Competitive Edge over Low Pricing Towels : : Branding of Imabari Towel Japan (Part 1)

When you google “Imabari”, you will probably find out that the most outstanding recalls about Imabari-shi are shipbuilding and towel manufacturing. These industries became recognized simply because of its geography. Imabari-shi is located at the Seto Inland Sea of Japan, where maritime culture is implanted into the daily life from the beginning of modernism. Naturally, Imabari-shi has developed its maritime connection from shipbuilding to trade port.

Areas around Osaka and Nagoya are better in growing cotton, but the quality is the best. Basically, during Meiji Restoration (1868-1912), cotton is tended to be imported. With a longer history of cotton growing, Osaka is the largest centre of weaving industrial.

Though Imabari-shi is not the best place to grow raw cotton, through the effort of a Imabari-born entrepreneur, Heisuke Abe, state-of-the-art cotton-weaving machinery was introduced in 1894. Up to now, Imabari-shi (was once called “Manchester city of Japan”) is the largest towel production base in Japan. Almost 60% of towels produced in Japan is made by over 200 towel production plants in Imabari-shi.

Starting from 1990s, Japan was emerged into a large scale of economic crisis. Many smaller uncompetitive companies went bankrupt and mills started to close down throughout Japan. Larger manufactures have shifted their production plants overseas. Despite of the whole crisis of Japan, many towel manufacturers in Imabari-shi focused on the quality of their products. They survived in the hard time.

[Data 1] Value & volume of exports of terry towels in India (source: Zauba Technologies & Data)
Monthly Value USD 74.91M
Monthly Quantity 30.68M
Average price per unit USD 2.44
Average value per shipment USD 9,993

Worst of all, inexpensive towels made by Asian countries, like India and China, harm its industrial most. Globalization of economy leads the unit price of towels lower and lower. Recent article shows that India is the second largest raw cotton exporter (China and India produced 6,532 and 6,423 thousand metric tons in 2014 respectively.)

[Data 2] Top cotton producing countries in 2014 in thousand metric tons (source: Bremen Cotton Exchange)
China 6,532
India 6,423
United States 3,553
Pakistan 2,308
Brazil 1,524

With just a little more effort invested into spinning and weaving machinery, India is the largest towel exporter to the United States.

[Data 3] Top terry towel exporters to the United States for 2013 on valued (source: Export Promotion Bureau,  Bangladesh)
India USD 572.7M
China USD 488.5M
Brazil USD 114.4M
Turkey USD 87.8M
Bangladesh USD 53.2M

“…One in every seven towels sold in America is made either at Anjar or Vapi, a few hours’ drive from Mumbai, India’s commercial capital…” – The Economist, July 2015

[Data 4] Wages per hour of garments factory workers 2016 around the world (source: Bangladesh Textile Today)
Vietnam USD 0.36
Bangladesh USD 0.40
Indonesia USD 0.44
India USD 0.51
Pakistan USD 0.56
China USD 1.66

“…There was a total of 42 antidumping duty orders imposed by the US against China in effect as of December 31, 2001… Two cases related to cotton cloth and towels were in effect as early as 1983…” – The Chinese Economy After WTO Accession, 2006

[Data 5] Increment of exports of textile by value as in 2013 to 2004 (source: WTO)
Vietnam 7.4
China 3.3
Bangladesh 3.2
India 2.7
Pakistan 1.5

 

In 2006, Shikoku Towel Industry Association Cooperative based in Imabari-shi, which represents manufacturers in Imabari-shi of Shikoku, went to consult brand consultant, Mr. Tatsuki Toyama of Interplanning Ltd. Mr. Toyama sincerely proposed and encouraged the Association to apply for the “Japan Brand Incubation Supporting Programme” in which a total of progressive fund of 30 million JPY (roughly, 270000 USD) will be subsidized by The Small and Medium Enterprise Agency of Japan during the three-years programme.

After an initial approval of the Programme, Mr. Tatsuki Toyama also proposed a bolder move. He approached one of the most famous Japanese creative director, Mr. Kashiwa Sato of Samurai Inc., to assist their branding revamp.

At first, Mr. Kashiwa Sato was not comfortable to accept their invitation. What did Mr. Toyama do to convince Mr. Sato?

(To be continued…)

Index ::

  • Part 1: Competitive Edge over Low Pricing Towels, 15/4/2017
  • Part 2
  • Part 3
  • Part 4
  • Part 5
  • Part 6

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