Tips for Finding a Distributor in Japan

Presentation Outline

• Orissa International Profile

• Why Sell to Japan

• Preparing to Export to Japan

• Addressing the Market Challenges To Finding A Distributor in Japan

- Distribution Channels

- Business Culture

• How do you find a distributor?

• Final Comments

About Orissa International

Orissa International Helps Companies Penetrate New Export Markets

Our clients engage us to:

Identify and prequalify potential agents, distributors or direct customers and arrange business matching meetings for them

Develop an export strategy including which markets to target

Provide them with marketing support to help them develop new markets

Why Orissa International

• Our experience – Over 15 years experience helping companies from around the world with their market entry

• Our track record – Assisted over 1000 companies, big and small, from diverse industries e.g. medical, environmental, mining, consumer goods, food and beverage, chemicals, ICT and construction etc.

• Our Global Network – Orissa or partner offices covering 40 markets around the world

Our Global Network

• Belgium • Bulgaria • Czech Republic • Estonia • France • Germany

• Hungary • Latvia • Lithuania • Netherlands • Poland • Romania

• Slovakia • Slovenia • Spain • Turkey • Ukraine • United Kingdom • Canada

• United States

• Argentina • Brazil • Chile • Mexico

• Mauritius • South Africa

• Australia • New Zealand

• China (PRC) • Indonesia • India • Korea (ROK) • Japan • Russia • Singapore • Taiwan • Vietnam

• Israel • Jordan • United Arab

Emirates

Sample Project References

Agent / Distributor Search

Americas: Brazil; US

Europe: Germany; UK; Russia

Africa: South Africa

Asia: Australia; Vietnam; South Korea; Indonesia; Thailand; Malaysia; Philippines

Sectors: Precision Engineering; Printing; Electronics; Power; Mining; Oil and Gas; Food; ICT; Construction; Medical; Construction; Furniture; FMCG; Aerospace; Telecoms; Education; Environmental

Sample Project References

Export Strategy Development

Europe – Oil & Gas; Furniture

Africa – Mining; Oil & Gas

US – ICT; Precision Engineering

Collaboration Projects With IE Singapore

Exporter Development Program – We helped develop the program with IE Singapore and were subsequently appointed as an export coach

Trade missions - US, Australia , South Africa

Our Testimonials

Because of our track record, the following government export agencies refer companies to us for export assistance

Singapore

USA

Europe

Why Sell to Japan

• The non-tariff barriers that makes it challenging for new entrants to enter the Japanese market is also an advantage for those who have already entered the market.

• World’s 3rd largest economy with very significant purchasing power

• Japanese buyers now much more receptive to buying imported goods

• Once a good business relationship has been established between exporter, distribution channels and final buyers, sales happen almost automatically

Preparing to Export to Japan

• Do as much research and planning as possible

• Requires working through partners like agents or distributors

• Personal relationships are very important in this market.

• Doing business requires patience, investment of time and lots of personal visits. Do not expect quick returns.

Japan is a market that requires a strategic approach rather than an opportunistic one

To successfully find and work with agents and distributors, you need to understand the issues to deal with – this allows you to

prepare yourself before you enter the market

Market Challenges – Distribution Channels

• Distribution channels are complex

• Channels retain significant structural inefficiency and redundancy

• Channels vary significantly between industrial and industrial products

A complex and tightly controlled (although improving) distribution system and preferential arrangements among business groups means foreign manufacturers need to be

selective in understanding which importers / distributors they work with

Typical Distribution Channel – Large Manufactures Rule the Market

• Large Japanese manufacturers such as automotive and electronics have corporate alliance structure called “Keiretsu”.

• The large manufacturer controls suppliers in that alliance, and their relationship isn’t an equal partnership.

• It takes so much time for suppliers to start business with the large manufactures out of “Keiretsu”

Large Manufacture

Large Manufacture

First supplier First supplier

Second supplier Second supplier

Difficult to deal

Control

Typical Distribution Channel – Large Retailers Rule the Market

• Japanese large retailers such as department stores and supermarkets have strong purchasing power.

• Department stores usually purchase products after they’ve been sold. It means that they don’t take risk of holding unsold stock.

• Big-box retailers usually expect suppliers to support their in store promotions.

• Distributors usually don't do sales activities for particular products to large national chain store. Their function is specialized in logistics and settlements. Manufactures must do sales activities directly to retailers.

Manufacture

Large retailer

Small retailer

First distributor Second

distributor

Sales activity

Delivery & settlement

Case Study – Machine Tool Market

Manufacturer

Sole importer

Appointed Distributor

Dealer

Sales Rep

End user

Distribution channel is multi-layered and so complex. So it takes a long time to establish it. However, once it is well organized and established, it can be expected that products will be semi-automatically distributed.

Issue 1

Issue 2

Japanese major manufacturing companies take much time to make decisions to use new equipment. These companies do not purchase products directly from manufacturers but from reps who regularly visit these companies. So from first contact to these people, it needs a lot of effort and time to start business.

Market Challenges – Business Culture

• Strict service and quality expectations

• Language

• Japanese don’t like to take risks. Taking risks may endanger their employment

• A procedure of purchasing is usually so long and complex. It sometimes requires several signatures on their proposal.

• If you agree with senior management of your Japanese partner, it doesn’t mean that their subordinates agree.

• For many Japanese, it is more about building a relationship and mutual confidence that will lead to an enduring relationship than it is about getting down to business instantly.

保証の何年を与えるか。

Os nossos produtos são exportados a muitos países

How Do You Find a Distributor?

Most Japanese people never do business at trade shows. They only collect brochures.

Japanese prefer introduction to new suppliers through reliable channels

• Trade Offices

• Chambers

• Consultancy firms that focus on helping foreign companies to find reps in Japan

Final Comments

• Take your time to choose a proper partner.

• Have frequent contacts with distributors and customers and keep pushing.

• Answer all the customer’s questions immediately.

• Don’t miss any defects. Apologize sincerely if you had some defects.

• Be patient.

• There are entry barriers into Japan. It may take a while to generate a profit in Japan. You have to be patient! But when you succeed, you will be protected by those entry barriers.

Contact Us

Contact Us For A No Obligation Discussion As To How We can Help Your Company Succeed In Its Export Efforts!

1003 Bukit Merah Central #05-06 Inno Centre Singapore 159836

Tel: +65 6225 8667 Fax: +65 6271 9791

Email: admin@orissa-international.com Website: www.orissa-international.com