General State of Interior Fabrics Business

for Fiscal 1998

<Market Size Determination>

Current state of the Interior Fabrics product Market

General Remarks

Window treatment products 268.2 billion yen

Floor covering products 297.5 billion yen

Wall covering products 156.7 billion yen

In fiscal 1998, the interior business faced a situation of unprecedented severity, owing to the dramatic decline in the number of construction starts for both housing and non-residential properties, which is seen as an index of demand, and inactive consumer spending following the rise in the rate of consumption tax conducted the previous April. Further deterioration followed unfavorable sales competition in the interior sector accompanied by a falling unit price rate and heavy discounting on construction orders. As a result, the fall in value outstripped the fall in volume and failed to produce substantial profits.

The market size (wholesale conversion base) in fiscal 1998 was calculated at 268.25 billion yen for window treatment products (a year-on-year decrease of 13.3%), 297.5 billion yen for floor covering products (11.6% decrease), and 156.74 billion yen for wall covering products (21.3% decrease). This is the first time in the history of this survey that double double-digit declines have been registered.

Window treatment products

The market size for window treatment products in fiscal 1998 was calculated at 161.1 billion yen for curtains (a year-on-year decrease of 14.1%), 39.51 billion yen for blinds (13.8% decrease), 30.29 billion yen for screens and shades (7.9% decrease), and 37.35 billion yen for curtain rails (13.5% decrease). Therefore, the total market size was 268.25 billion yen (13.3% decrease).

Curtain sales continued to fall from the previous fiscal year as the number of housing starts, the key market, posted a second year of double-digit decline. Although the market size for curtains topped 200 billion yen in fiscal 1996, it has fallen more than 40 billion yen in only two years. This is a clear indication that we must actively create demand ourselves, for example by developed a market for renovations.

Domestic product sales were less than 150 billion yen, while sales of imported product fell on a year-on-year basis for the third straight year, declining at a faster rate each year.

Blind sales posted a double-digit decline (13.8%) from the previous fiscal year, falling on a year-on-year basis for the last consecutive six years. This reflects persistent decline in the contractor market, the mainstay office applications market, and the housing market.

Turning to screens and shades, pleated screens became firmly established in a market as a new element for windows. Although the market size remains small, sales were favorable with a 13.1% increase on a year-on-year basis. Sales of roll screens and Roman shades fell below the previous year's level for the first time. Nonetheless, the decline in sales of roll screens and Roman shades was less than that for other elements for windows, and substantial efforts were expended for these products in a difficult environment.

The market for curtail rails contracted a significant 13.5% compared with the previous fiscal year, the result of a steep decline in the number of housing starts and a substantial fall in the market for decorative curtain rails.

Floor covering products

Floor covering products are highly diverse, although the leading 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 Nippon Interior Fabrics Association (NIF) members most frequently handle.

The market size for floor coverings for 1998 was 257.4 billion yen for carpets (a year-on-year decrease of 12.3%), and 40.1 billion yen for plastic floor materials (6.5% decrease), bringing the total to 296.5 billion yen (11.6% decrease). Influential factors were a decrease in construction starts by floor areas of 10.5% for housing and 15.2% for non-residential property, a considerable drop from the previous fiscal year, which was coupled with a decline in consumer spending.

Sales of all carpet types were down from the previous fiscal year, with the exception of plain fabrics, a small market which held steady. For instance, demand for mainstay tufted carpets experienced a double-digit decline, and sales of tufted tiles were also down somewhat on a year-on-year basis (3.6% decrease). notwithstanding the success in the market for renovations.

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. Although these three types products experienced a severe environment because of the fall in the volume of construction starts, sales of composition tiles were on a par with the results of the previous fiscal year. Sales of cushioned flooring were down 8.2% compared with the previous fiscal year, influenced by the diminished number of housing starts, as this product is mainly used for housing. Regular vinyl sheet sales also fell 6.4%.

Wall covering products

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 the reference material. For other wallpaper products sold in such stores as do-it-yourself (DIY) outlets, which are not included in the above statistics, the Association took an excerpt from the wallpaper statistics, "Volume and value of products sold," produced by the Household Fusuma and Wallpaper Association.

