Terrie's Take: Tradeshow Connecting, Indian Visas, Culling Mascots, and More!

Terrie's Take - AkihabaraNews.com

Terrie’s Take is a selection of Japan-centric news collected and collated by long-time resident and media business professional Terrie Lloyd. AkihabaraNews is pleased to present Terrie’s learned perspective; we all could use another take on the news - here’s Terrie’s:

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Terrie’s Take on July 7, 2014

Feature:

  • Tradeshows: Best Way to Connect in Japan

Briefs:

  • New multi-entry visa for India
  • Denso exec gets jail time for price-fixing
  • Mascots to be culled?
  • Gene related to early flower death identified
  • Puroland loses another JPY240m

Tradeshows: Best Way to Connect in Japan
Through our sister company Japan Inc Holdings (www.jdoor.com) we have been involved in market entry for foreign firms since the 1990's, and one of the most common questions we are asked is how to find partners, resellers and clients. In this age of the Internet, the most obvious answer for end customers is to have a good local online presence and generate enough traffic so that the 0.1% of visitors who convert to a purchase still add up to hundreds or even thousands of transactions.

But finding Japanese partners and resellers is a bit more involved. Oh, yes, you still need to have a website, because without the appearance of online credibility -- and your prospect WILL check your site as soon as you call and ask for a meeting -- you probably won't get to first base. But where the real action comes in is from meeting the other person face-to-face and connecting with them personally. Practically speaking, the most efficient way to reach people face-to-face in Japan is at trade shows. So we tell our clients that for best impact, you should get yourself along to some relevant events, either as an exhibitor or as an "audience member", and start pressing flesh.

Trade shows work in Japan because of the following reasons:
1. Graduated face-to-face meetings create trust in Japan, and trust leads to business. Other than getting a high-level introduction from a friend, the best way to start this process is to get in front of your prospect at a time he/she is receptive to such an approach, meaning at trade shows.
2. Most of the major trade show exhibition locations in Tokyo are within 2 hours travel for a population of 35 million people (lesser numbers and same levels of concentration for Osaka, Nagoya, and Fukuoka) -- that's pretty much a guarantee of large and well-qualified crowds.
3. Because of the Japanese need for familiarity to do business, customers naturally expect to see their suppliers annually at their booth. The suppliers of course know this and so send their best people. This is a huge benefit for you as a foreign visitor, because you have a good chance of cornering some of the top people, all in one place, all in one day.
4. Because your prospective partners/resellers are in "selling mode" themselves, with the steady flow of their customers, you'll find it much easier to reach out and establish a connection than if you tried to cold call them at their office -- and that's IF you could first get past the gatekeeper receptionist.
5. All the noise and competitor logos nearby allow you to stimulate your prospects by casually referring to other exhibitors you just happened to meet earlier. The competitive instinct runs deep in Japan.

The downside of trade shows is that they are tiring, and you need to pick your timing in targeting the key person. No point in being at the end of a long line -- your interaction will be limited to exchanging name cards and that's about it. Instead, if they are busy ask for an appointment at a given time and come back, several times if necessary. That said, sometimes being a foreigner helps get you prioritized, as you could present a country that the prospect doesn't already do business in (even though it is you wanting to do the selling), and this can get you to the top person quickly.

So, with the value of trade shows in mind, we'd like to relate two different shows we visited this week, each the opposite of the other, but both of which highlight how networking gets started in Japan.

The first was a smallish event held at a venue we've never visited before, the Tokyo Ryutsu Center, a large distribution complex down near Haneda Airport that was set up by a spin-off of the Tokyo Chamber of Commerce and Industry back in 1987. We were attending the "Appeal of Food" ("shoku no miryoku") fair, which features innovative food-related SMEs from all over Japan presenting their wares to corporate buyers in Tokyo. There are of course zillions of seller-buyer mini-events like this one in Japan, but we wanted to attend this one because the companies only focus on new products, and since their travel costs are paid for by their local banks they are supposed to be the best of breed in each region. There were about 120 sellers and 1,000 buyers present.

We were the only foreigners there. We were hoping to find products that might be suitable for tourists, but what quickly became obvious is that what we as non-Japanese think of innovation and what the exhibitors had in mind where rather different. While no doubt many of the products were notable refinements, they still looked to us much like existing supermarket staples, and perhaps only a connoisseur would really know the difference. This is one of the big problems that business development agencies face in Japan -- getting companies with limited resources to think more out of the box for export.

But there were a couple of interesting products. For example, a unique nigorizake, a normally white and sweet form of sake that quickly makes you light-headed if you drink it fresh (it is still fermenting), this time without the alcohol...! Drinking the product was a weird experience -- with the liquid tasting something like rice milk but with a thicker and clotted texture. It was pretty good, actually, and we imagine it could be sold as a replacement to milk-based cordials like Calpis.

Another cool product was an add-in for soy sauce. A lady in Ehime (who was there) invented it, and you buy a bottle loaded up with all kinds of dried fungi, garlic, and wakame. The idea is that you then buy a bottle of regular cheap Kikkoman and pour it into the flavoring bottle and let the mixture stand for a few days. Thereafter, the soy comes out with a unique taste which is delicious. According to the inventor, you can refill and reuse a single flavoring bottle for about 3 months. Now that one might sell overseas...

