A Tiny Zipper, A Hot Global Race

The zipper was invented in the United States more than a century ago, but it is now a global product. They are manufactured in many places, can be sewn or pasted almost anywhere, and can definitely be used anywhere. To learn more, let's review the historical overview, some international trade theories to have a basic understanding of the ongoing market battle.

Advantageous Japan

Jingjiang city's zipper industry is well known in China. But now YKK from Japan is turning out to be biggest opponent, for the local as well as for the industry nation wide.

Take five items from the wardrobe as examples and check all the custom zippers on the tabs. There may be at least one marked with the letters YKK. It is produced by a Japanese company, which is currently the world's largest zipper manufacturer with annual revenue of 10 billion U.S. dollars and a 40% share of the global market, which is impressive.

So how does a Japanese company do this? As the British economist David Ricardo explained in 1817, does it have something to do with Japan's comparative advantage, thus facilitating trade between countries? Not really. The land in Chaoyang has never been used exclusively for metal zippers, or more widely used for light manufacturing. Most importantly, the success of YKK zippers does not originate from export. Instead, there is only one company investing overseas to build factories. Now, it has representative offices in 73 different countries and regions through approximately 100 wholly-owned subsidiaries.

A U.S. Invention

If there is any place that enjoys a comparative advantage in customized metal zippers, it is the United States. This is where the device was invented, and after a lot of hard work, it was finally adopted. Robert D. Friedel, professor of the history of technology and science at the University of Maryland, tells the story of the American zipper in a detailed and interesting book. He believes that the metal teeth zipper is an iconic invention that everyone needs. Although laborious, it ultimately prevailed. From 1893 to its first practical use on rubber tape, 25 years have passed. It is indeed a desperately seeking application innovation. Over the years, tailors and clothing manufacturers have used hooks, buttons and ribbons. They are cheap and easy to replace, and come in a variety of colors and uses. But in the end, the demand for speed and fashionable novelty finally prevailed, which made the custom plastic zipper an indispensable accessory.

Blue jeans are a perfect example of this process. Levi's introduced the first model with a customized pants zipper in 1947. The San Francisco-based company is looking for a way to attract East Coast women, who suspect that this button-down camisole is quite eye-catching. Therefore, nylon pants zippers are used as an alternative to fly buttons.

Home Market, Exports, Direct Investment

Here are some lessons from international trade.

First, it used to seek comparative advantage among competing countries, but now it operates among enterprises. Why do some people only serve the domestic market, while others export, and open subsidiaries abroad?

In the mid-1970s, Professor John Dunning of the University of Reading provided preliminary insights at a symposium in Stockholm. He compiled several economic theories and proposed a compromise matrix to analyze the foreign direct investment of multinational companies such as YKK. He focuses on several factors, including the advantages of holding various specific assets. For our champion zipper manufacturer, one of the assets is its machine tool expertise. Unlike its competitors, the Japanese company's expansion is based on the development of its own materials and equipment. From the very beginning, it designed its own tools and provided them with proprietary materials. It only bought its own invented plastic particles and alloy mixtures. YKK and French tire manufacturer Michelin have a similar business method, closely protecting the secrets of its manufacturing process and continuously improving itself. This situation is completely contradictory to the situation where the same supplier provides services to the same customer. In the latter case, customers share the same intermediate consumption and machines, so there is no comparative advantage.