The market size for wallpaper in fiscal 1998 was 156.74 billion yen, representing a year-on-year decrease of 21.3%.

With a considerable decrease in the number of housing starts, sluggish demand for wallpaper replacement and harsh sales competition, the wallpaper market for fiscal 1998 contracted an extraordinary 21.3%, an unprecedented decline. Meanwhile, environmental issues have come to the forefront and production and shipment of environmentally-friendly wallpaper has increased, including paper-made and EVA wallpapers. We expect these products will serve to halt the continued reduction in market size.

[Reference Material]

Trend in New Housing Starts (By Use)

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

	Total	Lived in by owner	Rental	Employee housing	Condominium
Fiscal 1994	1,561 (103.4)	581 (108.2)	574 (88.1)	28 (89.6)	378 (130.1)
Fiscal 1995	1,485 (95.1)	551 (94.8)	564 (98.2)	26 (92.4)	345 (91.3)
Fiscal 1996	1,630 (109.8)	636 (115.4)	616 (109.2)	26 (100.0)	352 (102.0)
Fiscal 1997	1,341 (82.3)	451 (70.9)	516 (85.7)	24 (91.8)	351 (99.6)
Fiscal 1998	1,180 (87.9)	438 (97.1)	444 (86.1)	16 (66.0)	282 (80.4)

[Reference Material]

Trend of Floor Area of New Homes (By Use)

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

	Total	Lived in by owner	Rental	Employee housing	Condominium
Fiscal 1994	146,616 (108.8)	80,605 (109.5)	30,347 (91.2)	1,998 (90.7)	33,667 (130.8)
Fiscal 1995	138,139 (94.2)	75,632 (93.8)	29,479 (97.1)	1,808 (90.5)	31,221 (92.7)
Fiscal 1996	157,014 (113.7)	89,740 (118.7)	32,678 (110.9)	1,824 (100.9)	32,772 (105.0)
Fiscal 1997	123,751 (78.8)	62,784 (70.0)	26,820 (82.1)	1,726 (94.6)	32,421 (98.9)
Fiscal 1998	110,978 (89.7)	60,916 (97.0)	22,740 (84.8)	1,176 (68.1)	26,145 (80.6)

[Reference Material]

Trend of Floor Area of New Non-Residential (By Use)

(Unit: 1,000 m2, figures in parentheses are as percentages of previous yea’s figures)

	Office	Store	Factory	Warehouse	School	Hospital	Others
Fiscal 1994	11,073 (86.5)	10,627 (100.9)	13,663 (96.4)	10,555 (92.1)	5,416 (91.3)	3,221 (119.9)	26,297 (98.8)
Fiscal 1995	10,972 (99.1)	12,201 (114.8)	14,182 (103.8)	10,275 (97.4)	5,376 (99.3)	3,831 (118.9)	26,460 (100.6)
Fiscal 1996	11,801 (107.6)	13,239 (108.5)	16,952 (119.5)	12,036 (117.1)	5,497 (102.3)	4,392 (114.6)	26,383 (99.7)
Fiscal 1997	11,191 (94.8)	14,662 (110.7)	17,247 (101.7)	10,854 (90.2)	4,819 (87.7)	4,301 (97.9)	24,282 (92.0)
Fiscal 1998	8,593 (76.8)	13,289 (90.6)	11,443 (66.3)	8,639 (79.6)	5,071 (105.2)	5,032 (117.0)	22,005 (90.6)

Window Treatment Products

[Curtains]

The curtain market size in fiscal 1998 was calculated to be 161.1 billion yen, representing a year-on-year decrease of 14.1%. This double-digit reduction continues the steep fall experienced in fiscal 1997, and represents a shift towards a downward trend which began in the second half of fiscal 1997.

A breakdown by domestic and imported products shows that domestic products continued last year's decline, falling short of 150 billion yen. Meanwhile, the fall in imported products was unprecedented, the decline of approximately 25% representing the third consecutive annual decrease, and these products accounted for 11.5 billion yen. (See Table 1.)

A breakdown by type and product category shows that order-made curtains fell more than 10%, although they surpassed ready-made curtains, accounting for 120.6 billion yen. This reflects the overall severe situation that confronted the curtain market throughout the previous fiscal year.

