If your business has Japan on the radar, Pat O’Riordan, manager for Japan and Korea at Enterprise Ireland, advises on the do’s and don’ts of this exacting but rewarding market.
While the Rugby World Cup has focused all eyes on Japan, successful Irish exporters have long been aware of the scale of the opportunities offered by the Land of the Rising Sun.
A number of factors make the market worthy of Irish attention. Japan is the world’s third-largest economy and remains rich and sophisticated. Its corporates are cash rich and have strong balance sheets, driven by the stellar performance of its export sector. The market is respectful of intellectual property and open to the best of global innovation, making it a good fit for world class Irish companies.
It’s no surprise, then, that companies backed by Enterprise Ireland recorded year-on-year growth of 14.5pc in Japan between 2014 and 2018.
What your business should do in Japan:
- Approach the Japanese market strategically. Thorough market research is essential to ensure there is a product market fit for your offering.
- Have significant export experience already. This is unlikely to be a market to cut your exporting teeth in.
- Go yourself. Japan is not a market you can get to know remotely. Visit, get to know the nuances of its business culture, grow your understanding of the market.
- Dedicate adequate resources. Japan can be an expensive market to reach and winning customers there, particularly your first ones, can take time.
- A Japanese customer will be at least as interested in your company’s heritage and track record as it will be in your product offering to the market. Japanese companies will have the sustainability of the business relationship as a high priority.
- Being asked multiple questions is a compliment. It means the potential customer is investing their valuable time in you.
- Be prepared to excel at customer service. You will likely need to factor this into your overall pricing.
- Dedicate time to winning a good reference customer. If you can point to a satisfied customer in Japan, it will be recognised as a seal of approval right across Asia.
- Observe formalities. Japanese business and organisational hierarchies need to be understood and respected.
- Be ambitious – to generate a return on investment in Japan substantial sales must be generated.
- Be a ‘me too’. Japan is open to and admiring of innovation. It’s willing to pay for it too.
- Expect it to be easy. The barriers to entry are considerable; it’s far from Ireland, expensive, with language and cultural differences and associated buyer behaviour that will be unfamiliar.
- Think that language is the only difference to be addressed. Its business culture is significantly different too and must be appreciated and understood.
- Assume you can succeed from afar. To win in Japan, companies invariably need to supplement regular visits with representation on the ground.
- Underestimate the impact of the recent EU-Japan Economic Partnership Agreement. It provides for a much-improved free trade environment across several categories, not least food.
- Forget to check policy and regulatory changes for new opportunities. Changes in elder care have given rise to increasing demand for assisted living and medtech innovation. Visa changes have fuelled tourism growth. A reorientation of energy policy towards renewables is well underway, creating opportunities for world class companies with innovative solutions.
Irish business wins in Japan: Connolly’s Red Mills
Kilkenny-based Connolly’s Red Mills is a fifth-generation family-owned business, set up in 1908. Its premium horse feed is used by some of the world’s most successful race horses, show jumpers and dressage performers.
The UK was the company’s first export market, in 1985. Today, Connolly’s Red Mills is the largest importer of premium horse feeds in to Japan, with 30pc market share of premium horse food.
“The biggest difficulty is communications. That is not translation, it’s the fact that what is not said in a meeting is what often counts most. But if you don’t know what should have been said, you won’t know what that means,” says Michael Connolly.
Enterprise Ireland’s Japan team provided practical on the ground assistance. “It helped us interpret business culture,” he adds.
If you have the right product, and are prepared to devote time to building relationships, you can succeed. “Your business has to hit all the markers they want to see, which is sustainability, profitability and growth, which thankfully align exactly with our own values at Connolly’s Red Mills,” he says.
Irish business wins in Japan: Kitman Labs
Kitman Labs is the leading performance and health analytics provider to the global sports industry. It was established in 2012 by Stephen Smith, former injury rehabilitation and conditioning coach for Leinster Rugby.
In 2014, it signed its first customer, English Premier League football club Everton. Today, Kitman Labs’ product is translated into 29 languages and sells across five continents.
One of its newest clients is elite Japanese rugby team NTT DoCoMo Red Hurricanes, based in Osaka.
In 2018, Smith travelled to Japan to speak at the Sports Tech Tokyo conference. “We used it as a test bed for the market and began an outreach programme on the back of it,” says Stephen.
Enterprise Ireland’s Japan team helped Kitman Labs to gain a deep understanding of the business culture. “If you don’t understand the nuances, you could burn those opportunities just as quickly as you make them,” he adds.
Written by Pat O’Riordan
Published: 25 September, 2019