EURObiZ Japan November 2010

European

design

Masashi Kuriki, Alessi Japan

Alessi, Bang & Olufsen, Riedel, Scandinavian Living, Tempur, Villeroy & Boch

ALSO INSIDE //

Tricks to get clicks

The perfect corporate website

Q&A

Economist Naomi Fink on Japan and China

11

2010

THE MAGAZINE OF THE EUROPEAN BUSINESS COUNCIL IN JAPAN / THE EUROPEAN (EU) CHAMBER OF COMMERCE IN JAPAN

8 Cover photograph Benjamin Parks

FOCUS 10 Euro cool

16 Tricks to get clicks

How European design conquered Rob Goss learns how to set up the Japan. By Alena perfect corporate Eckelmann. website.

CHAMBER SPOTLIGHT 2

November 2010

22 Rebranding Japan needs to burnish its lackluster image reports David McNeill.

26 The Austrian Business Council is one of the youngest chambers of commerce in Tokyo, but continues trading links established in 1869

5028 20 56 COLUMNS 7 From the Editor 20 Q&A Bank of Tokyo-Mitsubishi UFJ Economist Naomi Fink tells Julian Ryall why the Japanese and Chinese economies can only become more interdependent.

25 Executive Notes Dan Slater of the Economist Corporate Network muses on some of the hard lessons learnt by Japan.

34 In Committee

48 Talking EURObiZ

Members of the EBC Asset Management Committee saw their industry badly hit by the recession. But patience pays off in the long run, hears Geoff Botting.

One of the founders of the EBC, Luciano Cohen, works at Japan Europe Trading with his son Thierry.

37 Green Biz

Jeremy Sutton-Hibbert samples the fare at Tokyo’s Mibu – one of the most exclusive restaurants in the world.

French company Arkema offer eco-friendly castor oil-based plastics, Christopher S Thomas reports.

38 Industry Experts

28 Investing in Japan

Market Entry and Consulting

Mattress and pillow company Tempur Japan has had double-digit growth this year, despite the weak economy. By Alena Eckelmann.

45 Event Report

30 Holiday Gift Guide

Doreen Simmons is a leading expert on sumo.

Leadership and orchestra conducting at the Chanel Nexus Hall in Ginza.

46 Culture Shock

50 Lens Flair

52 Special Advertising Section Relocation services in Japan

55 Upcoming Events Europe and Japan business-related events.

56 Work Place Wolfgang J. Angyal is president of Austrian wine glass company, Riedel Japan.

The Mission of the European Business Council To promote an impediment-free environment for European business in Japan.

November 2010

3

Join+ support

Publisher Vickie Paradise Green

European Business Council in Japan (EBC)

paradise@paradigm.co.jp

The European (EU) Chamber of Commerce in Japan

Editor-in-chief Tony McNicol

The EBC is the trade policy arm of the seventeen European national chamber of commerce and business associations in Japan

tonymcnicol@paradigm.co.jp

Senior Editor David Umeda Creative Director Richard Grehan Art Director Paddy O’Connor Designer/Illustrator Akiko Mineshima

Chairman Tommy Kullberg Senior Vice-Chairman Michel Théoval Vice-Chairman Duco Delgorge Treasurer Erik Ullner Executive Director Alison Murray Policy Director Bjorn Kongstad

Advertising Sales Jay Isaac, Helene Jacquet, Sam Laws, Laura Schmelling

EBC members can not only learn about

Production and distribution

important changes taking place in Japan,

Francesca Penazzi

but also play a critical role in influencing change themselves.

Yumi Mitsuyama Herman eurobiz@paradigm.co.jp

Published by Paradigm 4-18-12 Takanawa, Minato-ku, Tokyo, Japan 108-0074 Tel: 03-5447-8831 Fax: 03-5447-8832 www.paradigm.co.jp Published monthly in Tokyo. All rights reserved.

The views and opinions expressed herein (other than editorials by the EBC ) are solely the opinions and views of their authors. The EBC is not responsible or liable for any portions thereof.

Subscription is free for members of the EBC and national European chambers of commerce.