Looking by product category, sales were down from the previous fiscal year in all categories, led by a dramatic fall in cloth-dyed products. (See table 2.)

Total production of curtain products in fiscal 1998 was 181.66 million square meters, down 9.6% from the previous year. This suggests a significant change from the rising trend of the last several years. In the previous year, a growing divergence was revealed between the rise in production (3.4% increase) and the drop in the wholesale basis market size (8.4% decrease). Meanwhile, the stagnation of the curtain market had a clear impact on production volume.

It is believed that this is greatly influenced by the considerable slump in the number of housing starts (1.18 million houses/flats; a year-on-year decrease of 12.1%) and the downward trend of average unit prices, continuing on from the previous fiscal year. Our challenge is to create a market that is largely impervious to the number of housing starts, which namely means developing a business to create and find demand in the renovation market, such as for replacements.

Statistical data used in determining market size

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

		Fiscal 1995	Fiscal 1996	Fiscal 1997	Fiscal 1998
Total size		1,875 (103.6)	2,047 (109.1)	1,876 (91.6)	1,611 (85.9)
	Domestic products	1,700 (102.6)	1,877 (110.4)	1,724 (91.8)	1,496 (86.8)
	Imported products	175 (114.4)	170 (97.1)	152 (89.4)	115 (75.7)

Table 2. Size of the Domestic Curtains (by type and category, wholesale basis)

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

		Fiscal 1995	Fiscal 1996	Fiscal 1997	Fiscal 1998
Total		1,700 (102.6)	1,877 (110.4)	1,724 (91.8)	1,496 (86.8)
	Ready-made products	404 (104.1)	425 (105.1)	378 (88.9)	290 (76.7)
	Order-made products	1,296 (102.1)	1,452 (112.0)	1,346 (92.6)	1,206 (89.6)
Yarn-dyed products		909 (99.9)	1,023 (112.5)	932 (91.1)	816 (87.6)
	Ready-made products	209 (107.7)	225 (107.6)	200 (88.8)	147 (73.5)
	Order-made products	700 (97.8)	798 (114.0)	732 (91.7)	669 (91.4)
Cloth-dyed products		398 (108.2)	440 (110.5)	418 (95.0)	325 (77.8)
	Ready-made products	101 (98.1)	101 (100.0)	91 (90.0)	65 (71.4)
	Order-made products	297 (112.1)	339 (114.1)	327 (96.4)	260 (79.5)
Lace casement		393 (103.7)	414 (105.3)	374 (90.3)	355 (94.9)
	Ready-made products	94 (103.3)	99 (105.3)	87 (87.8)	78 (89.7)
	Order-made products	299 (103.8)	315 (105.3)	287 (91.1)	277 (96.5)

Curtain Production by Product Category (Source: Japan Chemical Fibers Association)

(Unit: 1,000m2; figures in parentheses are percentages of previous yea’s figures)

		Fiscal 1995	Fiscal 1996	Fiscal 1997	Fiscal 1998
Total		177,455 (103.4)	194,356 (109.5)	200,895 (103.4)	181,660 (90.4)
	Yarn-dyed products	75,268 (97.2)	83,138 (110.5)	85,278 (102.6)	84,499 (99.1)
	Cloth-dyed products	38,932 (110.9)	44,878 (115.3)	48,032 (107.0)	35,651 (74.2)
	Lace casement	63,255 (107.0)	66,340 (104.9)	67,585 (101.9)	61,510 (91.0)

The market size for blinds in fiscal 1998 came to 32.90 billion yen (a year-on-year decrease of 12.9%) for Venetian blinds (horizontal type) and 6.6 billion yen (18.0% decrease) for vertical blinds, producing a total size of 39.51 billion yen (13.8% decrease). (See Table 3.)

The substantial decline of the overall blind market for fiscal 1998 compared to the previous year reflects weak consumer spending, arising from the economic recession and an uncertain outlook, as well as sluggish growth in demand in the mainstay office market and a considerable contraction of the housing market, showing steep falls in both products for home and contract applications.

The downsizing of the market was also fueled by a shift from blinds to fabrics and a drop in unit prices (with lower priced products grabbing a greater share of the market).

