It's interesting to compare zip with lzh, which was very popular in Japan; they're both from roughly the same era, yet lzh definitely seems far more logically designed (and often outperformed zip in compression ratio too.)
According to http://fileformats.archiveteam.org/wiki/ARJ , ARJ uses something similar to LZH's lh6 algorithm, which is LZ with a 32k window + Huffman, so the difference could be due to ARJ's reduced file format overhead compared to ZIP, or perhaps slightly better Huffman codes.