Subscription rates are: one year ¥9,000; two years ¥15,000; three years ¥22,000. ¥800 per copy. Rates include domestic postage or surface postage for overseas subscribers. Add ¥7,500 per year if overseas airmail is preferred. Please allow eight weeks for changes of address to take effect. Subscription requests should be sent to eurobiz@paradigm.co.jp If you prefer not to receive this magazine, and for all matters related to distribution, please send an email to eurobiz@paradigm.co.jp EURObiZ Japan welcomes story ideas from readers and proposals from writers and photographers. Letters to the editor may be edited for length and style.

Contributors David McNeill wonders if Japan can rebuff a tarnished national brand, page 22 David writes for The Independent and Irish Times newspapers, and is Japan/Korea correspondent for The Chronicle of Higher

To join the EBC visit

www.ebc-jp.com For more information please contact the EBC Secretariat.

Alison Murray, EBC Executive Director.

Tel: 03-3263-6222. E-mail: ebc@gol.com

Originally from Dartmoor in the UK, Rob has been living in Tokyo for the past 10 years. He writes on a range of topics, from travel and culture, to business and finance. His current client list includes Time, eFinancialCareers, Continental, Fodor’s, and many other publications around the globe.

“Managing your online presence seems to get more complicated with every new social network and web development that comes along. The biggest challenge is

Jeremy Sutton-Hibbert photographs Japan’s most exclusive restaurant, Mibu, page 50

Jeremy was born in Scotland but is now based in Tokyo. He has worked on photo assignments for such clients as Time, Italy

Education. He also contributes regularly to several other publications, including The Japan Times. He is a coordinator of the online journal www.japanfocus.org and teaches a course on media and politics at Tokyo’s Sophia University.

“Japan’s image once seemed effortlessly cool. But the government increasingly realises that the brand has been tarnished by two decades of political and economic problems.”

Rob Goss writes about creating a successful corporate website, page 16

knowing how best to invest your time and money – and how not to get left behind.”

Geo, Le Figaro, The Guardian, and Greenpeace International. In recent years Jeremy’s work has taken him to over 40 countries, as far flung as Antarctica and Outer Mongolia. His personal and commissioned work, for which he has received photojournalism awards, has been widely published and exhibited in Europe and the United States.

“I don’t come from a country noted for its delicious cuisine, but my undeveloped palate can still discern an interesting meal when I eat one. Mibu did not fail to deliver.”

Kenichi Ohmae Graduate School of Business MBAグローバリゼーション専攻

大前研一学長を始め、世界の経営 者の指導のもと、一流の経営戦略 と思 考プロセスを学び、国 際 的な ビジネスリーダーに成長できます。 本校は日本で唯一、文部科学省が 認可した、サイバー（インターネット や衛星放送） ネットワークを利用した 遠隔教育方式の経営大学院です。 時間や場所の制約を受けないので、 企業に在籍したまま、 いつでもどこか らでも講義を受けることが可能です。 異なるビジネス環境（英語環境） にお いても 「仕事をやりぬく」、 「 結果を出 すことができる」人材の育成を目指し た、 まさに実践的なプログラムです。 ビジネスブレークスルー大学院大学

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F rom the E ditor

Battle of the One of the fascinating aspects of this job is learning about so many interesting and unusual European products, including a few brands in Japan I didn’t even realise were European.

It’s a cliché that this is the “land of brands”. But considering Japan’s love for labels (especially expensive ones), it’s incredible how bad the nation is at branding itself. That’s the topic of David McNeill’s important story in this issue (page 22).

Branding on the internet is another issue of importance to European businesses here. Rob Goss talks to three Tokyo web designers (page 16) about creating a company website, and the quirks of the Japanese Net. I hope the article will be of practical use to readers.

In our third feature, writer Alena Eckelmann hears about a host of well-known European brands in Tokyo (page 10), from audio equipment to

NEXT MONTH

3 Forget China

brands

tableware to furniture. What makes them successful, she asks? And how easy is it to bring new brands to Japan?

