B-6. Ceramic, Porcelain and Glass Tableware 6 Ceramic, Porcelain and Glass Tableware 1. Market Conditions in Japan (1) Definition of Category This category encompasses ceramic, porcelain and glass tableware and kitchenware. Classifications and HS numbers in official trade statistics are shown below. HS 6912.00 includes other household articles and toilet articles (not including of porcelain or china) other than ceramic or stoneware tableware and kitchenware. Glass ware also includes a kind used for toilet, office, indoor decoration or similar purposes. Adding lead oxide to glassware enhances their transparency and shine. In North America and EU nations, glassware with 24% or greater lead oxide content is defined as crystal; however, there is no such clear-cut definition in Japan. Nevertheless, customs statistics classify glassware with 24% or greater lead oxide content as leaded glasses. In popular parlance, glassware with 24% or greater lead oxide content is usually referred to as crystal, while glassware with 6% or greater but less than 24% lead oxide content is referred to as semi-crystal. HS Numbers 6911.10 6912.00 7013.10 7013.21, 31, 91 7013.29, 32, 39, 99 Commodity Tableware and kitchenware of porcelain or china Ceramic tableware, kitchenware, other household articles and toilet articles, other than of porcelain or china Glassware of glass-ceramics Glassware of lead crystal Other glassware (2) Market Conditions [Ceramic and porcelain tableware] The market of ceramic and porcelain tableware in Japan has been stabilized at low levels. Tableware to be used as necessities of life is already saturated, and in the replacement demand due to damage, the imports from China dominate the market with its low price and usefulness, and accordingly it causes whole market’s price decline. Bridal market lost its past liveliness because of a decrease in number of marriages and an increase in free-choice gifts (the recipient can choose any item they want from a catalogue). Demand of corporate premiums for sales promotion continues to be in a slump. In every home, tableware received as a present at a banquet or as corporate premium is being left untouched in the closet. Due to the sluggish overall economic situation, demand in the corporate gift market is very weak, and commercial users such as hotels, restaurants, beverage establishments etc. put off purchasing for replacement of tableware. In particular, expensive products have been severely hit by the shrinkage in demand. Even so, consumers’ interest in ceramic and porcelain tableware is not evenly deteriorating. Consumers increasingly buy necessities at the lowest possible price, and as much as possible they put off purchasing products that do not fit with their lifestyles or for which they ha no immediate need. At the same time, consumers show no reluctance to spend large sums of money on things they truly want or things that have some highly distinctive trait that appeals to them. This speaks of an increasing tendency toward consumer polarization of late. People who want to be particular about tableware in order to enjoy the scenes of “eating” at home are steadily increasing. Thus, mainstream demands of ceramic and porcelain tableware are shifting from a volume gifts to be represented by bridals and corporate premiums to single item demands such as one for personal home use or for presents and are being more diversified and individualized. Recent times in the gift market have seen in the form of combination gift sets that include several different kinds of products (such as ceramic ware with pasta) or single item to be stick to personal preference, in place of traditional gift sets, which merely offered the same item in larger quantities. Under such circumstances, a popularity and reliance on the European luxury brands’ tableware is deep-rooted as ever. For example, Wedgwood’s Wild Strawberry is a long-time seller since its release in 1965. But even in these luxury brands, Japanese consumers generally favor cup-and saucer sets and seven-inch cake plates, which are already well accepted as part of Japanese life styles, over full-line settings (usually sold as settings for six). New consumption trend is notable that people choose luxury brands not by its brand name based on short-lived cachet, but by the design of own preference or by the coincident with own value and that it turned out such products were European luxury brands’ products. Every kiln produces ceramic and porcelain ware with certain unique characteristics. The following broad generalizations can be made about ceramic and porcelain tableware from different parts of the world. Marketing Guide for ASEAN Exporters to Japan 99 B-6. Ceramic, Porcelain and Glass Tableware High-quality porcelain (bone china) brands of the United Kingdom, as represented by Wedgwood, are favorites among Japanese consumers, and grab a large share in the imports from the West. The United Kingdom also exports semi-porcelain ware, stoneware, and ornamental relief jasper ware (featuring white relief patterns laid over blue or green stoneware). Italy has a number of well-known makers of fine china. Richard Ginori is one of popular brands in Japan. Uniquely Italian designs of the Majolica ceramic ware in Faenza and Deruta are also popular. Most European makers of fine dinnerware have close ties to royalty, and Denmark is no exception. Danish handmade china, represented by Royal Copenhagen, is popular for the high quality of its workmanship. As with Japan, Germany is noted for high technical skill in the production of white porcelain dinnerware. Its exports include a number of excellent new products known for their modern styling. In recent times, Mesissen tableware is getting popular among young women. Bavarian ceramic tableware is another popular German export