Consumer Co-op's in Japan

Towards Contemporary Co-operative Studies: Perspectives from Japan’s Consumer Co-ops. Edited and Published in 2010, by The Consumer Co-operative Institute of Japan. 15, Rokubancho, Chiyoda-ku, Tokyo, 102-0085 Japan.
ISBN: 978-4-915307-00-3.

A Review by Nick Matthews

The Japanese consumer co-operative sector deserve great credit for establishing the Consumer Co-operative Institute (CCIJ) and then for allowing it such a wide ranging brief to look at the future of consumer co-operation in Japan. In an excellent piece of work the CCIJ has conducted, “comprehensive multidisciplinary studies on consumer life, consumer co-ops and civil society by involving both researchers and practitioners.” Something the UK Society for Co-operative Studies aims at and has been set a benchmark by this study.

The sector is an important actor in the Japanese economy with nearly 40% of Japanese households belonging to a consumer co-op generating a turnover of around Three Trillion Yen (at the time of writing there where 76 Yen to the US$).

The latter half of the nineteen nineties saw the stunning growth of the sector in Japan stagnate the growing realisation that they faced a new set of problems and challenges was the stimulus for the development of Consumer Co-op Studies.

There was also a deep realisation that the changes in Japanese society are not unique - so I am delighted that this work has been published in English – and that a new kind of research was needed “transcending the framework of the existing body of research, to deal not only with the organisation and management of the consumer co-ops, but also the various external conditions influencing them.”

This research covers four main areas, firstly the organisation and management of consumer co-op’s, secondly and perhaps more innovatively, an analysis of “changes in consumers lives in relation to consumer co-ops”, thirdly to understand the role of changes life style and in society generally that are driven by globalisation and the information society and fourthly, and the most far reaching, to “draw up a vision for a new communal society in the 21st century.”

They argue that, “consumer lives will be stabilised and the basis of democratic participation will be secured, when consumers voluntarily set up strong community organisations for the improvement of life and welfare.”

The book tackles these issues in three parts, in the first part Japanese Consumer Co-ops Today and Tomorrow, there are some fascinating insights into Japanese consumer co-operation. Japan was an early adopter of the “Rochdale model” with the first co-op shops opening in Tokyo and Osaka in 1879. In the early day’s three different types of co-ops developed, ones attached to companies for their employees, worker-orientated co-ops associated with the radical labour movement and citizens co-ops organised by the middle classes. However the Second World War almost completely destroyed these societies leading to a fresh start in the 1940’s.

Whilst the leadership came from the pre-war movement the post-war consumer co-op movement was based on necessity as the economy was in a state of near collapse. Co-ops in the form of buying groups mushroomed but as the economy stabilised and began to grow this movement, lacking effective management and organisation, was unsustainable. In the 1950’s growing trade unions took on supporting “workers welfare businesses” to supplement their main role of collective bargaining. Local Trade Councils began to set up co-op shops again this was relatively short lived as they faced stiff competition from the new supermarket formats introduced by existing retailers.

The transformation in the movement came with the development of “Citizen Co-ops” these where partly a reaction against the industrialisation of foodstuffs from Japanese housewives. Indeed this is probably the most distinctive feature of Japanese Consumer Co-ops – the active participation of women members.

The key unit of organisation was the Han group, traditionally they where small groups of women in a neighbourhood who came together to channel their opinions into the co-op. A third of the total co-op members belonged to Han groups although the average group size was only four members. The second key feature was home delivery – something that has gone in, out and back into fashion here in the west.

Akira Kurimoto, points out that “Joint buying is a unique system of home delivery to Han groups, in which members place joint weekly orders to co-op delivery staff who then deliver the food and groceries the following week.” Akira is Director and Chief Researcher of the Consumer Co-op Institute and also Executive Director of the Robert Owen Association.

The big issue for Han customers was primarily food safety many Japanese consumers where concerned about food safety and demanded produce free of additives, pesticides and any form of adulteration. This particularly appealed to those living in the new suburbs which often lacked the range of shops consumers wanted.

Members demands where quickly communicated and acted on by managers thereby strengthening customer loyal. By law all customers had to be members so a strong pattern of member involvement from the Han groups to district committees, consumer panels’ up to annual meetings and boards developed.

Also being restricted in their trading areas and restrictions on advertising to the general public forced them to be very close to their members and the communities they served. By the way it is clear from this book that the Japanese know a great deal more about European consumer co-op’s than we do about Japanese ones and seeing ourselves through Japanese eyes is not always flattering.

As a Director of a UK retail co-operative society I was particularly interested in Akira Kurimoto’s chapter on Consumer Co-ops Retail business operations. Like everywhere the retail co-ops are facing intense competition and there has been a downturn in the amount members have been buying from stores driving a consequent downturn in floor space and this trend seems set to continue. However to compensate they have established a dominant position in home delivery indeed individual home delivery seems to be replacing the Han groups.

It is only in the last decade that more intensive forms of federal buying and product development functions have developed and it is hoped this will improve the sectors competitiveness improving quality, product safety and prices.

Considering the debates we have in the UK in developing a consistent national co-operative brand another fascinating chapter is by Deborah Steinhoff who whilst based in the US received her PhD in Agricultural Economics from Hokkaido University and worked for many years for Coop Sapporo and who writes about the development of COOP brand merchandise.

The cornerstone of the COOP brand in Japan was and is the Japanese consumers’ anxiety about food safety and the ‘credibility’ of agricultural products after WWII.
Historically that anxiety was expressed through the Han groups – today the movement is harnessing internet technology to engage members in product development.

The way this anxiety was addressed is through a system known as Sanchoku. This is a sophisticated provenance system providing fresh foodstuffs directly from the producers based on three principles, traceability, standardisation and a direct line of communication between consumers and producers. As the distance between producers and consumers with the growth of more complex larger scale buying arrangements this system has come under some strain.

Despite this consumers still join primarily to buy COOP brand products. Indeed in surveys members say that they value security, safety and transparency as the key issues. These are followed by the fact that members support the concern the movement expresses for the less fortunate in society perhaps surprisingly price was of lesser importance.

The growth of co-op’s has gone along with educating members about food, as issues around food production, health, nutrition, and the environment have also gone into the development of the brand.

The second part of the book looks at the way consumer co-operation has diversified into two other areas, into what are called University Co-ops and Medical Co-ops. There are lessons again to be learned from how Japan has diversified into these areas for us in Europe. The University Co-ops are established on University campuses to supply, cafeterias, bookstores and other services to staff and students. There is perhaps more we can learn from the medial co-ops as the Japanese health care sector has some similarities to our own and the co-op sector offers a particular service.

They seek to challenge the ‘problems associated with asymmetric information’ and as such they are empowering consumers of heath care through “learning and participation and taking on the challenge to create networks for heath promotion and medical and social care in communities.”

The last part of the book looks at consumer co-operation in the wider Japanese economy and society, including the changing institutional framework of co-ops, their role in the Japanese food system, their role in civil society and the way they could play a role in ‘reconstructing the livelihood security system’.

This latter chapter by Professor Mari Osawa, of the Institute of Social Science of the Univesity of Tokyo, looks at unpicking the welfare state to look at welfare government and governance and how co-operative forms could drive participation in community management. These are particularly challenging ideas that deserve a much wider sounding than is possible in this review.

Overall this is a terrific publication which both articulates the issues and challenges facing the Japanese consumer co-operative movement and also offers some powerful insights that co-operators everywhere could learn from.