Toilet Maker Toto Counts on Chinese to Change Cultural Habits

  • Most people in China are more used to squatting toilets
  • Toto sees China washlet unit sales rising 50% this fiscal year

Toto Expands Luxury High-Tech Toilet Empire

Nearly all Japanese have converted to using seated toilets since 1977, when these 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, Japan-based company introduced its first “washlet” in 1980 -- a term that was coined by Toto which describes a toilet that 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 bidet-toilets 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 to lift sales to 650 billion yen ($5.7 billion) for its fiscal year to end-March in 2018, up about a fifth from the last fiscal year and above an average estimate of 605.5 billion yen from eight analysts compiled by Bloomberg. The stock fell as much as 2.1 percent to 3,425 yen in Tokyo trading, while the Topix Index fell as much as 1.5 percent.

There aren’t clear statistics about 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 country-side 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 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 travelling 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 yen for some regular versions to 170,000 yen 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.

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