Weakening yen drives rising demand for Japanese diapers

The online retailer Shinsegae Mall made direct purchases of 10,000 packages of diapers from Japan in mid-February, becoming Korea`s first online seller to earn profits from sales commissions paid by stores to make direct purchases and indicating surging demand for Japanese diapers.

Japanese diapers saw sales plunge in the wake of the 2011 earthquake in Japan due to worry by mothers over radioactivity. Such sales in Japan surged immediately after the earthquake then continued to decline, falling in June last year to 22 percent of the levels before from the quake.

The situation has been reversed this year, however. The effect of price cuts has grown visible due to the weakening yen. The Korean won fell to 1,154.5 per 100 yen as of Thursday after peaking at 1,514.8 June 4 last year. Diaper prices of the brand Goon dropped 5.7 percent to 65,900 won (59.03 U.S. dollars) Thursday from 69,900 won (63.14 dollars) at the end of last year, while those of Merries diapers were cut 6.3 percent to 66,500 won (60.07 dollars) from 71,000 won (64.14 dollars). Sales of these diapers recovered to 98.2 percent of pre-earthquake levels.

Baby bottles, wet tissues and car seats are also benefiting from the waning yen. The price of Pigeon`s baby bottles fell 22 percent Thursday from 26,300 won (23.76 dollars) at the end of last year, while African car seats dropped by 43 percent to 239,000 (215.90 dollars) from 136,230 won (123.06 dollars). Sales of baby bottles are up 14 percent from pre-earthquake levels, and those of baby detergent are 23 percent higher. Japanese watches have also seen sales increase due to falling prices.

In Korea, domestic prices of cars, electronics and cameras have fallen little despite the weakening won. A source from a Japanese carmaker said, "Cars and electronics products are imported based on a preset foreign exchange rate, making it difficult to immediately reflect currency changes," adding, "Prices will fall if the yen`s weakening is prolonged."

Korean retailers are preparing for sales of products whose prices have fallen. Shinsegae Mall will begin sales on Japanese baby products and cosmetics, following its sales promotions last year. G-Market is holding a "Japan Only" event, selling daily necessities and baby products directly imported at a 30-percent discount.

Large discount stores and importers that could not directly reflect the weakening yen due to inventory reduction matters are also preparing for price cuts. A retail source said, "Many consumers are now putting more importance on price than nuclear dangers and boycotts due to the economic downturn," adding, "The yen will stay weak for a while, and more price cuts will follow."

teller@donga.com