and 3) name and address or telephone number of labeling entity that should be employed. This is
not applied to handbags, purses and other accessory bags.
Example label for leather luggage
Type of leather material: Cowhide
Care and preservation method
1) Dry it in the shade when a bag got wet.
2) Avoid using benzene etc.
3) Avoid high temperatures in preserving a bag.
ABC Co., Ltd.
Address and telephone number
Marketing Guide for ASEAN Exporters to Japan
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B-1. Bags
[3] Law for Promotion of Effective Utilization of Resources <Example>
Under the Law, specific containers and packaging are subject to iden-
tifier labeling provisions, in order to promote sorted collection. When
paper or plastic is used as a packaging material for wrapping of indi-
vidual product items, or for labels, external packaging or elsewhere, a
material identifier mark must be displayed at least one spot on the side
External Tag
of the container with information where the material is used. packaging
2) Voluntary Labeling based on Provisions of Law
There is no voluntary labeling based on provisions of law for bags.
3) Voluntary Industry Labeling
[1] Labeling for Luggage by the Japan Luggage Association
The Japan Luggage Association has adopted labeling guidelines consistent with provisions of the House-
hold Goods Quality Labeling Law that apply to all luggage whose exterior surface consists of 60% or more
cowhide, horsehide, pigskin, sheepskin or goatskin leather. The topside of the label displays the standard
Leather Mark, while the bottom side indicates the type of leather material and the care and preservation
methods that should be employed. Bags made in Japan also have a mark of reliability sewn in them. For
more information, , please contact:
• Japan Luggage Association TEL: 03-3862-3516 http://www.kaban.or.jp
Example label for luggage
(4) Key Considerations for entering the Japanese Market
In the bags and other fashion market in Japan, consumers are demanding even greater distinctiveness, di-
versity and performance from the products they buy, and they are likely to have an ever-wider range of
choices in the future marketplace. Accordingly, it is very important for prospective entrants into Japanese
market to understand consumer needs and preferences. They need to be able to gather and assimilate infor-
mation, analyze the market and design suitable products in order to succeed. The time has passed when a
product would sell on the strength of prestigious brand name alone. Products have to be able to attract con-
sumer attention on their own merits.
Handbags and tote bags for women in particular are highly sensitive to fashion trends, and product life cy-
cles are brief. These days, department stores, specialized stores and select shops direct a rarity in order to
give customers a fresh impression every time they visit stores by introducing new products frequently with
limited numbers. Basic rules for being selected as a reliable partner, prospective entrants must respond to
these high-mix low-volume orders and to keep the delivery date.
Another problem in the imported bag market is the large number of fake name brand products. The Cus-
toms Tariff Law prohibits the importation of fake name brand products that infringe trademark and other in-
tellectual property rights. Any such item detected at customs will be either confiscated or destroyed. In addi-
tion, products containing the leather of certain endangered species such as crocodile are subject to provi-
sions of the Washington Convention, and as such require a certificate of origin before being allowed into
Japan.
Large luggage and high-end handbags are used for a long time, so it is essential to make complete af-
ter-sales service programs. Normally after-sales service for name brand products is the immediate responsi-
bility of the retailer. But, retailers rarely have repair facilities or programs, so if repairs are needed the prod-
uct must be sent to a repair factory in Japan, returned to the supplier, or sent to the sole import agent or a di-
rect outlet store in Japan for repairs. Different retail stores and brands have varying policies about perform-
ing repairs on products they did not sell (purchase outlet not known, parallel import, individual import, etc.).
But, in recent years these items increasingly are accepted for repair.
In Japan, the Product Liability (PL) Law has been enacted in order to stipulate the liability for compensa-
tion of manufacturers etc. and to protect the victim in case that it is verified that the damages to human life,
Marketing Guide for ASEAN Exporters to Japan
51
B-1. Bags
body or properties have been caused due to defects in manufactured goods. For the imported products, since
the importers shall be liable to compensation for damages, the importers need to be careful about the han-
dling manuals and warning indications, not to mention the quality control. Actually, there was an example
that the damage was caused to a notebook PC due to a fall of the bag’s belt metal fittings.
(3) Regulatory Agency Contact
• Foreign Exchange and Foreign Trade Law (Import Trade Control Order)
Trade Licensing Division, Trade Control Department, Trade and Economic Cooperation Bureau,
Ministry of Economy, Trade and Industry
TEL: 03-3501-1511 http://www.meti.go.jp
• Customs Tariff Law / Customs Law
Compensation and Operation Division, Customs and Tariff Bureau, Ministry of Finance
TEL: 03-3581-4111 http://www.mof.go.jp
• Law for Conservation of Endangered Species of Wild Fauna and Flora / Wild Life Protection and Hunting Law
Wildlife Division, Nature Conservation Bureau, Ministry of the Environment
TEL: 03-3581-3351 FAX: 03-3581-7090 (Direct) http://www.env.go.jp
• Act Against Unjustifiable Premiums and Misleading Representations
Consumer Related Trade Division, Trade Practices Department, Fair Trade Commission of Japan
TEL: 03-3581-5471 FAX: 03-3581-1754 (Direct) http://www.jftc.go.jp
• Household Goods Quality Labeling Law
Product Safety Division, Consumer Affairs Department, Commerce and Information Policy Bureau,
Ministry of Economy, Trade and Industry
TEL: 03-3501-1511 http://www.meti.go.jp
• Law for Promotion of Effective Utilization of Resources / Containers and Packaging Recycling Law
Recycling Promotion Division, Industrial Science and Technology Policy and Environment Bureau,
Ministry of Economy, Trade and Industry
TEL: 03-3501-1511 http://www.meti.go.jp
Office of Recycling Promotion, Policy Planning Division, Waste Management and Recycling Department,
Ministry of the Environment
TEL: 03-3581-3351 FAX: 03-3593-8262 (Direct) http://www.env.go.jp
4. Tariff Duties and Consumption Tax in Japan
(1) Tariff Duties
Fig. 9 on the following page presents tariff duties on bags. In case of confirming the tariff classification or
applicable tariff rate in advance, it is convenient to use the “advance counseling program.” By making an
inquiry to the customs orally, or through document or e-mail, the customs will reply to such inquiry.
