General State of Japanese Interior Fabrics Business for Fiscal 1996

Market Size Determination

December 1997

Nippon Interior Fabrics Association JAPAN

The interior business experienced an upsurge in demand in the second half of fiscal 1996 in anticipation of a hike in the consumption tax in April 1997. This boost in demand was particularly evident in home applications. Among non-residential applications, demand created by store and office renovation picked up, as did demand from homes for the aged and other welfare facilities (health care). Figures here showed increases in all product areas over the previous financial year.

However, triggered by discount competition, price busting grew more intense amongst stores. In construction, despite petitions to general contractors and other large construction companies for improvements, including a rationalization of construction costs and business conditions, the practice of red-ink orders continued. This made it extremely difficult for the interior business to generate profits.

As a result, growth in value terms was not as great as growth in terms of volume, and the market size (wholesale conversion base) in fiscal 1996 was calculated at 328.92 billion yen (a year-on-year increase of 7.1%) for window treatment products , 345.1 billion yen (2.1% increase) for floor covering products and 221.31 billion yen (4.6% increase) for wall covering products.

The market size for window treatment products in fiscal year 1996 was calculated at 204.7 billion yen for curtains (year-on-year increase of 9.2%), 47.27 billion yen for blinds (3.0% decrease), 31.56 billion yen for screens and shades (8.0% increase) and 45.39 billion yen for curtain rails (8.7% increase). Therefore, the total market size was 328.92 billion yen (7.1% increase).

Curtains showed a double-digit increase (10.4%) over the previous financial year and market size also exceeded the 200 billion yen mark. This was partly due to an increase in housing starts, which is the main application for curtains. Housing starts topped the 1.6 million mark for the first time in 6 years since financial year 1990. Another contributing factor was significant growth in higher value order curtains. Growth was recorded in all product areas, and yarn dyed products, which had not increased over the last few years, also showed the first double-digit growth for some time. However, imported products, which had continued their offensive, seemed to reach a peak and were slightly down over the previous financial year.

The contract market for blinds remained sluggish and in spite of the increase in housing starts and the special demand created by the rise in consumption tax, demand centered on low-priced products, and financial 1996 was also down over the previous year (3.0% decrease).

As for screens and shades, roll screens, whose selection has widened owing to a diversification of materials and designs, continued to show steady growth (6% increase), and greater consumer awareness of window decoration has led to the popularity of Roman shades, which also maintained double-digit growth. While the market size for pleated screens is still small, it is expanding steadily.

Curtain rails were up 8.7% over the previous financial year, boosted by the large increase in housing starts and growing demand for decorative curtain rails. Related products also experienced steady growth.

Floor covering products are highly diverse, although the main three products are fabrics, plastics and wood. As in the past, the markets for carpet and plastic floor products were determined, as these are the products which NIF (Nippon Interior Fabrics Association) members most frequently handle.

The market size for floor coverings for fiscal 1996 was 300.3 billion yen for carpet (year-on-year increase of 2.3%) and 44.8 billion yen for plastic floor material (0.4% increase), bringing the total to 345.1 billion yen (2.1% increase).

The floor covering product market for fiscal year 1996 posted a slight year-on-year increase for the first time in several years, owing to a large increase of 11.2 % in construction-start floor area, particularly residential and commercial floor areas. Among carpet products, tile carpet recovered as a result of demand created by office renovation, and needle punch carpet also achieved considerable growth, owing to its use in automobiles rather than in construction.

As in previous years, market size was determined for only three types of plastic flooring for which data are available, namely composition tiles, regular vinyl sheets and cushioned flooring. Market sizes for fiscal 1996 were only slightly up over the previous year, but this is because the figures do not include PVC sheets with a foam layer, whose growth centering on medical facilities, homes for the elderly and other welfare facilities has been remarkable, or soft composition vinyl floor tiles, which has experienced rapid growth in applications for commercial outlets.