Europe itself clearly has a strong brand image in Japan, thanks to historic links and its popularity as a tourist destination. But cultural attractions can

Why Japan still has plenty to offer

3 Medical devices

The work of the EBC committee

overshadow business prowess. Many Japanese seem to see Europe only as a far-off land of fine food, wine and music, despite the fact it has the largest economy in the world and a strong trading relationship with Japan. The challenge is to demonstrate the European business opportunities actually on Japan’s doorstep.

Another imperative, of course, is to persuade Europeans back home of Japan’s value as a destination for investment. In that area, the Japan brand faces serious competition, not least from China. How to explain that Japan is still a stable, profitable and pleasurable place to do business? EURObiZ will be focusing on that in December.

Tony McNicol Editor-in-Chief

tonymcnicol@paradigm.co.jp

3 Master brewer

Japan’s only foreign-born sake toji

L etters

inbox

Contact us via: eurobiz@paradigm.co.jp or www.eurobiz.jp Letters to the editor may be edited for length and style.

Invest in human resources, rather than change taxes I really doubt the efficiency of lowering [corporate] tax (A taxing issue, October 2010). The reason is that companies are focusing on their profits more than on any solidarity with the population. I believe they won’t change their pricing policy, and the gains from lower tax will be used to boost profits.

On the other hand, I think that the competitiveness of Japanese companies is not related mainly to taxes. If you take international companies, you will notice they have built their success according to different parameters. Sony has offered revolutionary items such as the Walkman that have changed the lives of people around the world. Toyota has introduced a new [industrial] production system which offers huge advantages.

Of course lower taxes or a weaker yen will help Japanese companies, but I think that human resources are the essential difference between success and failure. The Japanese Government does not need to lower taxes,

but they should invest more for the future – a long-term investment. That means better distribution of budget money.

I think politicians should have the courage to focus on young people, instead of just on the elderly in order to be re-elected.

These problems won’t be solved in one year, or even five years. That’s why the government should think of it as a longterm investment for the future, our children and the children of our children. It starts from now!

Sebastien, comment on eurobiz.jp

Don’t worry about Shimokitazawa (Shimokitaza nights, October 2010) Shimokitazawa will expand and absorb the development and become one of the coolest Tokyo hubs and spots for entertainment, dining and residence. It will become an even cooler place to live and breathe in Tokyo!

Mari Graystone, comment on eurobiz.jp

Not to be sniffed at Recently, EURObiZ is the magazine I read most avidly. The paper quality and smell are excellent. @hirokato, via Twitter

In Japan – it’s all about the permission In Europe and the United States, public relations practitioners often approach solutions to client issues in terms of creating a discussion or dialogue. This is because, in many western cultures, the great diversity of the society creates a dynamic that requires an assessment and analysis from a number of different perspectives. Stakeholders want to have information that they can then discuss in order to make a more informed decision about a company or its products.

In Japan, however, the homogeneous nature of the society – where the vast majority of people have very similar cultural, religious, educational and genetic backgrounds – a very different dynamic occurs. In a monocultural society, the attachment to the group is much stronger than

in societies where more emphasis is placed on individuality. There is a stronger motivation for people wanting to fit in and “comply” with group expectations. Who among us hasn’t had the experience of a Japanese person saying to us, “We Japanese …”, when referring to the reason for a certain type of behaviour?

So, in Japan, the objective of a public relations campaign is articulated against a very different cultural background. In any other country, public relations seeks to reinforce existing behaviours or inspire new ones. In Japan, trying out a new product, for example, needs to be inspired by first creating “permission” for the targeted stakeholder to break away from the “norms” of the group. Domestic companies already have secured a large portion of

this “permission” simply by virtue of being Japanese. For western companies, securing permission is more challenging – requiring a highly strategic approach to public relations and interaction with stakeholders.

Ross Rowbury is President of the Japan office of Edelman, the world’s largest independent public relations firm. He has been advising companies on building success through public relations for more than 15 years. ross.rowbury@edelman.com

Euro cool How European design conquered Japan Text Alena Eckelmann

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November 2010

F ocus

S

leek tableware, pop-art kitchenware, hightech audio equipment, futuristic furniture or demi-couture fashion, European design is a familiar sight in Tokyo’s trendy shopping districts.