Statistical data used in determining market size

Table 3. Market Size of Blinds (wholesale basis)

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

		Fiscal 1995	Fiscal 1996	Fiscal 1997	Fiscal 1998
Blinds total		487.1 (95.9)	472.7 (97.0)	458.2 (97.0)	395.1 (86.2)
	Venetian blinds	403.2 (95.6)	391.3 (97.0)	377.7 (96.5)	329.0 (87.1)
	Vertical blinds	83.9 (97.2)	81.4 (97.0)	80.5 (98.9)	66.0 (82.0)

　[Screens]

The market size for screens in fiscal year 1997 amounted to 22.78 billion yen (a year-on-year increase of 9.7%) for roll screens, 6.05 billion yen (5.1% decrease) for Roman shades and 1.46 billion yen (13.1 decrease) for pleated screens, resulting in a total of 30.29 billion yen (7.9% decrease). (See Table 4.)

The severe environment ensured that the screen market in fiscal 1998 declined from the previous fiscal year, albeit at a lower rate of decrease than that of blinds. A considerable drop in roll screens resulted from the dramatic decline in the number of new homes, which more than offset growth in demand for renovations and replacement and sales at mass merchandisers and home centers. Although roll screens have been becoming steadily more popular as a window treatment element, these products had no impact owing to the sluggishness of the office market.

Roman shades performed comparatively better than other elements, with an extended range of choice for consumers, aided by a trend which makes greater use of fabrics and the fact that products are available in such a wide range of designs (greater availability of fabrics and styles).

Pleated screens achieved steady growth as a new element, and the small size of the market helped it to escape the effects of the severe environment.

Statistical data used in determining market size

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

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

		Fiscal 1995	Fiscal 1996	Fiscal 1997	Fiscal 1998
Total		292.1 (108.6)	315.6 (108.0)	328.9 (104.2)	302.9 (92.1)
	Roll screens	230.1 (102.6)	243.8 (106.0)	252.2 (103.5)	227.8 (90.3)
	Roman screens	51.4 (150.7)	60.7 (118.1)	63.8 (105.1)	60.5 (94.9)
	Pleated screens	10.6 (101.0)	11.1 (104.7)	12.9 (116.2)	14.6 (113.1)

The curtain rail market size in fiscal 1998 was determined to be 33.81 billion yen (a year-on-year decrease of 13.3%) for curtain rails, 2.43 billion yen (22.6% decrease) for related products and 1.11 billion yen (6.2% increase) for others, or a total of 37.35 billion yen (13.5% decrease). (See Table 5.)

In fiscal 1998, the overall volume of sales in the curtain rail market was down from the previous year (1.18 million houses/flats for the year, a year-on-year decrease of 12.1%), owning to a considerable drop in the number of housing starts, itself caused by weaker consumption owing to the recession and the uncertain outlook. The contraction in the market for decorative curtain rails, which has been a major support in this segment, was more severe than that for the overall market, significantly impacted by falling unit prices (with lower-priced products taking a greater share of the market) and price declines resulting from greater competition. As a result, the market fell at a greater rate than that of the market for functional curtain rails.

Similarly, the downsizing of the market size of related products was fueled by the downward pressure on unit prices of products sold at mass merchandisers and home centers, the result of competition from cheaper imported products.

Statistical data used in determining market size

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

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

			Fiscal 1995	Fiscal 1996	Fiscal 1997	Fiscal 1998
Curtain rail total			417.7 (103.6)	453.9 (108.7)	431.8 (95.1)	373.5 (86.5)
	Curtain rails		376.5 (103.8)	409.8 (108.8)	390.0 (95.2)	338.1 (86.7)
		Functional rails	273.2 (101.3)	287.0 (105.1)	267.3 (93.1)	236.0 (88.3)
		Decorative rails	103.3 (111.1)	122.8 (118.9)	122.7 (99.9)	102.2 (83.2)
	Related parts		34.2 (101.5)	36.7 (107.3)	31.4 (85.6)	24.3 (77.4)
	Others		7.0 (106.1)	7.4 (105.7)	10.4 (140.5)	11.1 (106.2)

　

Floor Covering Products

[Carpeting]

The market size for carpets in fiscal 1998 was determined to be 25.74 billion yen (a year-on-year decrease of 12.0%). A breakdown of this figure shows the market for domestic products amounted to 150.7 billion yen (8.6% decrease) and that for imported products 106.7 billion yen (16.4% decrease). The decline was especially obvious in imported products while the overall market for carpets was weak. Selling prices were very low despite the quantity of sales, with the result that unit prices in distribution seemed to cause the industry difficulties. In determining market size, the Association used wholesale unit prices derived by taking into account the situation at each NIF member company based on the "Report on the Shipment of Interior Fabrics, etc.," compiled by the Ministry of International Trade and Industry and a fact-finding survey of NIF members, as well as figures from other statistical data.