to Japan. Blue porcelain from the Limoges region of France is very well known. French exports are noted for their European aristocratic styling. In recent time, tea cups of Hermes gain popularity among young women. Other European exports include fine china from Hungary and Austria and ceramic tableware from Spain. Tradition blue, white, and blue-white Chinese bone china command very high prices. But, most imports from China and other Asian countries tend to be inexpensive, mass-produced goods. The market for hand-made tableware from these areas is expanding as producers’ benefit from technology sharing and training from Japanese companies, and there is some consumer interest in ethnic craft-style from these countries/areas. U.K. Italy Denmark Germany France Other Europe Asia [Glass tableware] If anything, glass tableware market tends to be on a decrease in recent years and the sales of expensive products is in particular very slow. As with the case in ceramic and porcelain tableware, a center of recent demands in glass tableware has been shifting to single item demands for personal use. The sales of glass tableware that propose stylish and convenient life, such as wine glass, glass tumbler for shochu (clear distilled liquor) and heat-resistant glass products, which can be used in microwave or dish washer are in a good shape. For example, tumblers for shochu exclusive use with a design expressing a taste of Japanese pottery have been gaining popularity to correspond to a recent shochu boom. The heat-resistant glass-made tumbler, which is not broken even by pouring boiling water, is also gathering popularity among shochu fans that drink it with hot water. In addition, since the heat-resistant glass-made product has a high degree of transparency, people can check the dish inside of microwave ovens and bring it directly to a dinning table and wash it by dish washer thereafter. Each manufacturer enriches the exclusive recipes that specify the cooking time and performs sales promotion such as a proposal of hand-made jam and sauces. Key words for good-selling product include specialized functions for particular scenes and a high design sense which also can be valued as interior such as the water using tea pot made by heat-resistant glass and the tall tea pot for Asian tea exclusive use. An increasing tendency toward consumer polarization has seen in glass tableware market as well. While mass-produced products imported from China and ASEAN are spread in the daily use tableware market such as tumbler and small glass plate, a popularity and reliance of European brands’ products is deep-rooted for wine glass, champagne glass, old-fashioned glass etc. Characteristics of main glass tableware production countries are summarized as below. France Italy Germany Baccarat is highly valued throughout the world as the finest crystal and it is synonymous with crystal in Japan. It also has the world’s largest mass production infrastructure for both fine crystal and soda glass products, which have helped them grab a large share in the imports from the West. Italy’s best-known glassware is Venetian crystal. Italian mass-market soda glass products are known for their distinctive styling, and these products are more and more widely available in Japan. Some Italian pre-finished glassware is also imported into Japan for additional cutting. A number of German glassware makers already sell their products in the Japanese market. Machine-produced glassware mostly employs simple styling, while partially colored handmade glassware is especially admired. Functional heat-resistant glass products made in Germany are also very popular in the Japanese market of late. Marketing Guide for ASEAN Exporters to Japan 100 B-6. Ceramic, Porcelain and Glass Tableware Austria Czech U.S.A. China and ASEAN Riedel’s wine glass is greatly appreciated by sommelier and wine fans as an excellent item which pulls the characteristics of wines from all over the world. Also, Swarovski’s crystal glass contains high percentage of lead dioxide and it is famous in the field of ornament and beads accessory. The glass making industry in the Czech has a lengthy history, and its Bohemian crystal is very famous in Japan. It leads the world in production and export of traditional potassium glassware (known for its beautiful high transparency) and lead crystal glassware. High-quality American hand-made crystal is known for its distinctive motifs and production techniques. American glass ornaments are widely admired in Japan. Some mechanized manufacturers have licensed Japanese glassware makers to produce their wares in Japan. American mass-produced glassware generally is simple in styling and is mostly used in the food service industry and for other commercial use. Most exports from China and ASEAN are soda glass tableware and household accessories. Many of their exports come from offshore facilities of Japanese manufacturers or OEM production sites. Exports from China to Japan are increasing rapidly in recent years. (3) Distribution System and Business Practices in Japan [Ceramic and porcelain tableware] In Japan, there are about 30 producing districts by combining porcelain tableware (Arita, Imari, Kutani etc.), ceramic tableware (Masiko, Hagi, Kasama etc.), and stoneware tableware (Bizen, Tokoname, Shigaraki etc.), and the peculiar products are being made at each district. Domestic tableware is usually distributed through wholesalers to retail outlets or to volume commercial users. There are two types of wholesalers; one is wholesalers in producing district who collects each maker’s products within the districts and deliver them to all over the nation, and the other is wholesalers in consumption district who opens the store at big cities like Tokyo and Osaka. Many consumption district wholesalers broadly