The Association again used wallpaper as a yardstick to determine the size of the wall covering market. Wallpaper Production and Shipment Statistics prepared by the Wall Covering Association of Japan was used as reference material. As for other wallpaper products sold in such stores as do-it-yourself stores, which are not included in the aforementioned statistics, the Association took an excerpt on wallpaper statistics from the Volumes and Values of Merchandise statistics from the Household Fusuma and Wallpaper Association.

The market size for wallpaper in fiscal 1996 was determined to have achieved year-on-year growth of 4.6% to reach 221.31 billion yen.

The wallpaper market in fiscal 1996 was buoyed by the large rise in house starts. Both production and shipment volumes posted the highest figures ever for the fourth consecutive year, breaking the 800 million square meter mark. While the percentage of mass-produced, lower-priced products was high, there is beginning to be increasing demand for wallpapers which take account of environment, health and safety, and the production and shipment volumes of paper wallpapers and non-vinyl wallpapers are also on the increase.

[Reference Material] Trend New Housing Starts (By Use)

(Unit: 1,000; figures in parentheses are as percentages of previous year's figures)

[Reference Material] Trend of Floor Area of New Homes (By Use)

(Unit: 1,000 m2; figures in parentheses are as percentages of previous year's figures)

[Reference Material] Trend of Floor Area of New Non-Residential (By Use)

(Unit: 1,000m2; figures in parentheses are as percentages of previous year's figures)

<Curtains>

The curtain market size in fiscal 1996 was calculated to be 204.7 billion yen, representing a year-on-year increase of 9.1%. A breakdown by domestic and imported products revealed that domestic products rose 10.4% (increase of 17.7 billion yen) from the previous fiscal year to 187.7 billion yen, while growth of imported products faltered, with the market falling 2.9% (decrease of 500 million yen) to 17 billion yen. (See Table 1.)

Conditions in the curtain market in fiscal year 1996 were favorable as a result of demand created by housing starts accompanying the rise in consumption tax, as well as a good match between demand and the plans for the curtain sample books issued by each company that year. Order-made curtains in particular experienced robust growth. In March 1997, the end of the financial year, there was cause for celebration for the first time in a long time, with each company's manufacturing facilities operating at full capacity, and some products being carried over to the next financial year. However, there was little growth in ready-made products, which is thought to be connected with the peaking of import products. In particular imports from Indonesia, China and Korea decreased considerably.

Despite strong demand, prices did not return to previous levels. On the contrary, 50% discount sales of order curtains became increasingly common, making 1996 a year which left behind major problems for the future. The gap between wholesale and retail prices appears to have widened as far as it can go and improvements are needed immediately.

A look at the domestic product market size by type reveals that while both yarn dyed products and cloth dyed products recorded a double-digit growth, growth for lace casement products remained around the 5% mark. However, while among other product types, ready-made products types experienced minimal growth, ready-made lace casement products grew at a similar rate to order-made products. Consequently, the ratio of order-made products rose for both yarn dyed and cloth dyed products, but remained about the same percentage as the previous year for lace casement products.

Total production of curtain products in fiscal year 1996 rose 9.5% (increase of 16,901,000 m2) from last fiscal year to 194,356,000 m2. Yarn dyed products, which had been on the decline in financial year 1996, posted a year-on-year increase (10.5%) for the first time in 3 years, and cloth dyed products, notably printed products, continued to gain ground. Although the growth rate for lace casement products was also 2.1 points down, production volume exceeded the figure for the previous financial year.

Statistical data used in determing market size

1) Domestic products: The average price unit and the ratio of order-made and ready-made products were determined through a fact-finding survey of NIF members, based on the curtain production volume results of the Chemical Fibres Association's "Survey Report of the Consumed Volume of Fibers in Interior Goods" (excluding accordion and blind cloth).

2) Imported products: Owing to a lack of official data, the market size was determined by estimating the share in the curtain market held by NIF members based on a fact-finding survey concerning imports of NIF members.

◆ The market size of both domestic and imported products are based on the average unit price of NIF members and any difference between this price and the actual average price in the market cannot be verified.

