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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
48
                                                                                                                   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
                                                                                                                         49
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
50
                                                                                                            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
52
                                                                                                                                      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

				
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