deal with not only ceramic and porcelain tableware, but also glass tableware and lacquer ware. Also, the wholesalers for commercial users purchase products from the producing district wholesaler and deliver them to hotels and restaurants. On the other hand, major western tableware makers such as Noritake, Nikko, Narumi build up the direct sales network by arranging the sales offices and dealer agents all over the country. Recently, in the ceramic and porcelain tableware market as well, major retail stores are increasingly doing business direct with makers or producing associations. Distribution channel is getting short also due to a reduction of profit margin caused by a drop of sales price and the spread of Internet. Upscale imported brands are generally sold through authorized dealerships, although this is merely one of several possible channels for import distribution, as illustrated in Fig. 1 below. Recently many overseas makers have their own Japanese subsidiaries to sell their products directly in Japan. In addition, since the parallel imports are growing, ordinary consumers have been able to purchase almost all famous brands’ products at lower price via Internet than that of the regularly imported one. 1) Imports through a sole import agent or Japanese subsidiary A Japanese trading company or importer contract sole import agent agreements with the overseas maker to handle goods for distribution to retailers. Many department stores and large retailers also function as authorized import agents. A decade or so ago many overseas makers had no Japanese import agents, but nowadays most of the well-known brands are under contract to authorized import agents in Japan. Some makers have established Japanese subsidiaries or sales offices in order to sell their products directly to department stores and other large retailers. 2) Direct imports The overseas manufacturer or wholesaler in producing area sells directly to department stores and other retail outlets in Japan. 3) Imports through specialty trading company A specialized import trading company imports goods from makers not under import agent contract and distributes those goods mainly to wholesalers and retailers outside the major metropolitan areas. 4) Parallel imports As stated previously, products are purchased from wholesalers or retail outlets in Hong Kong, Singapore, or some other countries/areas and imported to Japan separately from authorized import agents. On the other hand, low-priced products imported from China and ASEAN pass through the same distribution channels as domestic products, and sold not only at tableware specialty stores but also at supermarkets (general merchandise stores), home centers, fancy goods shops, discount stores, and ¥100 shops. Marketing Guide for ASEAN Exporters to Japan 101 B-6. Ceramic, Porcelain and Glass Tableware Fig. 1 Distribution channels for imported ceramic and porcelain tableware Overseas manufacturers Overseas retailers Importers Parallel imports Sole import agents Direct imports Wholesalers in consumption district Retailers Large retailers Consumers [Glass tableware] In the past, when most imports consist of name-brands from the West, they were imported through glassware specialty trading companies or medium-sized general trading companies, and generally did not pass through the same distribution channels as Japanese-made glassware. But, some overseas makers set up Japanese subsidiaries, and as products manufactured in offshore facilities of Japanese makers, machine-made mass-produced glassware, and semi-finished glassware imports have been increasing, distribution patterns for imported glass tableware have diversified considerably in recent years. In addition, there is increasingly incidence of parallel imported high quality products, as is the case with ceramic and porcelain tableware. Many imports from China, ASEAN and other Asian countries consist of development imports under Japanese companies’ direction, and these products pass through the same distribution channels as glassware produced in Japan. Consumers increasingly purchase tumblers and other daily use glass tableware at discount stores or ¥100 shops, and the low-price trends continues unabated. Fig. 2 Distribution channels for imported glass tableware Overseas manufacturers or exporters Trading companies Glassware manufacturers Japanese subsidiary of overseas manufacturers Manufacturer's sales companies Primary wholesalers Secondary wholesalers Department stores, specialty stores, mass merchandisers Consumers Marketing Guide for ASEAN Exporters to Japan 102 B-6. Ceramic, Porcelain and Glass Tableware 2. Trade Trends (1) Import Trends in Japan [Ceramic and porcelain tableware] Imports of both ceramic and porcelain tableware continue a pattern of steady growth. In 2004 total imports reached 89,586 tons (up 18.0% from the year before) worth ¥29.17 billion (up 4.0%), both setting a new-time record. While imports of ceramic tableware show slowdown trend after topping the 50,000 ton mark last year, the growth in imports of porcelain tableware is notable in recent years. Earlier, the growth in imports was supported mainly by 1) increasingly westernized personal lifestyles in Japan, 2) increased personal incomes, which stimulated demand for upscale products and 3) Japanese consumer preference for name brand products. But, recent growth in imports of ceramics and porcelain tableware was actually supported by increased “development imports” from Asia (especially China). Compared with 2000 levels, 2004 import volume of porcelain tableware has grown 2.3 times, while that of ceramic tableware has grown 1.4 times. Nevertheless, on a value basis, porcelain tableware imports have increased by just 11.9%, while ceramic tableware imports have increased by 44.1%. This reflects the sizable volume increase in imports of low-priced products. 