Table 1. Size of the Curtain Market (wholesale basis)

(Unit: 100 million yen; figures in parentheses are as percentages of previous year's figures)

Table 2. Market Size of Domestic Curtains by Type and Category (wholesale basis)

(Unit: 100 million yen; figures in parentheses are as percentages of previous year's figures)

[Reference Material] Curtain Production by Product Category

(Source: Japan Chemical Fibres Association)

(Unit: 1,000 m2; figures in parentheses are as percentages of previous year's figures)

<Blinds>

Blind market sizes for fiscal year 1996 came to 39.13 billion yen (a year-on-year decrease of 3.0%) for Venetian blinds (horizontal type), and 8.14 billion yen (3.0% decrease) for vertical blinds, bringing the total size to 47.27 billion yen (3.0% decrease). (See Table 3.)

In the fiscal 1996 blind market, although there were signs of a slight recovery in the office use market, which is the main application for blinds, there was a shift from blinds to fabrics, and the contract market continued to slump.

Meanwhile, demand in the residential market focused on low-price products, in spite of the demand created in anticipation of the consumption tax hike, and figures for fiscal year 1996 were down from the previous financial year.

Statistical data used in determining market size

1) Market size was determined using "Report on the Shipment of Interior Fabrics, Etc." issued by Textile and Apparel Products Division, Consumer Goods Industries Bureau, Ministry of International Trade and Industry and a fact-finding survey of NIF members.

Table 3. Market Size of Blinds (wholesale basis)

(Unit: 100 million yen; figures in parentheses are as percentages of previous year's figures)

<Screens>

Screen market sizes in fiscal year 1996 amounted to 24.38 billion yen (a year-on-year increase of 6.0%) for roll screens, 6.07 billion yen (18.1% increase) for Roman shades and 1.11 billion yen (4.7% increase) for pleated screens, resulting in a total of 31.56 billion yen (8.0% increase). (See Table 4.)

The screens and shades market for fiscal year 1996 saw greater diversification of materials and designs for roll screens and a wider choice for consumers. As a result roll screens continued to do well. Standard products were also sold at outlets such as wholesale stores and home centers, and a demand for these products was firmly established. Meanwhile, inspite of the fact that the main area of construction shifted to large windows for buildings, the demand in the construction market remained unchanged.

Roman shades performed well, helped by the trend of making greater use of fabrics, and the fact that they are available in such a wide range of designs, etc. Pleated screens also appear to have established themselves as a new contender in the market and are achieving steady growth.

Statistical data used in determining market size

1) Market size was determined by using "Report on the Shipment of Interior Fabrics, Etc." issued by Textile and Apparel Products Division, Consumer Goods Industries Bureau, Ministry of International Trade and Industry and a fact-finding survey of NIF members.

Table 4. Market Size of Screens and Shades (wholesale basis)

(Unit: 100 million yen; figures in parentheses are as percentages of previous year's figures)

<Curtain Rails>

The curtain rail market size in fiscal 1996 was determined to be 40.98 billion yen (a year-on-year increase of 8.8%) for curtain rails, 3.67 billion yen for related products (7.3% increase) and 740 million yen for (5.7% increase) for others, or a total of 45.39 billion yen (8.7% increase). (Refer to Table 5.)

As for the curtain rail market in fiscal year 1996, both decorative curtain rails and functional curtain rails made good progress owing to the large increase in housing starts which accompanied the rise in consumption tax. In particular decorative rails continued to achieve high growth, acting as a trigger in the trend towards fashionably decorated windows. Functional rails also improved steadily, in the wake of the boom in housing starts.

Heightened consumer interest in window decoration also led to the growth of related products. Fashionable products such as tassel fringes, valences and trimming drew attention as small items used in window decoration. This trend is expected to gather force in future, making it necessary for the industry to organize itself adequately in order to be able to respond.

Statistical data used in determining market size

1) Market size was determined using data by Japan Curtain Rail Industry Association.

