By Sanjay Arora, Wazir Advisors (sanjay@wazir.in)
Japan is the 3rd largest importer of Textile and Apparel (T&A) in the world with an import value of US$ 37.14 billion in 2019. Japan’s T&A imports have grown from US$ 35.37 billion in 2015 at a CAGR of 1.2%. On the other hand, T&A exports of Japan stood at US$ 7.74 billion in 2019, slightly lower than US$ 7.84 billion in 2015 at a rate of 0.3%.
Imports Profile of Japan
The top five suppliers of Japan account for about 80% of the total Japanese T&A imports. China dominates with a 56% share, accounting for a value of US$ 20.7 billion. Vietnam follows China at a distant second with a share of 14%. Indonesia, Bangladesh and Myanmar closely compete with each other with a share of 4%, 3% and 3%, respectively.
Apparel is a dominating category in the Japanese T&A imports with a share of 75%. This is followed by Other textiles (which include home textiles and other textile material not made up of Cotton or MMF), Man-made (MMF) textiles, Cotton textiles, and Carpets with a share of 10%, 9%, 4%, and 2%, respectively.
Jerseys, pullovers, cardigans, waistcoats, and similar articles made up of cotton and manmade fibres are the top imported categories by Japan.
Manmade Textile and Apparel market – Potential Category for India to increase its share in Japan
India is the 9th largest supplier of textile and apparel products to Japan with total exports worth US$ 0.49 billion in 2019 and has registered a growth of CAGR of 3% over the last 5 years. While India’s share in Japan’s imports remained constant at 1% over the last 5 years, China’s share for the same has increased from 37% to 40% over the same period.
With respect to Indian exports, apparel was the most imported category with a share of 57%, followed by Cotton Textiles, Others, Man-made Textiles and Carpets having a share of 21%, 10%, 7%, and 5%, respectively.
The major categories exported from India to Japan are Cotton Jerseys, Cotton T-shirts, Cotton Shirts, Jackets, and Cotton Dresses. As mentioned above, Japan is the third largest apparel importer even though the the population of this island nation is comparatively small when compared to other key global markets. Moreover, Japan is also the third largest economy after USA and China. Given the high per capita expenditure and consumption of apparel, Japan poses itself as a huge apparel market for India. Japan imports a fair share of both cotton-based as well as MMF based apparel. While Indian manufacturers have more or less mastered the skill of exporting cotton-based apparel, the same is not true for MMF-based apparel. A high market potential awaits Indian apparel manufacturers in the form of MMF-based garments.
The government of India has also realized the importance of supporting this segment and has come with the Production Linked Incentive Scheme (PLI Scheme) to promote the production and export of MMF-based apparel from India. The combined benefits of the PLI scheme and the Duty-free access into the Japanese market can be an important reform for the Indian apparel exporters.
Wazir Advisors, your trusted business advisor in Textile and Apparel sector can assist you in strategy formulation and implementation, forming alliances and joint ventures, investments, market understanding, sector analysis and due diligence, thereby providing end-to-end solutions spanning the complete business cycle in textile value chain. Wazir can also help you in understanding and strategizing your business to align well with the PLI scheme.