2004 saw another large increase in import volume of porcelain tableware, from 24,840 tons the year before to 35,949 tons. But most of the growth was in low-priced products from China. As a result, the average unit price per kilogram fell from ¥738 to ¥511, and total import value remained the almost same level of the previous year at ¥18.39 billion (up 0.3%).(see Figs. 3 and 5) Fig. 3 (¥ million) Trends in Japan’s ceramic and porcelain tableware imports [Total import value] (¥ million) 30,000 [Import value by category] 20,000 15,000 20,000 Ceramic tableware 10,000 Porcelain tableware 10,000 5,000 0 0 2000 2001 2002 2003 2004 (Year) 2000 2001 Value 2002 2003 2004 (Year) Volume 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 Porcelain tableware 16,430 16,581 16,626 18,321 18,385 15,607 16,484 19,171 24,840 35,949 Ceramic tableware 7,484 9,530 9,851 9,730 10,783 37,829 45,800 46,031 51,103 53,637 TOTAL 23,914 26,111 Units: value=¥ million, volume=tons 26,477 28,051 29,168 53,436 62,284 65,202 75,944 89,586 Source: Trade Statistics (Ministry of Finance) [Glass tableware] Though the growth in imports of glass tableware is slow compared with that of ceramic and porcelain tableware, it secured 2.9% growth from the year before to ¥24.13 billion in 2004. Most glass tableware imports consist of soda glass mass-market products with 55,038 tons. Its import value also increased to ¥18.2 billion, with a share of 75.4% of total imports. At the same time, it is worth noting that crystal glassware, which tumbled to ¥4.56 billion (1,573 tons) in 2001, rebounded to ¥5.85 billion (2,125 tons) at a fast enough pace to be above the most recent peak year of 1999 (¥5.65 billion). A look at the trends in imports in the medium shows that glassware tableware imports have shown a continued rise from 1994 onward. Some of the reasons for the growth were 1) the stronger Japanese yen, which brought prices of imports down and made them seem more reasonably priced to consumers; 2) active market entry efforts by foreign glassware makers; and 3) deliberate efforts by Japanese glassware makers to round out their product lines with imported glassware and to reduce costs. In recent years, however, most of the growth was in low-priced products from China, as was the case with porcelain and ceramic tableware. Observers watch to see if the recent recovery in crystal glassware persists into the future. (see Figs. 4 and 5) Marketing Guide for ASEAN Exporters to Japan 103 B-6. Ceramic, Porcelain and Glass Tableware Fig. 4 Trends in Japan’s glass tableware imports [Total import value] [Import value by category] (¥ million) 20,000 (¥ million) 30,000 15,000 Other glassware 20,000 10,000 Lead crystal glassware 10,000 5,000 0 0 2000 2001 2002 2003 2004 (Year) 2000 2001 2002 Value 2000 Glass-ceramics ware 2001 2002 2003 (Year) 2004 Volume 2003 2004 2000 2001 2002 2003 2004 110 89 65 118 71 176 120 98 168 119 4,707 4,559 5,016 5,491 5,854 1,900 1,573 1,673 2,177 2,125 Other glassware 15,725 16,721 16,188 17,825 18,200 44,427 42,385 44,330 51,728 55,038 TOTAL Units: ¥ million, tons 20,541 21,369 21,269 23,435 24,126 46,503 44,078 46,101 54,073 57,281 Source: Trade Statistics (Ministry of Finance) Lead crystal glassware Fig. 5 Trends in tableware imports by category in 2004 Value Volume Porcelain tableware 18,385 34.5% Yearly change 100.3 Ceramic tableware 10,783 20.2% 110.8 Value Glass-ceramics ware Lead crystal glassware Other glassware Share Average unit price 35,949 24.5% Yearly change 144.7 53,637 36.5% 105.0 Volume Share 2003 2004 738 511 190 201 71 0.1% 60.2 119 0.1% 70.6 705 601 5,854 11.0% 106.6 2,125 1.4% 97.6 2,522 2,755 18,200 34.2% 102.1 55,038 37.5% 106.4 345 331 TOTAL 53,294 100.0% 103.5 146,867 100.0% 113.0 396 363 Units: ¥ million, tons, yearly change=%, average unit price=¥ per kilogram Source: Trade Statistics (Ministry of Finance) (2) Principal Exporters to Japan and ASEAN’s Position [Porcelain tableware] The porcelain tableware market is polarized between high-end products from EU nations (¥10.53 billion, import share 57.3%) and inexpensive products from China (¥6.27 billion, 34.1%). Considering the composition that EU had 83.1% share (¥13.66 billion) and China had 11.6% share (¥1.91 billion) in 2000, we can see how rapidly imports from China have increased in the last five years. Until last year China increased its export to Japan at a rate of ¥600 million every year. It made a big leap in 2004 from the previous year’s ¥3.89 billion (share 21.2%) to ¥6.27 billion (share 34.1%), and China moved past the United Kingdom (¥5.17 billion, share 28.1%) into first place for the first time. On the other hand, among EU nations, not only the United Kingdom, but also Germany (¥1.75 billion, 9.5%) and Denmark (¥973 million, 5.3%) have decreased their exports to Japan for four consecutive years. Italy, who exceeded the ¥2 billion mark last year, retreated again to ¥1.15 billion (share 6.3%) in 2004, and so the EU as a whole lost its momentum. In spite of euro appreciation and high oil price, the average unit price of every EU products showed a tendency of decline, suggesting the change of consumers’ needs for European brands’ products. On a volume basis, China has a commanding share of 85.7%, by rising considerably from 19,626 tons the year before to 30,809 tons. (see Fig. 6) In contrast to EU nations’ slowdown, it is noteworthy that imports of porcelain tableware from Thailand have grown steadily in recent years. In 2004, Thailand moved ahead of Hungary into seventh place (¥592 million, share 3.2%) in the rankings, and on a volume basis it managed to climb past the United Kingdom into second place (1,372 tons, share 3.8%). When Indonesia, Malaysia and other countries are factored in, ASEAN exports of porcelain tableware to