- The history of clocks and watches in Japan dates back to 1872 when the first domestically-produced wall clock saw the light of day.
- The first country that springs to mind in connection with watches is Switzerland, but both in terms of output and volume of exports, Japan has led the world in this field since 1977.
- The clock and watch industry used to be a typical labor-intensive industry, but it has become a knowledge-intensive one due to the introduction of a range of electronic technologies, and Japan now meets over half of the world demand for an estimated 900 million clocks and watches.
- However, because of the high cost of labor and raw materials in Japan as well as the fall in the number of components required due to the increasing use of quartz, the integration of components and rationalization of production processes, leading makers such as Seiko, Citizen, Orient and Ricoh have started moving overseas. Moving first to Taiwan and Korea and then to Hong Kong and Singapore in search of lower wage costs, manufacturers are now increasingly moving into countries such as China and India.
- In addition, the mass production of semiconductors and liquid crystal cells has reduced production costs, and it has now become possible to manufacture a variety of watches in small quantities.
- Watch design has developed in two different directions: the design of luxury items made from precious metals and jewels, and that of low-cost items for practical use.
- Recently watches with alarm, recording, pulse/blood pressure reading and stopwatch functions have become more common.
- In addition to luxury items being imported from Switzerland as in the past, there has been a marked increase in imports from China and reverse exports from Japanese companies that have expanded overseas. Following the collapse of the bubble economy there was a temporary fall in imports, but they have now returnedto their former level. The following statistics give an indication of the current level of imports. (Quantity in piece values in JY 1,000.)
Watches
| Year |
Quantity |
Value |
| 1990 |
30,608,646 |
127,795,441 |
| 1993 |
47,116,986 |
102,482,513 |
| 1995 |
56,743,917 |
128,144,344 |
Watches Movements
| Year |
Quantity |
Value |
| 1990 |
14,883,518 |
8,141,910 |
| 1993 |
12,916,836 |
6,532,251 |
| 1995 |
6,770,011 |
3,569,830 |
Total
| Year |
Quantity |
Value |
| 1990 |
45,492,164 |
135,937,351 |
| 1993 |
60,033,822 |
109,014,764 |
| 1995 |
63,513,928 |
131,714,174 |
(Source: Ministry of Finance trade statistics) These figures indicate that unit prices of imports are falling. The proportion of imports that are reverse exports from Japanese companies overseas is unknown as statistics are not available.
- Exports of watches (including watch movements) from Japan are as follows:
| 1992 |
335,234,000pcs |
JY 254,46 billion |
| 1995 |
401,507,000pcs |
JY 159.439billion
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Here too it can be seen that although the volume of exports is increasing, the value is falling and cheap watches/cheap movements are being exported mainly to Asia from Japan.
- The ratio of watches/movements produced domestically, exported and imported is as follows:
|
Production |
|
Exports |
|
Imports |
|
| Year |
1000pcs |
JY million
|
1000pcs |
JY million
|
1000pcs |
JYmillion |
| 1994 |
393,187 |
200,306 |
376,157 |
176,626 |
68,405 |
118,066 |
| 1995 |
396,802 |
182,514 |
401,507 |
159,439 |
63,514 |
131,714 |
(Source: Japan Watch Importers' Association) *The reason why the volume of exports is higher than output in 1995 is that stocks produced the previous year were exported.
- In addition to being reliable and of good quality, watch movements made in Japan have fallen in price due to mass production and are now exported at a unitprice of from around JY200-500.
- It is a surprising fact that quartz miniature decorative clocks and watches made in Hong Kong using these Japanese-made movements are on offer for US$3.50 and US$4.50 respectively per unit F.O.B. Hong Kong.
- Customs figures showing imports of watches only by country for 1995 are shown below.
| Country |
Quantity |
Value(JY 100mill.)
|
% |
| Singapore |
3 |
1.0 |
|
| Thailand |
49 |
2.8 |
|
| France |
24 |
22.0 |
1.6 |
| Taiwan |
96 |
23.0 |
1.7 |
| Korea |
37 |
33.0 |
2.5 |
| China |
3,629 |
144.0 |
11.0 |
| Hong Kong |
1,605 |
162.0 |
12.0 |
| Switzerland |
348 |
880.0 |
67.0 |
| Others |
560 |
49.2 |
4.2 |
| TOTAL |
6,351 |
1,317.0 |
100% |
(Source: Japan Watch Importers' Association)
Average unit prices of imports (watches only) were as follows:
| Year |
Watches(yen)
|
Swiss Watches(yen)
|
| 1988 |
1,252 |
24,605 |
| 1989 |
2,372 |
40,398 |
| 1990 |
4,175 |
51,238 |
| 1991 |
4,182 |
56,756 |
| 1992 |
3,272 |
39,030 |
| 1993 |
2,175 |
22,118 |
| 1994 |
1,879 |
24,411 |
| 1995 |
2,258 |
28,127 |
(Source: Japan Watch Importers' Association)
It can be seen from the above that although the unit price of Swiss watches has fallen, it is still more than ten times higher than the average for imports fromother countries. It should be noted that recently, old-style mechanical watchesaccount for 30% of the value of imports.
- As indicated above, the Japanese market consists of two different kinds of consumers: those just seeking a cheap but reliable and accurate watch, and thosewho are more brand conscious and want to buy a high-quality watch costing between JY100,000-200,000 as a piece of jewelry and a fashion accessory.
- As Asian watchmakers will sell to anyone at the same price, Japanese importers lose any incentive to carefully open up and nurture the market. In theJapanese market, it is essential to market products with the objective of developing one's own brand. There is domestic Japanese demand for around 80 million clocks and watches per year.
- There will be no significant growth in imports in future, with growth of about 5% at most predicted.
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