For Kiwi businesses looking to expand their operations into international markets, there’s never been a better time to head for Japan. Annette Azuma explains why.
Several premier international sporting events will bring millions of tourists to Japan in the next three years and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has been ratified by both Japan and New Zealand. With the Japanese market more globally-focused than ever before, the climate is perfect for those can adapt to Japanese culture and tastes.
This month, Staples Rodway is co-hosting the Start Acting: Japan seminar with New Zealand Trade and Enterprise (NZTE), the Japan External Trade Organisation (JETRO) and Auckland Tourism, Events and Economic Development (ATEED). The event is the third in a highly popular series of Japan-focused business seminars, aimed at helping Kiwi businesses capitalise on the interest generated in New Zealand and build a long-term strategy for success in Japan.
Fashion designer Karen Walker, keynote speaker at the Start Acting: Japan seminar, first entered the market in Japan two decades ago. This year she reached the pinnacle of any retailer’s aspirations, opening a store in Tokyo’s Ginza 6, the newest and most exclusive shopping destination in the country, and arguably the world. Her willingness to explore a new market, combined with a premium product that she has adapted specifically for Japanese tastes, are a blueprint for other Kiwis to follow.
Statistics New Zealand reported two-way trade with Japan totalling $4.1 billion last year and that’s set to rise. Already the world’s third largest economy, Japan’s population of 120 million is expected to welcome 40 million tourists annually by 2020, as Japan hosts the Rugby World Cup in 2019, the Tokyo Olympics in 2020 and World Masters Games in 2021. New Zealand’s sporting prowess lends itself as a marketing tool.
The timing couldn’t be better given that the CPTPP has now been ratified by Japan, New Zealand, and soon Australia. According to Craig Pettigrew, NZTE Trade Commissioner for Japan, what’s really exciting about the CPTPP for our exporters is that it gives them preferential access into Japan for the first time. The reduction, or in some cases complete elimination, of tariffs in Japan will benefit exporters across every imaginable sector, including beef and lamb, dairy, wine, seafood, forestry and horticulture.
Japan’s leaders have also indicated greater global business interests. Japan’s largest bank, MUFG, has just purchased Commonwealth Bank of Australia’s global asset management arm. In September, Shinjiro Koizumi, who is predicted to follow in father Junichiro Koizumi’s footsteps as Prime Minister, visited New Zealand with other Japanese politicians to meet business delegates and showed great enthusiasm for Kiwi ingenuity and the America’s Cup.
Understanding both local tastes and culture are essential for any Kiwi business looking to expand into Japan. This has been evident throughout the series. At Start Thinking: Japan, the first in the series, New Zealand Story presented the 2017 study “Through the Japan Looking Glass”, which showed that a Made for Japan approach is far more successful than our traditional Made in New Zealand marketing. NZ Hothouse Tomatoes discovered that adapting produce to suit Japanese palates by producing a sweeter, smaller tomato was necessary to generate demand. Businesses cannot assume the same products currently sold in China will also be suitable for Japan without customisation. Asia is not a single country with a standard set of characteristics, and the complexities of the Japanese market make it worth investing in targeted research. The trade-off is that with such educated, sophisticated consumers, if you can succeed in Japan, you can succeed anywhere.
A best practice approach to business is critical, with special emphasis on politeness. That means responding promptly to enquiries, being prepared to answer many detailed questions and building a relationship slowly. Even well-known listed companies have failed to capture the Japanese market because they did not invest in the right people to handle enquiries, with the right level of emotional intelligence and adaptability to Japanese values. It’s also crucial that your business is capable of meeting demand promptly.
With such unprecedented scope for success in Japan, Kiwi enterprises are well advised to get in ahead of the rush. Get in touch with a local expert or trade agency and find out how your business can make the most of opportunities in Japan.
Annette Azuma (pictured) is a director at Staples Rodway.