In fiscal 1998, the mainstay product of the carpet market, tufted carpets, significantly reversed several years of favorably growth, a consequence of the weaker economy. The fall for residential contract applications outpaced that for automobiles, and could not be offset by demand for carpet pieces.

The wholesale market for tufted tiles contracted from the previous fiscal year, although demand for renovations outperformed that for new construction.

Offsetting considerable growth in the production of light cars, the decline in the output of sedans meant that sales of needle punch carpets for automobiles fell short of the results of last fiscal year.

Continuing their annual fluctuations, sales of imported products fell significantly fiscal 1998, the result of a weaker yen before the demand period and economic uncertainties.

Statistical data used in determining market size

1) Average unit price: NIF fact-finding survey

2) Domestic products: Japan Chemical Fibers 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 of Japanese Trade

Table 6. Market Size of Carpets (wholesale basis)

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

		Fiscal 1995	Fiscal 1996	Fiscal 1997	Fiscal 1998
Total		2,935 (96.3)	3,003 (102.3)	2,925 (97.4)	2,574 (88.0)
	Domestic Products	1,552 (97.4)	1,578 (101.7)	1,648 (104.4)	1,507 (91.4)
	Imported Products	1,383 (95.0)	1,425 (103.0)	1,277 (89.6)	1,067 (83.6)

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

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

Category			Fiscal 1995	Fiscal 1996	Fiscal 1997	Fiscal 1998
Total			1,552 (97.4)	1,578 (101.2)	1,648 (104.4)	1,507 (91.4)
	Tufted		940 (100.3)	935 (99.5)	1,023 (109.4)	912 (89.1)
		Regular use	835 (103.0)	834 (99.9)	912 (109.4)	811 (88.9)
		Automotive use	105 (83.3)	101 (96.2)	111 (109.9)	101 (91.0)
	Tufted tile		314 (87.0)	318 (101.3)	331 (104.1)	319 (96.4)
	Woven carpet		77 (92.8)	83 (107.8)	69 (83.1)	62 (89.9)
	Plain weave		7 (233.3)	7 (100.0)	6 (85.7)	6 (100.0)
	Hooked rug		51 (83.6)	65 (127.5)	56 (86.2)	54 (96.4)
	Needle punch		151 (107.1)	161 (106.6)	156 (96.9)	150 (96.1)
		Regular use	74 (92.5)	77 (104.1)	63 (81.8)	61 (96.8)
		Automotive use	77 (126.2)	84 (109.1)	93 (110.7)	89 (95.7)
	Others		12 (171.4)	9 (75.0)	7 (77.8)	4 (57.1)

The market size of plastic floor covering materials in fiscal 1998 was determined for composition tiles, regular vinyl floor sheets and cushioned flooring. Homogeneous tiles, PVC sheets and soft composition vinyl flooring tiles are not included in the figure.

Composition tiles consist of semi-hard types with high durability, which have long been in use. The composition tile market had been in decline for some time owing to the diversification of flooring materials and decrease in the number of building construction starts, although there was stable demand for these tiles as inexpensive PVC tiles for general-purpose applications in offices and schools. However, the quantity of shipments in fiscal 1998 remained virtually on a par with that of the previous year and unit prices showed no fluctuations. Consequently, the market size was 6.2 billion yen, holding steady from the previous fiscal year.

The regular vinyl flooring sheet lacks a foam layer and is called a double PVC sheet. It is used as a highly-durable basic sheet flooring material in schools, hospitals, factories and offices. The market size for fiscal 1998 continued to decline, falling to 10.3 billion yen (a year-on-year decrease of 6.4%). This is partly the result of a severe decrease in the floor area of construction of factories and workshops, the result of less investment in private sector facilities, the reduction of office-related construction, and the greater use of more decorative composition PVC sheets in schools, hospitals, and welfare facilities.

