Although Japan is one of the top performing economic countries with the third largest GDP in the world, like all other countries, its economy has been affected by the COVID-19 pandemic.
Japan’s economic growth dropped from 5.3% in the third quarter to 3% in the last quarter of 2020. Household spending also declined 1.4% compared with the same period in 2019, especially spending in the service sector, such as restaurants and hotels.
While the global economy is currently recovering and the overall pandemic situation in several countries around the world is slowly improving, Japan’s economy remains vulnerable due to the population’s changing consumption behaviour, says Theeraphon Kowphatthanakit, Consul (Commercial) and Director of Thai Trade Center – Osaka, Japan.
“An emergency decree announced by the government has resulted in people spending less time outside of their homes,” he says. “On the other hand, shopping via online channels has increased considerably, but demand for work clothes such as suits has decreased because more and more workplaces have ordered their employees to work from home.”
According to him, people have more free time and show more interest in conducting more activities at home such as video streaming, home entertainment and home decoration, which has resulted in increased sales of furniture and other decorative items.
Imports of various products from Thailand such as automobiles, processed chicken, machinery, computer and electronic equipment, chemicals, electronic components, machinery parts and food products continued to grow in the first quarter of 2021. Sales of health and environment-friendly lifestyle products, especially those aimed at the elderly were also robust.
Kowphatthanakit is confident that Thai exports to Japan in 2021 will continue to recover across most sectors.
“Last year, Thai exports to Japan shrank by 6.72%, but this year they are expected to grow up to 3.4%,” he says.
DITP’s office in Osaka has continued to support Thai businesses through a series of trade promotion activities most of which have been moved to a virtual online platform. These have included trade shows and business matching events, as well as new projects to promote Thai products and services, such as digital content, products for the elderly and environment-friendly products.
“These activities are not only aimed at promoting Thai exports but also showcase the high potential of Thai goods in Japan,” says Kowphatthanakit.
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Words by Ayer Chengtrakun