Table 5. Market Size of Curtain Rails (wholesale basis)

(Unit: 100 million yen; figures in parentheses are as percentages of previous year's figures)

<Carpeting>

The market size for carpeting in fiscal year 1996 was determined to be 300.3 billion yen (year-on-year increase of 2.3%). A breakdown of this figure shows that the market for domestic products amounted to 157.8 billion yen (increase of 1.7%) and that for imported products to 142.5 billion yen (increase of 3.0%). In other words, both domestic and imported product markets expanded from last fiscal year. In determining market size, the Association used wholesale unit prices derived by taking into account the situation at each NIF member company based on "Report on the Shipment of Interior Fabrics, etc." compiled by Ministry of International Trade and Industry and a fact-finding survey of NIF members as well as figures from other statistical data.

In the carpeting market for fiscal year 1996, stores were able to restore prices to previous levels, and while tile carpet also made steady gains owing to a recovery in the office market, roll carpet continued to struggle. This was clearly demonstrated by market volume statistics. Tufted tile carpet posted a year-on-year increase of 9.4%, and needle punch carpet, which was a popular choice for automobiles, was also well up on the previous fiscal year, experiencing a 10.5% increase.

Hooked rugs also made steady progress, as their use on wooden flooring grew increasingly popular. Piece carpets became prevailingly used.

Despite a weaker yen, the volume of imported carpeting also increased in fiscal 1996, as the trend towards internationalization took an even firmer hold. According to the Monthly Report on Japanese Trade prepared by the Ministry of Finance, the volume of imported carpets in fiscal 1996 exceeded last fiscal year by 3%, while their value posted a massive 17% year-on-year increase. However, high costs in relation to the market due to the weak yen are not reflected in these figures and so only the volume increase represents the increase in market size.

Statistical data used in determining market size

1) Average unit price: NIF fact-finding survey

2) Domestic products: Japan Chemical Fibres Association's "Survey Report of Consumed Volume of Fibers in Interior Goods" and Japan Carpet Association's "Tufted Carpet Production Monthly Report"

3) Imported products: Ministry of Finance Monthly Report on Japanese Trade

Table 6. Market Size of Carpet (wholesale basis)

(Unit: 100 million yen; figures in parentheses are as percentages of previous year's figures)

Table 7. Market Size of Domestic Carpet (by product category, wholesale basis)

(Unit: 100 million yen; figures in parentheses are as percentages of previous year's figures)

[Reference Material] Carpet Production Volume by Product Category

(Source: Japan Chemical Fibres Association)

(Unit: 1000 m2; figures in parentheses are as percentages of previous year's figures)

<Plastic Floor Covering Materials>

Plastic floor covering materials can be classified into floor tiles, which may be either composition tiles or homogeneous tiles, and floor sheets, which may be either vinyl sheets without a foam layer (for example, regular vinyl sheets) and vinyl sheets with a foam layer (for example, cushioned flooring). Since there is no data available for plastic floor covering materials other than composition tiles, regular vinyl sheets, and cushioned flooring, the market sizes of these three products were determined.

The market size for plastic floor covering materials by product category in fiscal 1996 was 7.6 billion yen (the same as last financial year) for composition tiles, 11.5 billion yen (same) for regular vinyl sheets, and 25.7 billion yen (0.8% increase) for cushioned flooring, or a total of 44.8 billion yen (0.4% increase). (See Table 8.)

[Note] These figures do not include PVC sheets with a foam layer, where growth has been remarkable, centering on medical facilities, homes for the elderly and other welfare facilities. Nor do they include soft composition vinyl floor tiles, which have also seen a very strong increase in use in stores.

The plastic floor covering materials market in fiscal year 1996 continued the trend of the last few years, in which figures remained on the same level or slightly decreased. Composition tiles and regular vinyl sheets are used consistently in buildings such as schools, hospitals and factories, but growth was hampered owing to factors such as a sluggish office market and the shift towards tile carpets as floor covering in school buildings.