Long-established and iconic brands from France, Italy and Scandinavia have become household names. Yet, young designers from Europe can still find a way into Japan’s crowded consumer and business-to-business markets.

But according to Yuko Baldon, a young Japanese interior designer, Japanese people do not actually think of “European design”. Rather, they associate certain types of products with certain nations. “We usually relate Italy to fashion, furniture and cars; Scandinavia to furniture, textiles and tableware; and France to fashion,” she says.

Scandinavian and Italian furniture has been sold in Japan for over half a century, points out Ken Hashiba, senior sales manager at the Tokyo branch of Scandinavian Living, a Danish designer furniture company. “Japanese people are either a fan of Italian steel, leather and glass designs, or of Scandinavian wood and handicraft,” he says.

Japanese people like “human design” and not “industrial-sharp” design for tableware, notes Masashi Kuriki, Japan vice-president of Alessi, the Italian designer kitchenware brand. “The key word is emotion – items with a soft and humorous design that shows warmth of heart,” he says.

Philippe Jardin, managing director of Villeroy & Boch Tableware Japan, says that a feel for Japanese lifestyle and Japanese customs is invaluable. “Our collection tries to find a good balance between inspiration

Our products relate to the continental European lifestyle and culture, yet they are practical enough to be used in daily life.

Philippe Jardin, Villeroy & Boch Tableware Japan

from Europe and familiarity with Japan,” he says. “Our products relate to the continental European lifestyle and culture, yet they are practical enough to be used in daily life.”

At Villeroy & Boch’s two “creation” stores in Tokyo’s Aoyama and Jiyugaoka, the company positions its brand as “homeware”. The Metropolitan

collection of stylish white tableware, for example, is marketed as “daily relaxed luxury”. This collection now accounts for 60% of Villeroy and Boch’s sales in Japan. It is particularly popular with urbanites in their mid-thirties and forties who enjoy serving home-cooked Western and Japanese dishes in stylish tableware.

Establishing a Japanese subsidiary and directly managed sales outlets was integral to the success of many companies. Alessi, for example, started selling products through distributors in the 1970s before finally setting up a subsidiary in 2008.

Their breakthrough came after taking over the distributor-run Alessi flagship store in Tokyo’s Aoyama district.

“Importers make a product selection to build their collections, but we wanted to be able to show our complete and

November 2010

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FOCUS

Japanese people like human design Masashi Kuriki, Alessi Japan

diverse range,” says Kuriki.

Villeroy & Boch also started selling via distributors four decades ago.

But it was only after they set up a Japan subsidiary in 1997 that business really took off. Now they operate two full-price stores and two outlet stores, as well as work to expand sales through department stores. They plan to increase their 32 sales points to possibly between 60 and 80.

Showrooms allow companies to provide the detailed and dedicated service that Japanese customers seek. “All of our showrooms are run by quality dealers,” says Steve Lin, retail development manager at Bang & Olufsen Japan. “They will still be there five or ten years down the line when the customer has a question or wants to buy another Bang & Olufsen product.”

“It is like comparing a hotel with a ryokan,” adds product and service manager Takatoshi Hashimoto. “There is a high level of quality service at both, but at the ryokan you get a closer and more personal service. This is what we try to offer at Bang & Olufsen.”

The Danish audio equipment maker has been in the Japanese

market since the 1980s. At first, import and distribution was handled by local company Marantz, but in 1999 Bang & Olufsen Japan was established as a national sales office to manage all operations directly.

They then began to eliminate sales through shops that also stock other brands, instead setting up Bang & Olufsen concept stores, showrooms of at least 60m2. Bang & Olufsen now has a dealership network overseeing the full retail operations of 10 stores, four of which are in Tokyo.

Hard work and good luck Despite the success of such iconic European brands, the Japanese consumer market is huge and with enough room for newcomers. However, success in such a saturated market requires not only persistence but also good timing.