Japan as a whole topped the ¥1.0 billion mark for the first time, and reached ¥1.20 billion (share 6.5%). This is equivalent to 2.3 times of 2000 (¥527 million). Marketing Guide for ASEAN Exporters to Japan 104 B-6. Ceramic, Porcelain and Glass Tableware Fig. 6 Principal exporters of porcelain tableware to Japan [Trends in import value by leading exporters] [Shares of porcelain tableware imports in 2004] (¥ million) 8,000 China U.K. Others 2.1% China 34.1% 6,000 ASEAN 6.5% 4,000 Germany 2,000 EU 57.3% Italy 0 2000 2001 2002 2003 2004 2000 2001 2002 Value Value Value (Year) 2003 Value 2004 Volume Value Volume Average unit price 85.7% 203 China 1,910 2,525 3,210 3,888 19,626 6,267 34.1% 30,809 U.K. 6,683 6,045 5,916 5,837 1,331 5,172 28.1% 1,257 3.5% 4,116 Germany 2,101 2,097 1,971 1,831 344 1,747 9.5% 366 1.0% 4,776 Italy 1,443 1,822 1,216 2,098 567 1,152 6.3% 353 1.0% 3,264 Denmark 1,785 1,326 1,245 1,117 144 973 5.3% 160 0.4% 6,065 France 659 928 941 880 185 670 3.6% 138 0.4% 4,853 Thailand 325 329 387 480 1,081 592 3.2% 1,372 3.8% 431 1,523 1,509 1,740 2,191 1,561 1,813 9.9% 1,493 4.2% 1,214 Others TOTAL 16,430 16,581 16,626 18,321 24,840 18,385 100.0% 35,949 100.0% 511 (E U) 13,661 13,135 12,390 13,068 2,865 10,529 57.3% 2,521 7.0% 4,177 (ASEAN) 527 578 633 954 Units: ¥ million, tons, average unit price=¥ per kilogram 1,825 1,204 6.5% 2,124 5.9% 567 Source: Trade Statistics (Ministry of Finance) [Ceramic tableware] This same pattern is even more apparent in ceramic tableware, and an increase in China’s exports to Japan started earlier than porcelain tableware. China tripled its exports to Japan from 15,180 tons to 47,071 tons between 1998 and 2003, giving China an import share of 92.1% on a volume basis, and 75.2% on a value basis (¥7.32 billion). In 2004, even such momentum got weak but rose by 4.3% to 49,110 tons worth ¥7.91 billion (up 8.1%), representing a slight growth compared with the past. In contrast, EU nations’ collective exports to Japan showed a recovery to ¥1.65 billion, which had shrank in 2003 to ¥1.31 billion from the peak year of 2001 (¥2.39 billion), when Italian ceramic tableware soared to ¥1.04 billion aided by the publicity on “Italy in Japan 2001” project. Imports from Thailand, Malaysia and other ASEAN countries recovered as a whole to ¥970 million. As a result, China’s import share on a value basis, which has been steadily increased in recent years, was down from last year’s 75.2% to 73.4%, giving EU collectively 15.3% share and ASEAN collectively a share of 9.0%. Among EU nations, Finland made the biggest leap (from ¥51 million to ¥199 million) and took fifth position by defeating the traditional exporter nations such as France (¥186 million) and Italy (¥174 million). Finland draws attentions as a new supply base of ceramic tableware. (see Fig. 7) Marketing Guide for ASEAN Exporters to Japan 105 B-6. Ceramic, Porcelain and Glass Tableware Fig. 7 Principal exporters of ceramic tableware to Japan [Trends in import value by leading exporters] [Shares of ceramic tableware imports in 2004] (¥ million) 10,000 China Others 2.4% 8,000 ASEAN 9.0% EU 15.3% 6,000 China 73.4% 4,000 2,000 U.K. 0 2000 China 2001 2002 2003 2004 2000 2001 2002 Value Value Value (Year) 2003 Value 2004 Volume Value Volume Average unit price 91.6% 161 4,488 5,875 6,824 7,321 47,071 7,913 73.4% 49,110 U.K. 691 660 628 467 214 578 5.4% 245 0.5% 2,355 Thailand 403 461 490 501 1,452 523 4.8% 1,544 2.9% 339 Malaysia 209 232 251 148 413 219 2.0% 714 1.3% 307 51 61 68 51 27 199 1.8% 117 0.2% 1,705 1,754 Finland France 170 171 142 183 89 186 1.7% 106 0.2% Italy 479 1,040 399 187 324 174 1.6% 230 0.4% 759 Others 994 1,029 1,048 872 1,514 991 9.2% 1,570 2.9% 631 TOTAL 7,484 9,530 9,851 9,730 51,103 10,783 100.0% 53,637 100.0% 201 (E U) 1,882 2,392 1,760 1,310 1,109 1,647 15.3% 1,101 2.1% 1,495 (ASEAN) 744 891 961 822 Units: ¥ million, tons, average unit price=¥ per kilogram 2,480 970 9.0% 3,097 5.8% 313 Source: Trade Statistics (Ministry of Finance) [Glass tableware] China’s exports of glass tableware to Japan have strongly increased over the past five years, from 9,319 tons to 23,776 tons. China took the lead not only on a volume basis but on a value basis as well, as its import volume moved it ahead of France into the top spot in 2003 onward. 2004 saw its import grow by another 12.2% to ¥6.77 billion. However, unlike the case with ceramic and porcelain tableware, there are some 10 nations that export at least 1,000 tons of glassware to Japan annually, so China does not enjoy the same sort of import market dominance in glass tableware (share 28.1%). At one time France was the leading exporter of glass tableware to Japan. French glassware is known not only for its luxury-grade handmade crystal, but also for the world’s most highly developed mass production system for affordably priced glassware as well. These match the lifestyle of the Japanese consumer and are the underpinnings for the popularity of French products in the Japanese market. But three straight years of decline have pushed France’s exports down in 2002 to ¥5.15 billion. In 2003 onward, however, France saw its exports of crystal glassware to Japan increase again, and its total 2004 value, inclusive of mass-market products, recovered to ¥5.93 billion (share 24.6%) with 8,062 tons. Among other leading exporters of glass tableware to Japan, third-ranked Germany (¥1.66 billion, share 6.9%), fifth-ranked Austria (¥1.00 billion, 4.2%) and seventh-ranked Thailand (¥908 million, 3.8%) all grew their imports steadily, while fourth-ranked Italy (¥1.40 billion, 5.8%) and other leading exporters including Indonesia, the Czech Republic and the United States all finished the year down. Import volume of glass tableware from ASEAN in total reached a record high of 9,188 tons in 2004 and it penetrated the