SUNS 4353 Thursday 14 January 1999

Tokyo, Jan 13 (IPS/Suvendrini Kakuchi) -- Japan may be going through its worst post-war recession, but tell that to its big-time shoppers, whose appetite for collecting brand-name goods remains as avid as ever.

This may strike many as hard to believe, given the fact that Japan's unemployment rate has exceeded 4 percent, a record high for the world's second largest economy. Japan's economy is expected to shrink by as much as 2 percent in 1999.

"The recession has definitely forced the Japanese to tighten their purse strings, but ironically we are monitoring an upward trend when it comes to brand-good shopping," says Hidehiko Sekizawa, an analyst at Hakuhodo Lifestyle company, a private research institution.

Indeed, this would be good news for foreign critics who have been berating Japan for a dismal consumption record, as its people curb spending given the uncertain economic picture.

The issue of decreasing spending by pessimistic Japanese consumers are a bitter issue -- and not just at home.

In a bid to stimulate spending amid recession and in reaction to international pressure to revive its economy, the Japanese government has proposed various steps, including a tax cut, in order to encourage people to spend instead of stashing their money in savings accounts.

The government has pledged tax cuts and spending packages totally at least $340 billion, and is trying to increase public works spending as well.

In fact, officials have begun distributing cash coupons of 20,000 yen (180 U.S. dollars) to some segments of the population to get them to spend.

But analysts warn that the continuing craving for expensive foreign goods, such as Gucci and Prada, has nothing to do with judging the trends of domestic demand.

"The situation illustrates a unique aspect of Japanese society. There is a section that buys luxury items and these people -- mostly single women -- have always bought these goods simply to satisfy a craving to look good," explained Takashi Uchiyama of Poop Deck, a well-known shop selling used branded goods.

Customers at Poop Deck, which continues to report brisk sales in the trade it has been in for little more than a decade, are mainly working Japanese women from their twenties to early forties.

These women would not bat an eyelid when forking out tens of thousands of yen for a branded product because they put a premium on quality, and equate happiness with looking good, say observers.

Japan's mania for brand names is well-known. It is why upscale shops around the world have set up special sections that include Japanese-speaking assistants, to cater exclusively to their most
important clientele.

Louis Vuitton, for instance, reports that Japanese customers account for one-third of the company's worldwide turnover.

Consumer watchers say surveys indicate that 80 percent of Japanese women own a brand-name product. This despite the fact that their monthly salaries are usually at the level of 240,000 yen (2,160 dollars). For college students, who work part-time to pay for their clothes, the pay is less.

"As it is the custom in Japan, parents spoil their children rotten. They look after the needs of their children right through their college days till they marry or have their own families," explains Sekizawa.

"With more young people marrying later and later it means there are many women who are working and still living at home and therefore have disposable cash," he adds.

But although the Japanese' penchant for branded wares continues to be robust, shoppers have had to find new ways of financing their habit.
The recession has slowed outright purchases of brand goods in department stores -- once the norm during the bubble years of the eighties. Instead, the trade is now booming in pawnshops that seem to have found a niche in catering to Japan's consumerist cravings.

"There are now Japanese women who want to sell their existing set of brand products and buy another more expensive one to keep up with the fashion. The pawnshops, known as 'new wave' pawn shops, offer them a way to do this," says an owner.

The Japanese media recently highlighted this habit through the case of 28-year-old Michiko. Even though her income is barely 1,820 dollars per month, she has just bought a Grace Kelly bag for 3,600 dollars.

She managed to do this by disposing of her Cartier watch, which she bought after selling her Chanel suit. All these transactions were conducted in pawnshops.

Michiko's next target is a Hermes Barkin Bag, retail price 5,400 dollars. She says she "will burst into tears" when she manages to get her dream bag because it is one in a million.

Meantime, pawnshops dabbling in the branded goods business have taken on the look of posh department stores. They have their own magazines and even hold cyber auctions on the Internet.

An owner of a pawnshop quoted in the Japanese media attributes the buying and shopping habits to Japanese women who, he says, are raised in an atmosphere of mass consumption and have little attachment to objects themselves. This is why they continue to purchase and sell the objects as easily as disposing tissue paper, the pawnshop owner theorised.

"In contrast to some countries, where people belonging to upper classes purchases these products, in Japan, which is basically a classless society, young women do not hesitate to buy these (luxury) products just to amuse themselves and be cool," explains Sekizawa.
  
But for the Japanese whose incomes have been cut due to the recession or do not deal with 'new wave' pawnshops, they have turned to buying fake brand-name goods or copies -- to the consternation of manufacturers of big European brands.

Louis Vuitton Japan reports that Japanese shoppers are the world's biggest consumers of counterfeit goods. The Finance Ministry, which seizes fake products coming into Japan, says the problem seems to be getting worse.