Number of words – 819

In 2017 there were 946,060 births and 1,340,433 deaths in Japan, marking a seventh consecutive year of population decline. By some estimates, Japan’s population could shrink by a third over the next 50 years, and there’s little chance the trend will reverse. The roots of the problem reach back to the country’s post-World War II boom years, which produced levels of consumption unprecedented in historically conservative Japan. But that lifestyle burst with Japan’s asset bubble in the early 1990s. The resulting economic insecurity is leading young Japanese people to put off marriage and children—or skip them altogether. What’s left is one of the world’s oldest societies, millions of junk-filled homes, and a dearth of heirs.

The contents of most homes, whether in Japan or elsewhere, contain very little of value beyond the sentiments of the person who purchased them. Kitchen utensils, no matter how many happy meals they were a part of, are typically too beat up to serve anything but the scrap metal industry. Bathroom items—toothbrushes to soap—obviously can’t be reused. Old CDs, DVDs, books, and media players are generally worthless unless in perfect condition or of interest to collectors. Furniture, unless it’s an antique of value, has a diminishing market, especially if it’s made by Ikea.

From 2007 through 2016, more than 100,000 Japanese companies were granted licenses to deal in used goods. People pay Han and other clean-out companies from $2,200 to $3,200 for a one-day job, but the costs can reach into the tens of thousands depending on the size of the job and the length of time it requires. Japan charges high fees for trash disposal, which has contributed to a strong resale market for old goods. In 2016, Japan’s secondhand industry earned $16 billion, up 7.4 percent over 2015 and 30 percent over 2012, amounting to about 4.1 percent of Japan’s overall retail market. Used clothing accounted for 10.5 percent of the retail apparel market in 2016, while secondhand branded luxury items such as Louis Vuitton handbags and Rolex watches made up around 13.5 percent of all retail sales.

The windfall has inspired a burst of innovation in thrift stores and pawnshops, online and off. So-called recycle shops are increasingly common, especially in affluent neighborhoods—EcoRing Co., one of the most successful of these businesses, accepts anything brought to one of its 78 outlets in Japan. Many of Japan’s recycle shops do clean-out jobs on the side as a means of obtaining inventory, and even Buddhist monks are getting into the business. “Families go to the monks and temples after the death for prayers,” explains Rina Hamada, the longtime editor of the Re-Use Business Journal, with the help of a translator. “And then the monks go to the home and clean it out.” Some clean-out companies are working directly with shrines, where they’ll burn certain belongings as an offering to “assuage guilt,” Hamada says.

Over coffee, Hamada offers her version of what’s behind Japan’s burst of secondhand enthusiasm: “Mottainai,” she says, invoking a difficult-to-translate Japanese word that expresses a sense of regret over waste, as well as a desire to conserve. “Before the 1960s, Japanese had this feeling,” she explains. “Even during the Edo period”—a time of economic growth that lasted from 1603 until 1868—“a kimono would be reused for other things.” Hamada thinks the mindset changed over the postwar economic boom, a period during which the birthrate also boomed. “If you want economic growth, you must buy,” she says. “And Japanese forgot who they were and just bought, bought, bought.”

In her view, that ethos has faded over the past two decades as economic stagnation has taken a toll. But that’s not the only factor. Hamada also cites the aftermath of the 2011 earthquake and tsunami as an important turning point in Japan’s relationship with its stuff. “After that, we remember who we are,” she explains. “People start to send their things to Tohoku,” the site of the disaster, “because the people in Tohoku have nothing. People think, ‘Maybe we should reuse things.’?”

Japan’s reputation for quality manufacturing has long been marketable—and that reputation rubs off on goods used in Japan. “Even if something is made in China, if it’s used in Japan, people elsewhere will assume it’s good,” Hamada says. Nowhere is that more the case than in Southeast Asia, where geographic and cultural proximity make Japanese products highly sought after but lower per capita income leaves new goods largely out of reach.

Over the past two decades Japan’s secondhand goods companies have fanned out across the region, opening at least 62 outlets in eight countries. Hip used clothing chain Don Don Down on Wednesday, with 47 outlets in Japan, has an additional 10 in Cambodia. Another retailer, Bookoff Corp., opened three all-Japanese used-goods megastores in the Kuala Lumpur area over the past 20 months.

Excerpted from an article in Bloomberg Business Week on 18-Jul-2018