market with a share of 16.0%. Nonetheless, because of further progress of price decline, its import value has been reduced from ¥2.20 billion the year before to ¥ 2.17 billion (share 9.0%), in contrast to its strong performance in ceramic and porcelain tableware. The main reason is Indonesia failed to keep the last year’s rapid increase value level. In this regard, glass tableware made in ASEAN has become an existence which is completely overtaking the Republic of Korea in mass-produced glass tableware market in Japan. (see Figs. 8 – 10) Marketing Guide for ASEAN Exporters to Japan 106 B-6. Ceramic, Porcelain and Glass Tableware Fig. 8 Principal exporters of glass tableware to Japan [Trends in import value by leading exporters] [Shares of glass tableware imports in 2004] (¥ million) 8,000 ASEAN 9.0% Others 10.6% China 6,000 France China 28.1% 4,000 Germany 2,000 EU 52.3% 0 2000 2001 2002 2003 2000 2001 2002 Value Value Value 2004 (Year) 2003 Value 2004 Volume Value Volume 23,776 Average unit price 41.5% 285 China 3,008 4,030 4,993 6,036 19,567 6,770 28.1% France 5,760 5,564 5,148 5,455 7,909 5,932 24.6% 8,062 14.1% 736 Germany 1,351 1,216 1,338 1,480 1,250 1,660 6.9% 1,312 2.3% 1,265 Italy 1,030 1,409 1,440 1,428 2,935 1,403 5.8% 1,999 3.5% 702 Austria 785 694 669 846 183 1,003 4.2% 223 0.4% 4,491 Indonesia 690 726 791 1,012 5,066 945 3.9% 4,840 8.4% 195 243 Thailand 574 567 498 865 2,917 908 3.8% 3,745 6.5% R. Korea 1,322 1,297 937 1,065 4,811 746 3.1% 4,054 7.1% 184 Czech 695 664 836 902 859 707 2.9% 655 1.1% 1,078 U.S.A. 1,115 1,066 851 828 1,431 647 2.7% 1,187 2.1% 545 Others 4,211 4,138 3,767 3,518 7,151 3,406 14.1% 7,429 13.0% 459 TOTAL 20,541 21,369 21,269 23,435 54,073 24,126 100.0% 57,281 100.0% 421 (E U) 11,317 11,511 11,334 12,025 15,286 12,619 52.3% 14,733 25.7% 857 (ASEAN) 1,681 1,680 1,675 2,201 Units: ¥ million, tons, average unit price=¥ per kilogram 8,608 2,171 Fig. 9 9.0% 9,188 16.0% 236 Source: Trade Statistics (Ministry of Finance) Principal exporters of glass tableware to Japan by category in 2004 Tableware of lead crystal Yearly Average Value Share Country change unit price 3,257 55.6% 118.1 3,838 China Other glassware 1 France 6,626 Yearly Average change unit price 36.4% 111.5 281 2 Austria 855 14.8% 110.4 5,847 France 2,642 14.5% 99.8 369 3 Germany 442 7.6% 110.1 3,444 Germany 1,215 6.7% 112.8 1,028 1,053 5.8% 98.4 616 942 5.2% 93.2 196 2,149 11.8% 98.6 235 Country 4 Italy 349 6.0% 97.4 1,205 Italy 5 Czech 348 5.9% 66.2 1,166 Indonesia (ASEAN TOTAL) 16 0.3% 194.3 Value 366 Units: ¥ million, average unit price=¥ per kilogram Share Source: Trade Statistics (Ministry of Finance) Fig. 10 Trends in imports from ASEAN by country/category [Value] [Volume] (ton) (¥ million) 5,000 3,977 4,000 2,952 3,149 4,345 14,410 15,000 3,269 12,913 9,838 9,381 9,943 2000 2001 2002 10,000 3,000 2,000 5,000 1,000 0 0 2000 2001 2002 2003 2004 2003 2004 Marketing Guide for ASEAN Exporters to Japan 107 B-6. Ceramic, Porcelain and Glass Tableware Value 2002 633 961 1,675 3,269 6.8% 2003 954 822 2,201 3,977 7.7% 2004 1,204 970 2,171 4,345 8.2% 2000 1,092 2,582 6,164 9,838 9.8% Porcelain tableware 325 329 387 Ceramic tableware 403 461 490 Thailand Glass tableware 574 567 498 TOTAL 1,302 1,357 1,375 Share of total 2.9% 2.9% 2.9% Porcelain tableware 103 145 168 Ceramic tableware 41 53 97 IndoneGlass tableware 690 726 791 sia TOTAL 834 923 1,057 Share of total 1.9% 1.9% 2.2% Vietnam 369 433 376 Malaysia 276 243 280 Philippines 153 192 176 Singapore 18 2 5 Brunei Myanmar Laos Cambodia Units: ¥ million, tons, average unit price=¥ per kilogram 480 501 865 1,847 3.6% 405 86 1,012 1,504 2.9% 331 173 116 5 1 - 592 523 908 2,023 3.8% 369 92 945 1,405 2.6% 414 372 128 3 - 742 1,556 2,048 4,347 4.3% 150 140 3,128 3,418 3.4% 811 983 256 23 - Porcelain tableware Ceramic tableware ASEAN Glass tableware TOTAL TOTAL Share of total 2000 527 744 1,681 2,952 6.6% 2001 578 891 1,680 3,149 6.6% Average unit price Volume 2001 1,045 2,734 5,602 9,381 8.8% 2002 1,158 3,127 5,657 9,943 8.9% 2003 1,825 2,480 8,608 12,913 9.9% 2004 2,124 3,097 9,188 14,410 9.8% 2004 567 313 236 302 722 850 1,081 1,372 431 1,542 1,551 1,452 1,544 339 1,696 1,424 2,917 3,745 243 3,959 3,825 5,450 6,661 304 3.7% 3.4% 4.2% 4.5% 160 190 610 390 945 113 382 311 266 344 3,220 3,580 5,066 4,840 195 3,492 4,152 5,987 5,497 256 3.3% 3.7% 4.6% 3.7% 815 813 743 1,069 387 775 830 490 933 398 339 320 241 249 518 1 2 2 1 2,180 0 Source: Trade Statistics (Ministry of Finance) (3) Imports’ Market Share in Japan In contrast to growth in imports, domestic production of ceramic and porcelain tableware has been heavily decreasing year by year. As a result, the imports’ share on a value basis in the market for ceramic and porcelain tableware has been rising from 21.0% in 2000 to 34.8% in 2004. As Japanese style tableware is estimated to account for about 70% of total domestic production, imports’ share in the western tableware category is estimated to have risen above 50%. On the other hand, imports already account for 55.0% of the market for glass tableware in 2004. Decrease in domestic production exceeds increase in imports, and overall tableware market has been on a downward trend. Fig. 11 Imports’ share in the Japanese market 2000 Ceramic and porcelain tableware Glass tableware 2001 2002 2003 2004 Yearly change Domestic production 102,672 88,628 77,306 69,812 64,267 92.1 Imports 23,914 26,111 26,477 28,051 29,168 104.0 Exports 12,557 13,303 13,003 11,248 9,560 85.0 Market total 114,029 101,436 90,780 86,615 83,875 96.8 Imports’ share 21.0% 25.7% 29.2% 32.4% 34.8% Domestic production 33,393 30,663 31,686 28,899 28,606 99.0 Imports 20,541 21,369 21,269 23,435 24,126 102.9 Exports 4,193 6,801 7,032 7,532 8,902 118.2 Market total 49,741 45,231 45,923 44,802 43,830 97.8 Imports’ share Units: ¥ million, yearly change=% 41.3% 47.2% 46.3% 52.3% 55.0% Sources: Yearbook of Ceramics and Building Materials Statistics, Trade Statistics 3. Key Considerations related to Exporting to Japan (1) Regulations and Procedural Requirements at the Time of Importation in Japan Provisions of the Food Sanitation Law apply to the importation of ceramic, porcelain and glass tableware. 