The cushioned floor is a highly-decorative flooring sheet with a foam layer. The product comes in two types; one for housing and the other for commercial premises. Demand for cushioned floors for commercial premises are in decline, and the 2.3 mm products that were originally developed for commercial premises are now finding greater application for residential properties, such as housing estates. Each house or apartment uses only a small quantity of cushioned floors, since they are mainly used in wet areas such as kitchens, the floor around the washstand, and toilets. The market size for fiscal 1998 was determined to be 23.6 billion yen (a year-on-year decrease of 8.2%), falling with the decline in housing starts.

The market size for the three kinds of plastic floor covering materials was therefore determined to be 40.1 billion yen (a year-on-year decrease of 6.5%).

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)

Category		Fiscal 1995	Fiscal 1996	Fiscal 1997	Fiscal 1998
Total		446 (95.7)	441 (98.9)	429 (97.3)	401 (93.5)
	Composition tiles	76 (96.2)	69 (90.8)	62 (89.9)	62 (100.0)
	Regular vinyl sheets	115 (96.6)	115 (100.0)	110 (95.7)	103 (93.6)
	Cushioned flooring	255 (95.1)	257 (100.8)	257 (100.0)	236 (91.8)

　

Wall Covering Products

[Wallpapers]

The wallpaper market size in fiscal 1998 contracted 21.3% from the previous fiscal year to 156.74 billion yen. A breakdown by category reveals significant declines, with a market size of 7.17 billion yen for paper wallpaper (a year-on-year decrease of 0.7%), 5.61 billion yen for cloth wallpaper (down 22.4%), 130.43 billion yen for vinyl wallpaper (decrease of 22.1%), 350 million yen for chemical fiber wallpaper (decrease of 30.0%), 9.95 billion yen for inorganic wallpaper (decrease of 24.4%), 3.18 billion yen for special wallpaper (down 8.4%) and 50 million yen for other wallpaper (increase of 150%). Demand for imported products also experienced a dramatic fall, to 1.68 billion yen (decrease of 32.8%).

The total volume of shipments of domestic wallpapers continued to fall on a year-on-year basis, dipping 11.1% to 697.51 million square meters. Seen by product category, growth could be observed in paper wallpapers (a year-on-year increase of 15.4%) and special wallpapers (increase of 4.4%).

The key factors for the dramatic decline in the market in fiscal 1998 include the substantial decline in the number of housing starts (1.18 million houses/flats; a year-on-year decrease of 12.1%), a fall in public and private construction, and less demand for house renovation such as wallpaper replacement owing to the economic uncertainty. These factors appeared while the Japanese economy was in a deflationary spiral, creating an overall severe market environment.

The fact that the reduction in value terms is large in comparison with the fall in volume terms is evidence of a further decline in sales prices, revealing severe market competition and a rise in the percentage of mass-produced wallpapers.

Judged by shipment volumes, growth can be seen in demand for paper-made wallpaper including non-wooden paper materials, as well as demand for special wallpaper including non-PVC resin products such as acrylic and EVA wallpapers. This suggests that new materials are being accepted in the market in response to such growing environmental concerns as contamination of room air and issues concerning disposal and recycling (which are evident in the specifications of other materials). Large-scale home buildings tend to favor non-PVC products and next year should witness the start of significant growth in the share of the market held by these products.

Vinyl wallpapers continue to account for a high proportion, at 89.2%, of demand for wallpaper. These products still fall into the low-priced group, although environmentally-friendly wallpapers are increasingly in demand. The industry must therefore endeavor to develop attractive products, tackle environmental issues, and build a disposal-collection-recycling system as an urgent challenge, to stop the reduction in market size.

