Japan Co-ops Endure Recession, Innovate
Editor's note: Information below is taken from the English-language newsletter of the Japanese Consumers' Co-operative Union (JCCU); their website is located at http://www.coop (click "English"). --D.G.
Years of recession have led to shrinking sales for most of the grocery industry in Japan. Consumer food co-ops, the largest such sector in the world, reflected this pattern but not as markedly; total sales for FY 2000 and 2001 were 98.3 and 99.2 percent of the previous year, respectively. However, tighter management has enabled Japanese consumer co-ops to increase membership number and share capital, and a higher percent of the co-ops showed a profit in the past year.
Recession aside, Japan's amazing co-op numbers continue to make the U.S. look underdeveloped. Membership nationally totals over 21,000,000; members of retail co-ops account for 90 percent of that total. Of the retail members, more than one-third are in Han groups, three or more neighbors who order together. Like U.S. buying clubs only more urban and smaller, Han (joint purchase) groups number over 1,500,000 and have some 7,000,000 members. There also are 2.4 million members of medical co-ops and over 800,000 members of housing and insurance co-ops.
JCCU Member Results for FY 2001 | |||
| Unit | 2001 | 01/00 | |
| (Divide by 125 for approx. dollar equivalent) | |||
| Number of member co-ops | 578 | 98.5 | |
| Retail co-ops | 450 | 98.9 | |
| Medical co-ops | 118 | 99.2 | |
| Housing & insurance co-ops | 10 | 76.9 | |
| Membership | thousand | 21,350 | 101.5 |
| Retail co-ops | thousand | 18,123 | 102.4 |
| Medical co-ops | thousand | 2,389 | 105.7 |
| Housing & insurance co-ops | thousand | 838 | 77.6 |
| Han groups (*1999 figures) | thousand | *1,634 | |
| Han members | thousand | *7,184 | |
| Han members รท total membership | % | *36.7% | |
| Total turnover | billion yen | 3,257 | 99.2 |
| Retail sales | billion yen | 2,905 | 99.1 |
| Service and other sales | billion yen | 352 | 100.4 |
| Total turnover of retail co-ops | billion yen | 2,987 | 99.0 |
| (Purchase/month/member) | yen | 13,896 | 97.8 |
| Retail sales, all retail co-ops | billion yen | 2,905 | 99.2 |
| (Retail outlets sales) | billion yen | 1,317 | 96.5 |
| (Joint buying sales) | billion yen | 1,510 | 102.0 |
| Service and other sales | billion yen | 82 | 92.4 |
| Total turnover, medical co-ops | billion yen | 262 | 102.6 |
| Total turnover: housing, insur. | billion yen | 8.7 | 76.9 |
| Share capital | billion yen | 533 | 104.9 |
| Retail co-ops | billion yen | 480 | 105.0 |
| Medical co-ops | billion yen | 51 | 107.1 |
| Housing & insur. co-ops | billion yen | 3 | 76.9 |
| Share capital/member | yen | 24,986 | 103.4 |
| Retail co-ops | yen | 26,470 | 102.5 |
| Medical co-ops | yen | 21,227 | 101.3 |
| Housing & insur. co-ops | yen | 3,620 | 99.1 |
| Co-op bonds | billion yen | 104 | 96.0 |
| Number of retail outlets | 2,364 | 96.7 | |
| Sales area | square m. | 1,549,883 | 98.8 |
| Number of full-time employees | 54,323 | 98.1 | |
| JCCU wholesale amount | billion yen | 283 | 101.5 |
Total turnover (revenue) by these co-ops was 3,257 billion yen or over 25 billion dollars. There are about 450 retail co-ops with 2,364 outlets.
Mostly located in dense, urban settings, Japanese food co-ops have seen strong growth in the relatively new fields of home delivery services and Internet ordering. Sales through Han groups, the traditional non-store sales outlet, actually are decreasing and are at their lowest in more than ten years. Home deliveries are growing and account for a total of 300 billion yen (over 2 billion dollars) annually. Delivery fees have been reduced over time; in Tokyo the fee is only 180 yen. A minimum of 60 deliveries per day is said to be the break-even point.
Internet operations work for the co-ops because members are able to procure through established home delivery and joint purchasing systems. An Internet platform offered by JCCU to co-op members in 2000 now has 55,000 registered members in 13 co-ops. Kyoto Co-op in its first year of joint purchase orders via the Internet had 350 million yen in sales through the system. Ordering, product information, member comments, co-op news and activities -- all are transmitted to or from home or work or mobile phone.