Against a background of demand created by the purchase of apartment houses in anticipation of the consumption tax hike, the sales volume of cushioned flooring expanded as a result of factors such as the increase in house starts and a flurry of store construction and refurbishment. However, the fall in unit selling prices hit home, causing the increase in market value to be only minimal.

Statistical data used in determining market size

1) Average unit price: NIF fact-finding survey

2) Production volume: Statistical materials of the Interior Floor Industrial Association

Table 8. Market Size of Plastic Floor Covering Materials (wholesale basis)

(Unit: 100 million yen; figures in parentheses are as percentages of previous year's figures)

<Wallpapers>

The wallpaper market in fiscal year 1996 was determined to have expanded 4.6% from the last fiscal year to 221.31 billion yen. A breakdown by category reveals that the figures were 8.77 billion yen for paper wallpaper (year-on-year increase of 30.5%), 8.22 billion yen for cloth wallpaper

(decrease of 8.5%), 186.4 billion yen for vinyl wallpaper (increase of 4.6%), 650 million yen for chemical fiber wallpaper (decrease of 13.3%), 13.98 billion yen for inorganic wallpaper(decrease of 6.7%), 3.26 billion yen for special wallpaper (increase of 254.3%), and 300 million yen for other wallpaper(decrease of 96.7%).

In fiscal 1996, for the first time, both total production and shipment volumes of wallpaper exceeded the 800 million m2 mark, making this the fourth consecutive year in which a new record was set. This growth can be attributed to the favorable effects of the large increase in housing starts which accompanied the rise in consumption tax. In particular, demand for apartment houses with large areas was a major contributing factor to this volume increase.

The trend which emerged last fiscal year for residential construction companies to address environmental issues picked up momentum, with the use of recycled paper wallpaper (Ecomark wallpaper) increasing and paper wallpaper was up by a massive 62.5% from the previous year to 19,520,000 m2 (in terms of shipment).

Nevertheless demand focused on vinyl wallpaper, which in terms of shipment grew 10.0%, so that vinyl paper alone exceeded 700 million m2. However, the fact that growth in terms of value was small in comparison with growth in volume terms is a sign that the percentage of mass-produced wallpaper is becoming higher.

Cloth wallpaper was down from the previous fiscal year for the eighth consecutive year. Inorganic wallpaper's 4% fall in the face of a 10% rise in wallpaper overall marked the end of its period of high growth.

As environmental issues came under the spotlight, demand for special wallpapers increased rapidly, bolstered by growth in olefin and acrylic non-PVC wallpapers and painted wallpaper. Shipments of special wallpapers were about 3.5 times that of the previous fiscal year.

The large gains made by paper wallpaper and special wallpapers may seem small in the context of the wallpaper market overall, but these gains are perhaps an indication of the future direction for wallpapers.

Statistical data used in determining market size

1) Since there is no official data on imported products, the Association used "Report on Imports of Interior Fabrics" compiled by Ministry of International Trade and Industry as a base to estimate the share of imported products in the markets of NIF members.

2) "Produced and Shipped Volume of Wallpaper" of the Wall Decoration Material Association was used. The Wall Decoration Material Association is the largest domestic organization consisting of approximately 100 domestic wallpaper manufacturers. To control fire retardant wall decoration materials in accordance with the enforcement regulations of the Building Standards Law, the Association requires member companies to compile a monthly report on both production and shipments, which are compiled into the "Produced and Shipped Volume of Wallpaper." Therefore, this report was used as it is recognized to be sufficiently reliable.

※ There may be some errors in the total values for each item in each of the wallpaper tables owing to the rounding up of totals.

Table 9. Market Size of Wallpaper

(Domestic products, Imported products, wholesale basis)

(Unit: 100 million yen; figures in parentheses are as percentages of previous year's figures)

Table 10. Market Size of Wallpaper (by product category, wholesale basis)

(Unit: 100 million yen; figures in parentheses are as percentages of previous year's figures)

[Reference Material] Wallpaper Production and Shipment

(Unit: 1,000 m2; figures in parentheses are as percentages of previous year's figures)

[Source: Wall Decoration Material Association]

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