Statistical data used in determining market size

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)

		Fiscal 1995	Fiscal 1996	Fiscal 1997	Fiscal 1998
Total		2,114.9 (100.9)	2,213.1 (104.6)	1,990.9 (90.0)	1,567.4 (78.7)
	Domestic products	2,090.1 (100.3)	2,189.2 (104.7)	1,965.9 (89.8)	1,550.6 (78.9)
	Imported products	24.8 (205.0)	23.9 (96.4)	25.0 (104.6)	16.8 (67.2)

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)

		Fiscal 1995	Fiscal 1996	Fiscal 1997	Fiscal 1998
Total		2,114.6 (100.9)	2,213.1 (104.6)	1,990.9 (90.0)	1,567.4 (78.7)
	Paper wallpaper	67.2 (117.7)	87.7 (130.5)	72.2 (82.3)	71.7 (99.3)
	Cloth wallpaper	89.8 (87.4)	82.2 (91.5)	72.3 (88.0)	56.1 (77.6)
	Vinyl wallpaper	1,782.5 (101.3)	1,864.0 (104.6)	1,674.7 (89.8)	1,304.3 (77.9)
	Chemical fiber wallpaper	7.5 (115.4)	6.5 (86.7)	5.0 (76.9)	3.5 (70.0)
	Inorganic wallpaper	149.7 (90.2)	139.8 (93.4)	131.6 (94.1)	99.5 (75.6)
	Special wallpaper	9.2 (255.6)	32.6 (454.3)	34.7 (106.4)	31.8 (91.6)
	Other wallpaper	9.0 (1500.0)	0.3 (3.3)	0.2 (66.7)	0.5 (250.0)

[Reference Material]

Wallpaper Production and Shipment

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

		Fiscal 1995	Fiscal 1996	Fiscal 1997	Fiscal 1998
Paper wallpaper	Production	12,162 (115.2)	20,002 (164.5)	16,789 (83.9)	18,769 (111.8)
	Shipment	12,015 (114.7)	19,525 (162.5)	16,036 (82.1)	18,504 (115.4)
Cloth wallpaper	Production	8,356 (89.5)	7,499 (89.7)	7,304 (97.4)	5,087 (69.6)
	Shipment	8,640 (89.4)	7,869 (91.1)	7,653 (97.3)	5,526 (72.2)
Vinyl wallpaper	Production	665,787 (105.7)	729,501 (109.6)	707,572 (97.0)	611,789 (86.5)
	Shipment	666,757 (106.3)	733,202 (110.0)	701,990 (95.7)	622,169 (88.6)
Chemical fiber wallpaper	Production	909 (161.5)	587 (64.6)	271 (46.1)	452 (166.8)
	Shipment	924 (165.9)	547 (59.2)	236 (43.1)	440 (186.4)
Inorganic wallpaper	Production	51,143 (94.4)	49,326 (96.4)	48,398 (98.1)	39,774 (82.2)
	Shipment	51,206 (96.5)	49,052 (95.8)	48,651 (99.2)	39,954 (82.1)
Special wallpaper	Production	1,864 (456.9)	8,322 (446.5)	10,810 (129.9)	11,057 (102.3)
	Shipment	1,817 (718.2)	7,644 (420.7)	10,270 (134.4)	10,721 (104.4)
Other wallpaper	Production	3,561 (2803.9)	61 (1.7)	51 (83.4)	203 (398.0)
	Shipment	3,561 (2803.9)	54 (1.5)	51 (94.2)	191 (374.5)
Total	Production	743,782 (105.5)	815,298 (109.6)	791,196 (97.0)	687,131 (86.8)
	Shipment	744,920 (106.2)	817,893 (110.0)	784,888 (96.0)	697,505 (88.9)

Fiscal 1998
Adhesive	Volume	2,749	2,332	3,182	2,917
	Value (including imported products)	1,663,813	1,163,133	1,726,679	1,476,822
Re-damp	PVC volume	1,132	1,291	1,431	1,277
	PVC value	536,878	555,215	636,024	490,396
	Cloth volume	0	0	0	0
	Cloth value	0	0	0	0
	Paper volume	1,674	1,724	864	867
	Paper value	355,033	459,089	139,910	433,081
	Imported volume	0	1	244	1
	Imported value	0	350	150,000	100
Non-glue	Volume	208	252	208	209
	Value	39,054	41,166	34,091	40,865
Total volume		5,763	5,600	5,929	5,271
Total value		2,594,778	2,218,953	2,686,704	2,441,264

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DESIGNED by MT

Nippon Interior Fabrics Association
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TEL+81-(0)3-3433-4521、FAX+81-(0)3-3433-7860