DePLOY demi-couture, a young British fashion brand created by fashion designer Bernice Pan, attended “weareurope”, a business mission organised by the EU Gateway Programme this March. There, they caught the interest of the Takashimaya

November 2010

13

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FOCUS

Japan remains a very important market for designer brands and it sets the standard for Asia Steve Lin, Bang & Olufsen Japan department store chain’s senior womenswear buyer, and found a place in the “Luxury Selection” of Takashimaya’s brandnew flagship store in Osaka.

“It was a combination of hard work and good luck,” says Pan. “We wouldn’t give up but kept calling their offices to try and find the right contact in their very hierarchical organisation. At the same time, we tried to interest junior buyers, and we sent our presentation several times. The senior womenswear buyer eventually came to our show.

“As for the luck part, the euro had dropped against the yen so much that they still had money in the budget after coming back from Paris Fashion Week – and so they took us on straightaway.

Newcomers to Japan can take advantage of trade fairs as well as market-entry services offered by the chambers of commerce in Japan. This year 35 European companies participated in weareurope, which attracted approximately 450 visitors.

In June, an interior design business mission organised by the EU Gateway Programme included 38 EU companies and was attended by about 550 visitors.

This mission was scheduled to coincide with Tokyo Designers Week which participants from some countries, such as Poland and Sweden, also attended.

Japan’s business-to-business markets offer other opportunities, says Akiko Yanagisawa, senior commercial officer at the British embassy in Japan. “We see a great chance for British design as a tool to achieve strategic business-to-business goals, and particularily engineering.

“We have succeeded in matching UK design consultancies and Japanese manufacturing companies through our promotions,” she says. UK Trade & Investment in Japan has been active in raising awareness of British design and generating business through their various projects, including the UK Design Service missions.

A new sales strategy Nor is the recession necessarily completely bad news for European design. It might have curbed the appetite of Japanese consumers for expensive designer brands, but companies should adjust their sales strategy to fit changing lifestyles, argues designer Yuko Baldon.

“The younger generation in Japan is now less interested in wearing expensive designer brands, for example, simply because they cannot afford them,” she says. “After the global recession we also feel ashamed if we only put on expensive clothes. Hence, a mix of expensive designer labels and fast fashion is in now.

“This is why European fast fashion brands such as Zara and H&M have become so popular – but we still buy designer labels”.

Bang & Olufsen’s Lin agrees. “Japan remains a very important market for designer brands and it sets the standard for Asia,” he says. “Just look at the huge investment that Mitsukoshi put into the renewal of their Ginza department store and you know that there still is a market for designer brands here.

“We just have to grab the customers.”

November 2010

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Tricks to get clicks Experts offer advice on the perfect corporate website Text Rob Goss Photos TONY MCNICOL

Your website is one of your most important business tools, but are you getting enough out of it? Is your site as culturally attuned to Japanese consumers as it could be?

Could your content be more dynamic?

To get some advice on these and other questions, EURObiZ spoke to several of the Japan web and localisation industry’s leading lights: Anatole Varin, director at The Plant, a web development company with offices in Tokyo and Hangzhou; Guillaume Hansali, founder and CEO of Wizcorp, a French web development and consulting company headquartered in Tokyo; and Chris Palmieri, co-founder of Tokyo-based, multicultural creative agency AQ, which specialises in digital product design.

Which is more important, appearance or usability?

Anatole Varin: “Ideally the two should go hand in hand. Very usable

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November 2010

Guillaume Hansali: “A website is not a standalone medium; it must be part of your marketing strategy.

If appearance is important for your brand, then it is for your website.

Usability, on the other hand, is not an option. Your site must be user-friendly and help the user find content meaningful to them.”

Anatole Varin

sites generally both look and feel good, and make users relaxed with uncluttered designs and simple controls.”

Any advice on translating and localising a website?

Anatole Varin: “Translation is an art form; it’s very difficult to get a good translation when crossing large cultural divides. As with every aspect of your website, invest as much as you can and work with professionals. It is one of your most important marketing channels and is how people

FOCUS

Japanese websites often go to great lengths to explain the benefits of their offering and how customers can take advantage of it.

