Summary
- The IoT movement has inspired a couple Japanese companies to take your toilet to the cloud.
- Early detection and preventive care has become the name of the game in the healthcare industry.
- Japanese toilets will save Americans a lot of money, if Americans would open up to bidets.
Overview
According to the Center for Disease Control and Prevention (CDC), chronic diseases account for 70% of deaths and 86% of health care costs in the United States each year. Naturally, preventive care for chronic diseases has become a focal point in the healthcare industry in recent years. With the launch of the Affordable Care Act (aka “Obamacare”), many health insurance plans are required to fully pay for preventive health services (we’ll see if President Trump changes this). Additionally, companies have been incentivized to keep their employees healthy. This has partially supported the trend in wellness gadgets that we have all grown to love – like the FitBit, Nike FuelBand, Samsung Galaxy Gear Fit, etc. While the rise in popularity of wellness gadgets has helped us develop positive lifestyle changes, the Japanese have started looking into a new form of wellness gadgets – gadgets that seamlessly integrate into our lives… without any lifestyle changes! One such example is the next generation of toilets. But before we get too excited, why are the Japanese so focused on high tech toilets?
The Prevention Mindset And Japanese People
The Japanese are big into prevention: From trains stopping moments before the 2011 Tohoku earthquake to prevent catastrophic derailments to surgical masks being worn everywhere to prevent the flu from spreading – prevention seems to run in Japanese blood. It is easy to point at Japanese culture and say “they are programmed to be preventive”. However, we don’t have to look far to find the societal need for preventive thinking. Roughly 75% of Japan is mountainous and people are abundant. That means livable space is limited and buildings need to reach the clouds. In the meantime, the nation sits on 4 tectonic plates that shake every day. Naturally, the Japanese build tall buildings that don’t fall, develop emergency response systems that stop trains before earthquakes hit, and wear masks to prevent the flu from spreading to their neighbor that lives 10 feet away.
Source: Nippon.com
How do toilets fit into this picture?
Crowded living spaces increase the need for cleanliness and privacy. The bathroom is one of the few places where a Japanese person can find privacy. Combine this with the prevention mindset and toilets with a health check feature becomes a natural extension of Japanese thinking. It is not an exaggeration to say that toilets are a part of the culture. “bidets” which – *cough cough* – spray water to help cleanse sensitive areas are commonly seen in households and public restrooms. Here is a picture of a bidet for your reference:
Source: Amazon.com
To many folks in the US, bidets are unfamiliar territory and the picture above might look like a futuristic toilet. The Japanese reality is that these things are everywhere (81% of Japanese households have one of these). The modern bidets come with an instant water heater, sensors that opens/closes the toilet lid (this might save a marriage or two), and a toilet seat heater for the colder months.
The exploration into features for the next generation of toilets starts with the prevention mindset: What can toilets prevent? TOTO, the largest Japanese bidet manufacturing company, is looking into prevention of chronic diseases. They are currently developing a toilet that will essentially take a stool sample each time you take care of… big business. Similarly, Symax Inc, a Japanese startup, is developing a health sensor (attaches to existing toilet) that checks urine contents. The idea behind both of these developments is basically to report urine and stool samples to the cloud for analysis. If health problems are detected, the gadget tells you to go see your doctor.
86% of Healthcare Costs In The US Are Related To Chronic Diseases
According to CMS, Americans spent $3.2T (Yes, Trillion, with a “T”) on health care in 2015. That is $9,990 per person. 86%, or $2.75T ($8,600 per person) is related to chronic diseases.
That’s a lot of money.
It takes 21 days to develop a habit. It is incredibly easy to chug 3 cans of Mountain Dew Voltage a day and doubly difficult to stop chugging 3 cans of Mountain Dew Voltage a day, once the habit is formed (guilty as charged!). Moreover, physical exams are generally only done once every other year for those under 50 and once a year for those over 50. That means we have plenty of time to develop bad habits without fully understanding the potential consequences before we get our next physical. Next gen toilets can influence that. While the toilet may not catch signs of diabetes within 21 days of chugging 3 mountain dews a day, the benefit lies in early detection. All we have to do is live our lives and the toilet will tell us to go see a doctor at the first sign of danger.
Toilet Companies In Japan
There are 3 companies worth mentioning when it comes to toilets in Japan: TOTO (TYO: 5332), INAX (made by Lixil (TYO: 5938)), and Panasonic (TYO: 6752). I had a difficult time finding market share data, but here’s what it looks like in Japan:
Source: Reform Lab (Japanese Source)
TOTO not only commands a strong lead in market share, but they also have the highest price points (tankless and regular toilets):
(30 is about $3,000)
Source: Reform Lab (Japanese Source)
The Opportunities Are Largely Outside Of Japan (And Mostly In North America)
As mentioned earlier, bidets are common in Japan. However, the rise in bidet popularity did not happen overnight. The bathroom has not always been the Japanese private getaway it is today. In the early 1900s, the bathroom was a “dirty room” that was typically small and hidden in a corner. Mr. Quigley from Tech In Asia provides insightful coverage on the emergence of the Japanese bidet in his article here. To summarize and paraphrase Mr. Quigley’s explanation on the rise in popularity of bidets, the most common form of toilets in the early 1900s was squat toilets and nobody knew what a public sewage system was:
Source: Japan Today
When the Great Kanto Earthquake struck in 1923, Tokyo was wiped out. This served as a good starting point for modernizing and rebuilding Tokyo, which included building a modern public sewage system. The western toilet proved to be more sanitary and easier to install. As the Japanese economy grew after World War II, western toilets became widely accepted.
That explains the spread of western toilets in Japan. The spread of the bidet speaks more to the demand for cleanliness and… economics. Yes, economics. Lloyd Alter explains in his post here how a bidet isn’t only cleaner and greener, but also keeps the wallet healthy because it is cleaner and greener. The short version of the story is that significantly less toilet paper is used when bidets do the cleaning.
Frankly, nobody likes talking about toilet habits. We are accustomed to a certain way of cleaning our sensitive parts and that is that. Whatever the case is, bidet penetration in North America is extremely low – probably somewhere south of 1% of toilets. Some say this is because bidets originated in France, early colonists in N. America were mostly Brits, and Brits had a disdain for French ways.
Investor Takeaway
The path to bidet acceptance in North America is not hurdle-free by any means, particularly from a cultural standpoint. That said, the bidet beats toilet paper in just about every way imaginable – everything from cleanliness to eco-friendliness to cost savings. It is difficult to determine whether the cultural acceptance of bidets will happen in the next 3 years or the next 30 years, but it is bound to happen. Not that Amazon reviews are an indication of a cultural shift, but the reviews seen on Amazon are overwhelmingly positive (difficult to find less than 4 out of 5 star TOTO bidets). In a North American culture that is gradually paying closer attention to health, health checking cloud-connected toilets might be the final push needed for bidets to find a place in North American culture. Investors may want to stay informed about top Japanese bidet companies like TOTO and Lixil as they take toilets into the future.
