Japanese Cotton Traders: Competition Shifting from Price to Performance

Although Japan is no longer a major raw-cotton-importing country, it is a big textile consuming market. Japan is the 4th-largest consumer of cotton at a retail level, and the 4th-largest consumer of overall textile fibers, including man made fibers (MMFs).

Japan’s cotton consumption is about 1.3 million tons at the end-user or retail levels. Japan imports only 67,000 tons of raw cotton; therefore the balance is imported as apparel and textile finished goods. Recent data show that more than 96% of cotton and cotton-blend apparel sold at retail in Japan is sourced or imported from overseas, with China as the dominant supplier with 80% of total imported apparel.

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Japanese traders, spinners, and large retailers are deeply involved in the global supply and value chain, from the selection of cotton fibers to manufacturing and technical controls, to meet quality standards and fashion trends of Japanese consumers.

Comfort vs. Function

Japanese traders cover every aspect of the textile supply chain from upstream to retailing, but focus more on the downstream market. By the same token, many spinning mills have moved downstream as well, expanding into new business areas beyond textiles. This makes us more conscious of our connection to consumers.

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Putting the Best of Both Worlds Together

Cotton is being challenged on two fronts. On the production side, cotton is competing with food and feed crops for acreage. On the consumption side, cotton’s textile market share is being challenged by MMFs, not only in price but also in technology.

Japan has a rapidly aging population, a shrinking workforce and significant changes in the proportions of young and old. China and northeast Asia will soon face the same problems. These will lead to a declining consumption of textiles and cotton and will influence consumer’s preference. Cotton has an image of being renewable, environmentally friendly, traceable and comfortable, but MMFs increasingly appeal to our Japanese customers due to improving technology and functionality. Competition now has changed from price advantages to performance.

I would like to bring attention to Japan and the effect technology is having on cotton consumption. Elderly people are shifting from cotton underwear to MMFs because they are lighter and warmer in winter and quick-drying and cooler in summer. High-tech MMFs are much more expensive than 100% cotton underwear, but customers are willing to pay the premium for the performance.

Not too long ago, the retail target was the price point. Now the end consumers are recognizing MMFs as a fashion trend with performance advantages.

To ensure that we do not lose additional market share to MMFs, we need to work more closely with our retail customers to design cotton products that meet the demands of the end consumer. We traders also need to be customer-conscious and listen to their voices.

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