[They use] scenarios, FAQs, comics, step-by-step tutorials, or videos.

Chris Palmieri, AQ Chris Palmieri

and other companies will, to a great extent, judge you.”

Chris Palmieri: “There are many companies with successful products or services overseas who see an opportunity in Japan, and test the waters with what they see as the minimum viable commitment. They translate their site into Japanese, without tuning their offering, message, or design to match local conditions and tastes. In many cases, the result is worse than if they had done nothing at all.

“Maybe they use a stock photograph of an Asian family, but the clothes, hairstyles and room decor are all off just enough to reveal that it’s not a Japanese family. Maybe they paste translated text into their page layouts, but don’t bother optimising font-sizes or column widths to compensate for differences in the visual texture of Japanese kanji and the Roman alphabet.”

What about localisation issues beyond words and images?

Chris Palmieri: “There are also many

differences in how Western and Japanese brands communicate. For example, Japanese websites often go to great lengths to explain the benefits of their offering and how customers can take advantage of it. This might take the form of use scenarios, FAQs, comics, step-by-step tutorials, or videos, either integrated in the service experience, or sometimes as standalone websites.

“Of course this kind of content exists on Western websites, but often in a much simpler form, and with a higher expectation that users will figure things out themselves.”

How important is search engine optimisation (SEO) for generating traffic?

Guillaume Hansali: “Search engine optimisation is one of the most powerful ways to increase relevant traffic, but you need to be aware that SEO has evolved a lot recently as search engines become more intelligent.

“You cannot deceive search engines anymore by putting a lot

of keywords in your meta tags. You need relevant content that’s fresh and dynamic, and that must be part of your social marketing effort.”

Anatole Varin: “Getting good SEO is more of a marketing activity than a technical one. Have something interesting to say, say it, let people know that you said it. These activities will get people talking about you and linking to you, which is exactly what search engines are looking for.”

Is ready-to-use web software such as WordPress suitable for business use?

Anatole Varin: “An off-the-shelf solution may be the best option for something like a brochure-ware site [an infrequently updated site that simply replicates printed material] if it’s built and maintained by someone knowledgeable with the platform. But if you are looking to build in features such as catalogue management and e-commerce, consider other solutions.

“My rule of thumb is to choose a packaged product [like WordPress] when the built-in features are a close

November 2010

17

FOCUS

fit to the project. I have always had bad experiences when trying to force a package to do something it was not designed to do.”

Guillaume Hansali: “It really depends on a lot of parameters, the most important being your budget and your long-term vision. If you are on a tight budget, customising an off-the-shelf solution like WordPress can be very cost effective. You just need to be aware of its limitations.

“Adding new features asks for technical skills, and some features might even need core modifications of the software, which can be very time consuming and costly. If you can afford the higher set-up cost, a custom-built site will be a cheaper long-term option.”

Recommended websites “I quite like the site of iA, who work downstairs from us, mostly because the contents are good (he always has something interesting to say) and the design is super clean.”

Anatole Varin

www.informationarchitects.jp

“This site is very efficient in the way it explains its business. The design is very simple but powerful.”

Guillaume Hansali

www.hugeinc.com Guillaume Hansali

Will the site need regular updating?

Guillaume Hansali: “Yes, a website has to be dynamic and updated. It’s a living media, and that is what makes it different from a magazine or a pamphlet.

People never come twice to a website that doesn’t change.

“The more reasons you give potential or existing customers to visit your website [whether that be regular editorial content, forums or online discounts], the better exposure they will have to your brand and your services.”

“Buying movie tickets off their website is effortless.

They could simplify their interface further by separating the English and Japanese, but the current design is just a little messy, not a complete obstacle.”

Chris Palmieri

www.tohotheater.jp

November 2010

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Friends or foes?

Julian Ryall talks to economist Naomi Fink about Japan and Chinaâ&#x20AC;&#x2122;s economic ties Photos Rob Gilhooly

Naomi Fink is the Japan strategist of the global markets unit at the Bank of Tokyo-Mitsubishi UFJ. Originally from Los Angeles, 35-year-old Fink graduated from the University of St Andrews in Scotland and has a special interest in the economic relationship between Japan and China.

