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Toilet-maker Toto looks to Chinese to change cultural habits to boost sales

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Bloomberg

Nearly all Japanese have converted to using seated toilets since 1977 when they first overtook the squatting versions. For future growth, Japan’s largest toilet—maker Toto Ltd. is looking toward neighboring China.

“Just like Japan when I was growing up, not many people owned houses and apartments were small,” said President Madoka Kitamura, 58, in an interview at Toto’s main Tokyo showroom. “I believe China will follow the footsteps of developed countries as expansion in the housing market should follow as it exits from an exports-driven economy.”

Toto, which has been making ceramic sitting-style toilets in Japan since 1917, is looking to China as sales in Japan stagnate amid a shrinking population. The Kitakyushu—based company introduced its first “washlet” in 1980 — a toilet which combines a heated seat with an electronically-controlled bidet.

Toto currently derives three-quarters of its sales domestically, where about 70 percent of households already have washlets installed, according to Kitamura. Toto products account for about 60 percent of Japan’s market for sanitary ware such as toilets and faucets, followed by Lixil Group Corp.’s Inax brand with 30 percent, according to Hiroki Kawashima, a construction and housing fixtures analyst at SMBC Nikko Securities Inc.

The company is targeting sales of ¥650 billion ($5.7 billion) for the fiscal year ending March 2018, up about a fifth from the last fiscal year and above an average estimate of ¥605.5 billion from eight analysts compiled by Bloomberg.

There aren’t clear statistics on the prevalence of seated toilets in China, according to Kitamura, who joined Toto in 1981 and rose through the ranks before becoming president in 2014.

There’s also the question of habit. Most people in China “are accustomed to squatting” in toilets and for seated versions to become more widespread requires the country’s bathroom culture to improve, such as by breaking the habit of squatting on toilet seats, said an unsigned column posted on the official Xinhua News Agency’s website last year.

While seated toilets are a common sight in modern apartment buildings, many malls and public toilets throughout the country still use the squatting versions. Homes and restaurants in the countryside often rely on a simple open-air pit toilet.

According to China’s national standards for latrines catering to tourists issued in 2003, those with an equal number of sitting and squatting loos can qualify as five-star “tourism toilets,” among other requirements, while those with sit-squat ratios of four-to-six can have four stars. One-starred facilities should have at least one toilet bowl in both male and female bathrooms.

Still, Kitamura expects unit sales of Toto-brand washlets in China to rise 50 percent this fiscal year ending March 2016 as they gain greater awareness among Chinese traveling to Japan. A record 5 million Chinese tourists visited Japan last year, with heated toilet seats among the most popular duty-free products they take home. Toto washlets retail in Japan at ¥80,000 for some regular versions to ¥170,000 for higher-end ones.

While it has mainly been wealthy families in China that buy Toto’s higher-end washlets, he’s seeing increasing demand from middle-class buyers, Kitamura said. The company plans to increase its sales network throughout the country to provide additional services such as after-sales repairs, he said.

The company has a flagship store in Shanghai and outlets in provinces throughout China, according to its website.

One challenge that Toto faces when promoting its washlets is that most people won’t purchase one until they have tried it, but don’t have much opportunity to do so, according to Kitamura. The company has found creative ways to encourage people outside Japan to use these electronic toilet-bidets, such as having them installed in airplanes.

“I want people to use our products first, you have to experience it to feel it yourself,” said Kitamura.

  • KenjiAd

    I’ve been living in China for four years now. China has many things they should be proud of, but toilet isn’t one of them. Many (most?) Chinese toilets, especially public ones, are disgusting actually.

    I’m not sure this TOTO CEO has ever visited any of these public toilet in China. If he did, he would realize that it’s really not the issue of whether it has a seat or not. It really is about people’s manner of using public facilities in China, which isn’t very good to say the least.

    So it’s good that TOTO would target wealthy individuals’ homes first. Because if they installed one of those fancy washlets in public places here, it will not last more than a few days. I’m pretty certain some people will destroy it.

    There’s a reason why public toilets still use the traditional squat type here. Because it’s least destructible.