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. April 2003 revisions of the Customs 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. Marketing Guide for ASEAN Exporters to Japan 108 B-6. Ceramic, Porcelain and Glass Tableware 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. 1) Food Sanitation Law Under provisions of the Food Sanitation Law, the importation of apparatus and container-packages that pose a potential threat to the human health is prohibited. Importers are required to submit the completed “Notification Form for Importation of Foods, etc.” to the Quarantine Station at the port of entry. Ceramic and porcelain tableware is subject to lead and cadmium leaching standards. A determination is made based on the document examination whether or not an inspection at the bonded area is required. Prior to importing, the importer may take a sample of forthcoming imports to laboratories registered with the Minister of Health, Labour and Welfare or the competent government agency of the exporting countries. Those test results may be substituted for the corresponding inspection at the port of entry, which expedites the quarantine clearance process. Fig. 12 Administrative Procedures Required by the Food Sanitation Law Advance consultation service Advance information acquisition (regarding production methods, etc.) Advance inspection (by the competent government agency of the exporting country, or the official laboratory registered with the Minister of Health, Labour and Welfare) Submission to the Quarantine Station (“Notification Form for Importation of Foods, etc.” and other related documents) Examination of documents Cargo required inspection Failure Pass Reshipment, destruction Cargo not required inspection Certificate of notification processing, or certificate of passing inspection Customs declaration (2) Regulations and Procedural Requirements at the Time of Sale The sale of ceramic, porcelain and glass tableware is subject to provisions of the Food Sanitation Law and the Act Against Unjustifiable Premiums and Misleading Representations. The sale of glass tableware is also subject to provisions of the Household Goods Quality Labeling Law. Products that infringe intellectual property rights are regulated by the various intellectual property laws (Trademark Law, Patent Law, Unfair Competition Prevention Law, etc.). Prospective importers must be aware of these considerations, as rights holders may initiate legal action. In addition, 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) Food Sanitation Law The Food Sanitation Law prohibits sale and use of apparatus and container-packages that pose a potential threat to the human health. Ceramic and porcelain tableware are subject to lead and cadmium leaching standards. Distribution stage is also subject to oversight and guidance by food sanitation inspectors from local government health centers. (Note) The Glass Manufacturers Association of Japan has adopted voluntary standards (lead and cadmium leaching standards, etc.) for glassware with imprint patterns. 2) Household Goods Quality Labeling Law The Law stipulates the format and content of quality labeling for products designed for everyday household use. The purpose is to protect the benefit to consumers by providing information that helps them choose products and informs them about how to use the products correctly. Marketing Guide for ASEAN Exporters to Japan 109 B-6. Ceramic, Porcelain and Glass Tableware Heat-resistant and rein-forced glassware are subject to labeling requirements of the Household Goods Quality Labeling Law at the point of sale. Products may not be sold without labels. (see (3) Labeling Regulations) 3) 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 actual 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.” (3) Labeling Regulations at the Time of Sale in Japan 1) Legally Required Labeling [1] Household Goods Quality Labeling Law The Miscellaneous Industrial Products Quality Labeling Standards under the Household Goods Quality Labeling Law require the following items of information on labeling for heat-resistant and reinforced glass tableware. Required labeling items under the Household Good Quality Labeling Law Products Reinforced glassware for table or kitchen use Heat-resistant glassware for table or kitchen use Labeling items 1) Product name, 2) type of reinforcement, 3) precautions on handling, 4) name of labeler and information contacts (address or telephone number) 1) Product name, 2) intended use, 3) maximum temperature, 4) precautions on handling, 5) name of labeler and information contacts (address or telephone number) . Example label for heat-resistant glassware Product name: Heat-resistant glassware Intended use: With direct flame Maximum temperature: 300 ˚C degrees Precautions on handling: a. Remove all moisture form exterior surface during use. Avoid adding cold water during use. Do not touch the heated portions of the glass with a wet cloth or put a cloth on the portions of the glass when hot. b. Do not use without any contents.