The next day, we attended the second event, the much bigger Tokyo International Book Fair, which was held at Tokyo Big Sight and was organized by Reed Exhibitions. 1,530 exhibitors from 25 countries were participating across four halls, each with a sub-theme that marks a progression away from traditional books and into the digital age. We were there on the industry professionals day, which meant no regular public -- and yet it was still jam-packed. As with any Japanese trade show, there was plenty of noise, demonstrator girls in miniskirts, animatronic dinosaurs, English-teaching book and art book hawkers, DTP software companies, and even a hulking book binding machine that took reams of paper at one end and spat out fully trimmed printed books at the other.

In fact, there was so much eye candy that we had to remind ourselves to focus on finding business opportunities... ;-) Thus we quickly made for the smaller booths at the periphery, where the start-up firms with the interesting new technologies are generally located. Not a lot of mind-blowing stuff this year, although a nationwide ebook player had some interesting software capabilities.

Overall we came away from the TIBF feeling that most of the industry is still stuck on paper -- which is understandable, because fresh paper smells and feels so good. But at least the energy is still there, along with foreign exhibitors, who were back in force after 3 years of staying away. This year it was the Malaysians, with their rich story-telling traditions and lifestyle content who were attracting the most attention. Just another indication of the increasing ties between Japan and the ASEAN nations.

In conclusion, the smaller of the two shows was probably more interesting, in that every exhibitor was 100% ready to talk business, not just salarymen/ladies pushing a brand. On the other hand, there wasn't a foreigner to be seen -- meaning we'd be having to educate each prospect on why they should start thinking export. All-in-all, both shows represented two days of solid market research, name card exchanges, and several business leads. Yup, we have to remember to get out more often.

New multi-entry visa for India
Japan has started issuing multiple entry short-term stay visas to Indian nationals. The new visa is intended to be used by tourists and businesspeople alike, and was agreed upon after PM Abe visited India back in January. Roughly 70,000 Indians visited Japan in 2013, up 25,000 from 2012. ***Ed: Given that the number of Thai tourists jumped about 400% when visas for nationals of that country were relaxed, it appears that we could be looking at several million Indian visitors to Japan over the next year.** (Source: TT commentary from indiatimes.com, Jul 3, 2014)

Denso exec gets jail time for price-fixing
Price-fixing ("dango") is a fact of life in Japan, and helps maintain the status quo of established suppliers in a given industry to repel upstarts and to extract more profit from the customer base. However, as domestic demand shrinks and more businesses are forced to go abroad, they are finding that what's acceptable in Japan is illegal abroad. Such was the case in a recent trial of an executive of a major auto parts company and Toyota Group supplier, Denso. Although Denso is not new to foreign business, their attitude to cartel laws was highly laissez faire. Now 6 Denso executives are paying the price, with one of their number being sent to jail in the USA for a year and a day. Further the company is being fined US$2.3bn, which it has agreed to pay. There are similar investigations of the company going on in the EU, Canada, and now... even Japan. ***Ed: Maybe things are changing? Nah, this is just the cost of getting caught. The company was fined US$78m just 18 months ago for a very similar charge. We guess the proof will be in whether the manager doing jail time (or for that matter any of the others), get fired once they come back to Japan, or instead are just quietly reabsorbed into the work force.** (Source: TT commentary from autonews.com, Jul 4, 2014)

Mascots to be culled?
The Japanese obsession with creating mascots of every location and movement in the country has flooded the nation with sweating junior staff dressed up to look like oranges, hair balls, and balloon-shaped animals. To our eyes, the mascots are preposterously cumbersome and mostly lacking imagination and design sense -- but they never fail to bring out fans wanting to pose and snap photos together. Even an agricultural event we attended several days ago had two ungainly mascots being led around by the hand (in case the actor inside fell over and couldn't get up again). Anyway, apparently the Ministry of Finance is ordering local authorities to stop creating so many mascots ("yuru-kara") because they are a waste of tax-payer money. Apparently some of these mascot suits cost up to JPY1.38m, and up to another JPY90,000 to transport and hire an actor for. (Source: TT commentary from Jul 3, 2014)

Gene related to early flower death identified
Scientists at the National Agriculture and Food Research Organisation in Tsukuba have identified a gene which programs the normal death of Morning Glory ("asagao") flowers. They conducted an experiment whereby they suppressed the gene, now nicknamed Ephemeral1, and were able to slow the aging process by 50%, from the normal 13 hours under ideal conditions to around 24 hours. The scientists are not saying that the gene can be manipulated in all species of flowers, but they are apparently hopeful that the discovery will allow flower producers to provide product with a longer shelf life. ***Ed: What's the bet that this will trigger an avalanche of new research into mammalian life spans?** (Source: TT commentary from channelnewsasisa.com, Jul 4, 2014)

Puroland loses another JPY240m
Hello Kitty creator Sanrio has a theme park based in Tama City, called Puroland. The park had 793,000 visitors last year but still managed to lose about JPY240m. The park has been losing money for years, mostly due to the aging of its robotic attractions, which hadn't been upgraded since the park opened in 1990. A major upgrade was done last year, and this appears to be reversing the decline, although the company is not out of the woods yet. Sanrio says it will extend park hours and start offering discounts. ***Ed: We remember when this park opened. The animatronics were all sourced from a U.S./British company and the head engineer gave us a guided tour of the place -- which btw, is FAR from anywhere. Not to upgrade the electronically-controled characters for 23 years is both a testament to the quality of the foreign firm's products and Sanrio's lack of interest in managing the asset -- probably because they make too much money licencing Hello Kitty characters... All very reminiscent of the attitude other landlords who are from a sector other than real estate, and who think that investment is a one-time occurrence.** (Source: TT commentary from asia.nikkei.com, Jul 3, 2014)

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That was Terrie's Take.

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