Contact: Customs website http://www.customs.go.jp
[Preferential Tariff System]
In order to apply for preferential tariff rates on bags imported from preferential treatment countries, the
importer should submit a certificate of preferential country of origin (Form A) issued by the customs or other
issuing agency in the exporting country (not required if the total taxable value of the shipment is no greater
than ¥200,000). For more details, please contact the Customs and Tariff Bureau, Ministry of Finance. Appli-
cation of tariff rates on ASEAN countries is as follows.
Applicable Rates ASEAN Countries
LDC Preferential Rate Myanmar, Cambodia, Laos
Preferential Rate Thailand, Indonesia, Malaysia, Philippines, Vietnam
WTO Rate Brunei, Singapore (Note)
Note: Based on the Japan-Singapore Economic Partnership Agreement (JSEPA), many items originated in Singapore are approved as duty
free, but the bags are not included in the foregoing group and the WTO Rate shall be applied.
(2) Consumption Tax
(CIF + Tariff Duty) x 5%
5. Related Industry Organizations
• Japan Luggage Association TEL: 03-3862-3511 http://www.kaban.or.jp
Marketing Guide for ASEAN Exporters to Japan
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B-1. Bags
Fig. 9 Tariff duties on bags
Rate of Duty
HS No. Description Prefer- Tem-
General WTO LDC JSEPA
ential porary
4202 Trunks, suit-cases, vanity-cases, executive-cases, brief-cases,
school satchels and similar containers
11 1. With outer surface of leather, of composition leather or of patent
leather
-100 (1) Vanity cases
(Combined or trimmed with precious metal, metal clad with
precious metal, metal plate with precious metal, precious 20% 16% 12.8% Free
stones, semi-precious stones, pearls, coral, elephants’ tusks or
bekko, more than ¥6,000 per piece in value for customs duty)
-200 (2) Other 12.5% 10% 8% Free
12 2. With outer surface of plastics or of textile materials
-100 (1) Vanity cases (same as above) 20% 16% 12.8% Free
(2) Other
-210 1) With outer surface of plastic sheeting or of textile materials 10% 8% 6.4% Free
-220 2) Other 5.8% 4.6% 3.68% Free
19 3. Other 4.1% (4.1%) 0.82% Free
Handbags
21 1. With outer surface of leather, of composition leather or of patent
leather
(1) Combined or trimmed with precious metal, metal clad with
precious metal, metal plate with precious metal, precious
stones, semi-precious stones, pearls, coral, elephants’ tusks
or bekko, more than ¥6,000 per piece in value for customs
duty
-110 1) Of leather or of patent leather 17.5% 14% 11.2% Free
-120 2) Other 20% 16% 12.8% Free
(2) Other
-210 1) Of leather or of patent leather 10% 8% 6.4% Free
-220 2) Other 12.5% 10% 8% Free
22 2. With outer surface of plastic sheeting or of textile materials
-100 (1) Combined or trimmed with precious metal, metal clad with
precious metal, metal plate with precious metal, precious
20% 16% 12.8% Free
stones, semi-precious stones, pearls, coral, elephants’ tusks
or bekko, more than ¥6,000 per piece in value for customs
-200 (2) Other 10% 8% 6.4% Free
29 3. Other 10% 8% 6.4% Free
Articles of a kind normally carried in the pocket or in the handbags
1. With outer surface of leather, of composition leather or of patent
31
leather
(1) Wallets and purses
-100
(Combined or trimmed with precious metal, metal clad with
precious metal, metal plate with precious metal, precious
20% 16% 12.8% Free
stones, semi-precious stones, pearls, coral, elephants’
tusks or bekko, more than ¥6,000 per piece in value for
customs duty)
-200 (2) Other 12.5% 10% 8% Free
32 2. With outer surface of plastic sheeting or of textile materials
-100 (1) Wallets and purses
(Combined or trimmed with precious metal, metal clad with
precious metal, metal plate with precious metal, precious
20% 16% 12.8% Free
stones, semi-precious stones, pearls, coral, elephants’
tusks or bekko, more than ¥6,000 per piece in value for
customs duty)
-200 (2) Other 10% 8% 6.4% Free
39 3. Other 4.1% (4.1%) 0.82% Free
Other
91 1. With outer surface of leather, of composition leather or of patent
12.5% 10% 8% Free
leather
92 2. With outer surface of plastic sheeting or of textile materials 10% 8% 6.4% Free
Note 1: LDC Preferential rate is applicable only for the Least Developed Countries.
Note 2: Normally the order of precedence for application of tariff rates is JSEPA (applied only to articles originated in Singapore), Preferen-
tial, WTO, Temporary, and General, in that order. However, Preferential rates are only eligible when conditions stipulated by law or
regulations are met. Also, WTO rates apply when those rates are lower than Temporary or General rates. Refer to “Customs Tariff
Schedules of Japan” (published by Japan Tariff Association) etc. for more complete interpretation of tariff table.
Marketing Guide for ASEAN Exporters to Japan
53
