Furniture - Market Japan - With America's Best!

Business America, Oct 10, 1988

Household Furniture-The decline in the value of the dollar relative to the yen has created significant opportunities for U.S. exports of household furniture to Japan. U.S. exports of household furniture rose 19 percent in 1987 following declines in four of the five previous years. What's more, after a 47 percent increase last year, shipments in the first four months of 1988 jumped 85 percent over the same period in 1987.

Most U.S. furniture shipped to Japan is made of wood.

The Japanese market for wood furniture was reported to be $6.7 billion in 1984 at the wholesale level. Separate estimates for 1982 show a retail furniture market value of $10 billion.

Imports of wood furniture into Japan are only a small part of the total market, accounting for less than 5 percent of apparent consumption. Most of these imports are shipped from East Asian countries, particularly Taiwan. Major U.S. competitors for household furniture are Italy, West Germany, Denmark, and Sweden.

Furniture shipped to Japan is subject to a 20 percent commodity tax. The tax is imposed on top of a 3.8 percent tariff on most household items. A problem which U.S. exporters of household furniture face in Japan is the smaller size of Japanese homes.

Most wood furniture from Europe and the United States is imported by specialty trading companies and specialty import furniture stores. Demand for Western-style imported furniture is growing among Japanese consumers. Furniture of high-quality and refined design is sought after particularly by more affluent Japanese consumers.

Office and Institutional Furniture-U.S. exports of office furniture to Japan have been steadily risingfrom $3.1 million in 1983 to $8.4 million in 1987. Sales exploded during the first four months of 1988, more than doubling shipments in the same period of the previous year.

In Japan, most office and institutional furniture is made of metal, the wholesale market value of which was $1.9 billion in 1986. Major Japanese manufacturers dominate the market. Indeed, imports account for less than one percent of sales. The United States was the number-two foreign supplier to Japan in 1986, behind Taiwan. Italy, West Germany, and Norway also ship business furniture to Japan.

Japan maintains no regulatory barriers to imports of business furniture. Tariffs on most furniture items are 3.8 percent of the c.i.f. value. A commodity tax of 20 percent is levied on desks, tables, chairs, and partitions exceeding a certain value. An obstacle for American manufacturers exporting business furniture to Japan may be size specifications set forth in the Japan Industrial Standard (JIS).

In Japan, open offices account for the vast majority of office layouts. Partitions and similar products are thus in demand. Additionally, furniture designed for office automation is expected to grow rapidly since half of automated offices now employ furniture designed for this purpose.

For further information about the furniture industry, call Kevin Ellis on (202) 377-1140.