Business / Economy

Japanese firms reap rewards from foreign condom frenzy

(Bloomberg) Updated: 2016-01-26 08:15

In Japan, sex drives have plunged so low that young, libido-challenged men are sometimes referred to as "soushokukei-danshi" or herbivore boys.

Think that is harsh, then consider local condom maker Sagami Rubber Industries Co, battling a shrinking, aging and now increasingly frigid Japanese clientele. It is no wonder then that the company is getting some relief from the popularity its prophylactics are enjoying across the sea.

Demand for foreign-brand rubbers has surged in China, and its tourists visiting Japan in record numbers are loading up, so much so that Sagami's thinnest product has sold out. Now the Kanagawa-based company is limiting the volumes it is dispatching from its remaining product inventory to avoid some shops missing out before the Feb 8 Lunar New Year, President Ichiro Ohato said.

"Thanks to this inbound business, we're suddenly facing shortages," said Ohato, 67, whose grandmother founded the business in 1934. "Retailers have been bombarding us with calls every day, telling us they want more and more."

Chinese consumers are attracted to the "high quality" of Japanese condoms, especially following safety concerns about China-made ones, said Masashi Mori, an equities analyst at Credit Suisse Group AG in Tokyo, in a telephone interview.

Shanghai police seized 3 million fake condoms made locally from inferior, foul-smelling materials, the People's Daily reported in April. Two years earlier, Ghanaian authorities said 1 million imported condoms made by a Chinese company burst during sex and contained holes, the Guardian newspaper reported.

"Japan has become a shopping mecca for Chinese tourists due to the desire for 'Made in Japan' goods, the unique shopping experience the country provides for Chinese tourists and in addition the recent duty-free status now granted to tourists," said Jared Conway, research manager for Japan with Euromonitor International.

Mori said he is optimistic about the long-term prospects for Japanese condom makers. "If China really does make the transition from investments to consumer spending, people are going to want to trade up and use better products," he said. "So there's still lots of room for growth."

To ramp up production, Sagami is expanding one of its two factories in Ipoh, Malaysia. It is also planning to build a third factory there to boost output, Ohato said. By spring, he wants to double the volume of extra-thin condoms it produces for the Japanese market to 80 million a year.

These products, made out of 0.02 millimeter-thick polyurethane, sell at retail for twice as much as Sagami's standard latex offering, going for 1,000 yen ($8.5) for a six-pack. It is Chinese demand for these more-expensive condoms that have caused the most frequent shortages, Ohato said. It is also what prompted him to begin distributing them directly in China earlier this month.

China may help Japan-focused Sagami counter a dwindling population and a stagnant domestic economy, not to mention lackluster demand for condoms. While sales of high-end polyurethane condoms have helped buoy profit, demand for Sagami's rubbers peaked in the mid-1980s, Ohato said.

"Things were on the decline from there, and it's been terrible since 2000," he said. "There's no question that Japanese people are using condoms less and less."

He continued, "their sex-drive has waned. It's not like this overseas. It's really bad in Japan."

Lovers in Japan are the least amorous, having sex 45 times a year on average, according to the 2005 Durex Global Sex Survey, which polled more than 317,000 people from 41 countries. Greeks, on the other hand, have sex an average of 138 times a year, compared with 96 in China, the survey found.

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