(for other than ultra heat-resistant) c. Do not clean with steel wool or abrasive cleanses, with may chip the glass and cause it to break. d. Because there is a chance the water can suddenly boil over, the face should be kept away while heating (only when direct flame is used) e. Heating should be applied to the center of the device and that low heat should be used (only when direct flame is used) f. Do not use for purposes other than intended. Example label for reinforced glassware Product name: Reinforced glassware Type of reinforcement: Physical reinforcement Precautions on handling: a. Do not drop from a high place or otherwise expose this product to sudden impact. b. Do not clean with steel wool or abrasive cleanses, with may chip the glass and cause it to break. c. If the glass does break, it may shatter to tiny flying fragments ABC Glassware Co., Ltd. X-X, YY-machi, ZZ Prefecture ABC Heat-Resistant Glassware Co., Ltd. X-X, YY-machi, ZZ Prefecture 2) Voluntary Labeling based on Provisions of Law [1] Industrial Standardization Law (JIS Law) Based on the Industrial Standardization Law, standards are set for the quality of industrial products (Japanese Industrial Standards: JIS). Under the amendment of the Law, all industrial products for which JIS standards are set will be transferred to a new JIS Mark Labeling System starting from October 2005. Still, the certification of the existing JIS factories will be effective until the end of September 2008 and the current JIS Mark can be indicated. For more details, please contact: •Conformity Assessment Division, Industrial Science and Technology Policy and Environment Bureau, Ministry of Economy, Trade and Industry TEL: 03-3501-1511 http://www.meti.go.jp JIS Mark (New) Marketing Guide for ASEAN Exporters to Japan 110 JIS Mark (Current) B-6. Ceramic, Porcelain and Glass Tableware (4) Key Considerations for entering the Japanese Market Prospective new market entrants need to understand that mainstream demands of ceramic, porcelain and glass tableware of late are single item demands, which are sold by the piece, for personal home use, and consumer needs are being more diversified and individualized. Tableware that do not meet consumer needs will not be accepted no matter how inexpensive they are. Even mass-produced products are required to have a feature to differentiate itself from others when placed at store front. Recent times the small lot orders of a wide variety of products have been increasing, and product-life cycles have been even shorter than they are. In addition, since ceramic, porcelain and glass tableware are all fragile for its product characteristic, a maximum protection is necessary to prevent them from being damaged during the transportation. In Japan, the Product Liability (PL) Law has been enacted in order to stipulate the liability for compensation of manufacturers etc. and to protect the victim in case that it is verified that the damages to human life, 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 handling manuals and warning indications, not to mention the quality control. Normally retail outlets simply replace any defective merchandise for the products sold through import agents. But manufacturers usually will not replace defective for products distributed through non-authorized dealer channels. (5) Regulatory Agency Contact • Food Sanitation Law Office of Imported Food Safety, Inspection and Safety Division, Department of Food Safety, Pharmaceutical and Food Safety Bureau, Ministry of Health, Labour and Welfare TEL: 03-5253-1111 FAX: 03-3503-7964 (Direct) http://www.mhlw.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 • 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 • 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. 13 on the following page presents tariff duties on ceramic and porcelain tableware and glass tableware. 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 ceramic, porcelain and glass tableware 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. Application of tariff rates on ASEAN countries is as follows. Applicable Rates LDC Preferential Rate Preferential Rate JSEPA Rate WTO Rate ASEAN Countries Myanmar, Cambodia, Laos Thailand, Indonesia, Malaysia, Philippines, Vietnam Singapore Brunei Marketing Guide for ASEAN Exporters to Japan 111 B-6. Ceramic, Porcelain and Glass Tableware Fig. 13 Tariff duties on ceramic, porcelain and glass tableware HS No. Description 6911.10 General Rate of Duty Prefer- TemWTO JSEPA ential porary 2.3% Free A Tableware and kitchenware of porcelain or china 3.4% Ceramic tableware, kitchenware, other household articles and toi6912.00 3.4% 2.3% Free let articles, other than of porcelain or china 7013 Glassware of a kind used for table, kitchen, toilet, office, indoor A decoration or similar purposes 10 1. Of glass-ceramics 4.6% 3.1% Free 2. Drinking glasses other than of glass-ceramics 21 1) Of lead crystal 4.6% 3.1% Free 29 2) Others 4.6% 3.1% Free 3. Glassware of a kind used for table (other than drinking glasses) or kitchen purposes other than of glass-ceramics 31 1) Of lead crystal 5.8% 3.9% Free 3.9% Free 32 2) Of glass having a linear coefficient of expansion not exceeding 5.8% 5 x 10-5 per Kelvin with a temperature range of 0˚C to 300˚C 3) Others 5.8% 3.9% Free 39 4. Other glassware 91 1) Of lead crystal 5.8% 3.9% Free 99 2) Other 5.8% 3.9% Free Note 1: “A” in JSEPA rate means that based on the Japan-Singapore Economic Partnership Agreement (JSEPA), articles originated in Singapore were approved as duty free from the effective date of Agreement (November 30, 2002). Note 2: Normally the order of precedence for application of tariff rates is JSEPA, Preferential, 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. (2) Consumption Tax (CIF + Tariff Duty) x 5% 5. Related Industry Organizations • Japan Pottery Manufacturers’ Federation TEL: 052-935-7231 FAX: 052-935-7254 • Japan Pottery Inspection Association TEL: 052-935-7233 FAX: 052-935-6356 • The Glass Manufacturers Association of Japan TEL: 03-3591-2697 FAX: 03-3595-2719 Marketing Guide for ASEAN Exporters to Japan 112 http://www7.ocn.ne.jp/~jpia/ http://www.glassman.or.jp
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