- A visit was arranged to the Japan Chemical Shoes Industrial Association, a manufacturers' association based in Nagata-ku, Kobe City. As one of the major disaster zones, Nagata-ku suffered considerable damage in the Great Hanshin and Awaji Earthquake two years ago. The traces of the disaster are still quite visible today; temporary dwellings and empty plots of land found amidst newly constructed houses and buildings remind us of the grave cataclysm. The Japan Chemical Industrial Association building was also destroyed in the quake, and a large sum of money was put in for its restoration.
- Out of the 235 association members that existed prior to the quake, 208 firms have recovered business activities, while the remaining 27 have either closed or changed businesses due to bankruptcy of contractors or the hovering economy. Within the 208 members that have restarted operation, there are many firms that have reduced the sizes of their businesses, thus dropping their productivity level to about half. This is due mainly to unfavorable investment conditions resulting from lack of funds, decreased orders from wholesalers as a result of the economic recession, and price destruction resulting from the influx of imported goods.
- With a great number of factories either totally or partially destroyed in the quake, wholesalers that anticipated lack of products promptly shifted their orders to China, Indonesia and other foreign countries in an attempt to secure goods. These locally designed products that were imported in emergency, however never picked up in the Japanese market. They instead, were abandoned and still remain unsold today, thus creating a great surplus in stock. Because of this, many warehouses are still fully occupied.
- In contrast to previous imports from China, Indonesia, Hong Kong, Taiwan, Korea and Singapore, a growing number of imports are recently coming from India and Vietnam. Brand products, such as Christian Dior and Lancel, are also imported from France, Italy and Spain; office girls in their 20's will pay as much as 40,000 to purchase such products. Recently, imports from China are substantially increasing.
- Imported products are increasing given the continuing decrease in import duties every year.
- Several makers of chemical shoes have successfully entered the overseas market in Shanghai and Tianjin in China. Products are manufactured in these areas and re-imported for domestic sales or exports to the US.
- Currently, about 30% of makers are engaged in OEM production under wholesaler brand, instead of renowned overseas brands. These wholesaler brands are relatively well received in the Japanese market.
- Although exports of chemical shoes previously concentrated mainly to Europe and America, these exports are almost close to none today following the dollar and oil shocks. Currently, there are only a few exports of Japanese products to Taiwan and China through wholesalers.
- Large retailer stores like supermarkets import products directly from overseas. Although department stores basically import goods via wholesalers, there are a few cases in which products are supplied directly by the association members. As a recent trend, there are member firms that create antenna shops and sell directly to consumers, or set member prices against consumers and sell directly at cheaper prices through the internet. In such way, much chaos can be seen in recent sales strategies.
- Wholesalers, who were the former leaders of the industry, are gradually being replaced by retail stores.
- Chemical shoes can generally be divided into four types: sneakers, pumps, casual shoes and sandals, and boots. Sneakers hold the largest share among men's and children's footwear, while pumps and casual shoes possess the highest ratio among women's shoes. Women's summer sandals, produced mainly in Shizuoka and Nara prefectures, are sold mostly between March to July.
- Shoe uppers are made from 60% leather, 30% synthetic leather and 10% fabric. As with finished products, there is no import quota on leather when solely importing shoe uppers. Given this advantage, there are a number of makers that import leather shoe uppers from Brazil and finish them in Japan, and this trend is expected to further multiply in the future.
- The selling elements of chemical shoes lie in pricing and variation in design and color. This is because chemical shoes come available in colors that cannot be produced in leather products. Japanese chemical shoes are superior in technology and primarily characterized by comfort and preservation of shape. Thanks to Japan's technological support over the years, Taiwanese products have also become stabilized in quality and cheaper in cost in recent years.
- A number of Japanese makers are currently seeking import of women's synthetic leather heels from overseas countries. This gives rise to possible business chances in exports of shoe uppers to Japan, as shown above.
- Current shoe production ratio is approximately 65% women's shoes, 22% men's shoes, 20% children's shoes and 3% specialized shoes.
- Future outlook can primarily be based on the principle of "survival of the fittest," i.e., the higher the capability of the member firm, the more likely to survive. Unlike other industries, however, successors are abundant in the chemical shoe industry. Whether they enjoy the benefits of being second or third generations, it is a relief that these businesses are successfully being carried on by succeeding generations.
- Imported goods are expected to further increase along with the growing competition with Asian countries, while reduction in import duties also leaves the industry in strong rivalry with European products. Though a hackneyed expression, there can be no other way to survive other than to place added value to products through technological innovation and new developments not found elsewhere.
- Recently, there are several manufacturers adding on staff and more employment ads can seen on the paper. Whether this has to do with the moderate recovery in economical conditions or not, it is sincerely hoped that the economy will return to its previous condition and that the current decline in productivity level will recover to its normal level as soon as possible.
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