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Characteristics of Japanese Consumer Co-ops.

Japanese consumer co-ops were modeled on their European counterparts in their formative stage, but evolved in a unique way after World War II. The distinct characteristics of "Japanese-style Consumer Co-ops" include active member participation of housewives as the driving force, a unique business model of home delivery through HAN (groups) and to individual members, and a strong social movement dimension ranging from consumerism to pacifism. While the development of consumer co-ops has been largely attributed to socio-economic, political and institutional factors, the eminent leadership has also played a significant role.

Japanese-style consumer co-ops were highly commended as a model of member participation in the 1980's and 1990's.The joint workshop held by the ICA Consumer Committee and Women's Committee in Tokyo in 1986 focused on the Japanese model. The underlining crucial significance of active member participation in Japanese co-operatives was also echoed in President Marcus' keynote speech on the Basic Values of Co-operatives presented at the ICA Congress in 1988. The ensuing ICA Congresses in 1992 and 1995, focusing on Co-operative Values and Principles, referred often to the Japanese model as one of the best practices.

However, Japanese co-ops throughout the course of their development have been impacted by intense competition, Japan's poor economic performance, and the changing lifestyle of the Japanese people accompanied by growing individualism.

Brief History and current situation of Japanese Consumer Co-ops.

Japanese consumer co-ops can trace their history to the late 18th century. The first co-operative shops modeling the Rochdale Pioneer's Society were set up in Tokyo and Osaka in 1879, twelve years after the Meiji Restoration. A number of trials and errors had been made in the course of industrialization that had never been with trouble. At that time three co-ops existed: co-ops attached to companies/factories for employees, worker-oriented co-ops associated with the radical labor movement, and citizen co-ops organized by middle-class people. When the second war ended, these co-ops were mostly destroyed; the left-wing co-ops were liquidated by the militaristic government while the neutral ones were deprived of trading licenses and were in the end air raided. Needless to say, co-ops had to start from the scratch after World War II, although the legacy of the movement was inherited through early co-operative leaders. Today, co-ops are an integral part of communities with 30% of all households in Japan belonging to a co-op.

The history of consumer co-ops in the post-war can be divided into four epochs: the mushrooming of buying clubs seeking scarce food in the 1940's, the emergence of worker-oriented co-ops sponsored by trade unions in the 1950's, the flourishing of consumerism-based citizen's co-ops during the 1960's through 1980's and stagnating growth since the mid 1990's.

Just after the Japanese surrender, the entire economy fell into chaos due to the massive destruction of production and distribution facilities. A rationing system for stable food, introduced as part of the wartime supply mechanism, could not effectively support consumers' daily lives. The majority of the urban population faced a serious shortage of food and other daily necessities as well as rampant inflation. They had to rely on the black market, and bartering their valuables in exchange for food with farmers, or starve to death. Under such circumstances, numerous buying clubs were formed by residents in neighborhoods or by workers in the factories/officers. Their mission was to procure food for members from farms/factories and these clubs were often called 'buying associations'. These mushroomed at an incredible speed; more than 6,500 co-ops were operating in 1947. However most of them lacked an effective management and support system and largely collapsed soon after the rationing system began functioning. The number of co-ops, therefore, swiftly shrank to about 1,000 in 1948, when the Consumer Co-operative Law was enacted. As such, the first boom of consumer co-ops came to a quick end.

In the 1950's trade unionism greatly expanded and took on the role of supporting 'worker's welfare businesses' to supplement its main function of collective bargaining. In this process, worker-oriented co-ops were created under the sponsorship of trade unions to undertake economic activities to meet the various needs of workers. The local trade union councils assisted in setting up 'community-based, worker-led consumer co-ops' in the 1950's. These co-ops operated relatively large stores in comparison with mostly smaller retailers at the time, providing a wide variety of food and consumer goods in local cities prior to the advent of supermarkets.

The rapid economic expansion that began in the late 1950's while drastically enhancing the standard of living brought with it a massive migration of people to large cities. This process was synchronized with revolutionary changes in consumption and distribution in Japan.

Manufactures developed a system of mass production and distribution of processed packaged groceries by utilizing chemicals as food additives, which often caused serious health problems. Consumers were concerned with these chemicals as well as with high inflation, misleading labeling and air/water pollution. Such circumstances gave momentum to consumerism seeking safer food and better environment. 'Citizen co-ops,' backed by housewives in the 1960's were in fact organized in response to the state of affairs at the time.

Through until the 1980's, these co-ops were set up in each prefecture, attracting a wide range of consumers and membership expanded from 2 million in 1970 to 14 million in 1990, while the turnover grew 10 times in the same period.

In 1958, major co-ops established a business federation to pool their buying power at the national level. This organization then merged with the JCCU in 1962 with the aim of strengthening central buying. During the 1980s, 'core' primary co-ops were established through merging smaller societies in many prefectures. In the 1990s, facing still competition, co-ops formed regional consortiums, beyond prefectural borders, which today cover nearly 90% of co-op's overall turnover. Again, co-ops, in an effort to compete, have made efforts towards growing and strengthened buying power through regional consortiums. They have succeeded in maintaining overall turnover in the last decade when declining sales in store retailing have been offset by growing sales in home delivery operations.

History of consumer co-ops after World War II

1948 Consumers' Livelihood Co-operative Society Law enacted. 2007 Revised Co-op Law adopted, and enforced in 2008.
1951 Japanese Consumers' Co-operative Union (JCCU) established. 2008 Japan CO-OP Insurance Consumers' Co-operative Federation became independent from JCCU.
1960 JCCU launched the first Co-op brand product, "Co-op Butter."
1985 Number of co-op members exceeded 10 million. 2010 Japanese Health and Welfare Co-operative Federation became independent from JCCU.
1992 30th ICA General Assembly held in Tokyo. 2011 "2020 Vision of Japanese Co-ops" adopted.
1997 "The Ideal of Japanese Co-operative Movement for the 21st Century adopted. 2012 International Year of Co-operatives launched.

Father of Japanese Co-operative Movement

Toyohiko Kagawa dedicated his whole life to the development of cooperative movements. He always stood on the front-line of social reform movements such as the movements for labors, farmers and universal elections.
He was always a pioneer. Kagawa was born in Kobe, in 1888. Studied in Tokushima junior-high school, Meiji Gaukin University, and Kobe seminary.
Then he continued his education in Princeton University, the USA, and Princeton seminary. In 1920, he established "Kobai Union Kyoeki-sha" in Osaka.
In 1921, he established Kobe Consumer Co-operative and Nada Consumer Co-operative (later they were merged and became Co-op Kobe) in Kobe. He also established many other coops such as Kyoto Consumer Co-operative, Tokyo Student's Consumer Co-operative and Tokyo Iryou (Medical) Consumer Co-operative.
In November 1945, just after the end of the war, he organized the "Japan Co-operative Union Association". In 1951, he founded the "Japanese Consumers' Co-operative Union". Until his death in 1960 at the age of 72, he had served as the chairperson.

A Brief Chronicle of the Modern Japanese Consumer Cooperative Movement

A Brief Chronicle of the Modern Japanese Consumer Cooperative Movement » download [PDF 1.9MB]