Personal View

 

Cultural adaptations: Where patience is a virtue

 

by Andrew Hankinson

 

One of the reasons I love working in Japan is because it’s such a unique place for foreigners to do business. There are numerous cultural obstacles together with a good dose of xenophobia, but when used to one’s benefit, these challenges can actually be leveraged to success in Japan. You must understand local business practice but maintain your own identity and experience to allow a full array of business options.

 

As the second largest office products market in the world, business-wise, Japan appears to be a huge opportunity for anyone – on the surface that is. However, hard experience teaches that the Japanese are extremely conservative about changing sources of supply and marketing new consumer products, especially from foreign manufacturers. Of course, this is frustrating when you are on the outside trying to get in, but wonderful when you are on the inside watching your competitors trying to break into the Japanese market.

 

Even after 12 years of working in Japan, I am still amazed at how excruciatingly long it takes to get a deal done. The drawn-out sales cycle in Japan is definitely the most frustrating aspect of business development. However, the country has taught me patience and understanding. And it has taught me a different way of looking at business.

 

In my opinion, the Japanese are like farmers when they do business, while Westerners are like hunters. We in the West want to go out, kill and eat for instant gratification. The Japanese plant seeds, cultivate and then, when the time comes, they really enjoy the fruits of their labour.

 

What’s interesting about the Japanese office products market is that even though the sheer number of sales indicate large market opportunities, there are no real office products/stationery big box retailers in Japan. No Staples, OfficeMax or Officeworks. Office Depot has a healthy presence, but cannot really be classified as a ‘big box’ and it does a lot of its business through catalogue sales. The closest we have in Japan to a powerhouse retailer would have to be Askul and that’s 100 percent catalogue sales.

 

Of course, there are large retailers such as Tokyu Hands, Loft and Ito-Ya. They carry a large selection of office products, but these companies can best be described as a combination DIY/hardware/hobby/stationery retailer.

 

One channel that’s often overlooked is Japan’s very large, non-traditional distribution channel called zakka or ‘variety stores’. These are best defined as trendy or hip retail shops which carry a unique (many times imported) mix of speciality items. They sell everything from kitchen items, clothes, and craft/toy products, to watches, greeting cards and genre-specific CDs.

 

Included within this zakka channel is a category called ‘design stationery’. This ‘design’ or ‘fancy’ stationery category is also often associated with interior shops, furniture stores, booksellers and even fashion boutiques. All of them have recently started to sell stationery and other ‘cool’ office products.
For any new entrant in Japan, market positioning is really a key factor. In order to be successful as a foreign manufacturer, Esselte Japan needed to become creative and resourceful in its distribution, brand strategy, and positioning.

 

With positioning, luckily for us, there are multiple brands within the Esselte group and we have selected the most suitable products for Japanese consumers from the Esselte, Leitz, Xyron, Pendaflex, Oxford and Spirax brands. This gives us a good mix of quality, design, functionality as well as colours.

 

The Japanese are well-known for their love of high quality and brand name products, thus – together with our inability to competitively compete with established Japanese manufacturers – we have positioned ourselves in the mid- to high-end office products and stationery category. And we have gained some positive results, especially in the design stationery category.

 

While "cheap" means "good" to low-income populations around the world, in those countries where per capita income is reasonably high such as Japan, Germany and South Korea, cheap without some redeeming qualities also means undesirable. Of course, there is a limit to how much even the Japanese will pay for office products and with increasing production costs, maintaining a price-to-value ratio is an ongoing challenge.

 

There are many unspoken yet understood rules in Japanese society and business. The OP market in particular, being very conservative in the country, probably has more of these rules than other product or service industries. Nonetheless, being a Japanese-speaking foreigner in Japan, I feel this benefits more than hinders Esselte Japan’s presence here.

 

The Japanese in general like foreign products and brands. As such, having a foreign face and a foreign brand helps us stand out in the crowd. Furthermore, as a foreigner, a Westerner in particular, we are not expected to fully understand the many "unspoken rules" and will be forgiven if we do not 100 percent abide by them as a local would be expected to.

 

I have been accused more than a couple of times of breaking these rules. This was done quite strategically in order to speed up a process or better position our brand and products in this market.
Following the old adage, it’s sometimes better to ask for forgiveness than permission. This can be especially true in Japan where it takes not only good products and creativity but more so, hard work and patience to succeed.