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November 2010

Q&A

How would you describe the economic relationship between Japan and China at present?

I would characterise it as one of increasing interdependence. Trade has been growing, both in terms of imports and exports.

After a period of exponential growth, there is now a total of ¥1 trillion in trade between Japan and mainland China.

Investment might be lagging slightly, especially portfolio investment, but that is largely due to Chinese capital controls.

Investment and trade are the two greatest areas of rising interdependence, while political interdependence lags behind. That said, Sino-Japanese relations have visibly improved over the last 10 years. The challenge will be to continue improving bilateral relations (and refrain from economic protectionism), even as they are periodically tested by tensions such as those over the Senkaku islands.

a share of gross domestic product, thus allowing the country more stable growth.

How has the relationship changed in the last five years?

Ballooning volumes of bilateral trade are the most obvious change. Beyond purely bilateral trade, both countries’ intraregional trade volumes are rising; and they compete in third markets. For example, with the emergence of China’s steel industry, both economies compete for iron ore and coal, which has driven the prices for these commodities sharply higher.

But trade with the United States has decreased as a share of total trade, which means that Japan and China’s relationship as both partners and competitors is more important than before the financial crisis.

What has been the reaction – in both countries – to China becoming the world’s second-largest economy?

When a nation commits to maintaining large current account surpluses, the highest ranking its economy will ever be able to reach is number two, since as a net saver you export to an economy that consumes more than you. If the plan is to remain a net saver, why should Japan be dismayed at having another vast economy to export to?

Where does the United States fit in today?

United States demand in the post-war period has remained a constant source of overseas income for Japan, even after the bubble burst in the early 1990s. Now, not only has the US’s status as a source of constant demand been thrown into doubt, but there is also another large player in the game, already a large investor and exporter but with the potential to become a much larger consumer and importer.

So while there is a lot of potential in Chinese growth, it would be a mistake to simply substitute China for the US: firstly, because China, a large emerging market economy, is much more volatile than the US; and secondly, because China, like Japan, is still a net saver rather than a large importing consumer. China has yet to increase domestic consumption as

Can Japan benefit from a more powerful China?

Yes, through both trade and investment.

As China grows, the demand for Japanese exports should grow, which will obviously benefit Japan. But Japan is actually more dependent on investment income than net exports now for growth. Direct investment by Japanese firms active in China has boomed and has much potential.

Still, this means that Japanese firms will have to adapt to new competitive standards abroad, such as rising wages among Chinese factory workers.

Additionally, Japan has room to accept more inward investment. Deflationbeset Japan could benefit from the reflationary impact of Chinese inward investment on local asset prices.

Is China going to become the world’s largest economy?

International Monetary Fund estimates of GDP on a purchasing power-adjusted basis point to China catching up with the US by the middle of this decade. The Economist Intelligence Unit estimated at a recent conference that China’s GDP would exceed that of the US by 2020.

But this also means that China will have to move from an exporting nation to a net consuming nation, which implies drastic changes in its economy first.

Should the West – specifically Europe – be worried?

Europe as a region is a net exporter, so the rise in Chinese consumption is an opportunity, even if China remains a trade competitor in some areas, such as textiles or shoes, which in the past have been areas of bilateral trade tension. On the investment side, Europe has seen its share of challenges recently: markets have reacted violently to the Greek crisis, for example.

And this underscores that, even though Europe is an external surplus holder there are many countries – such as Spain, Greece and Britain – that are dependent on foreign investment. The Chinese government remains one of the world’s largest, thus most influential, investors – which is important for European capital markets too. Chinese officials’ recent expressions of confidence in European bonds arguably helped to dampen panic over capital flight.

Might we finally see “decoupling”?

It is natural that emerging markets should grow more quickly than developed economies. Still, a complete divorce of growth in emerging economies from demand in developed economies is unlikely. Certainly there are divergences – the overall number of mergers and acquisitions has peaked in the US but is still rising in Asia, for example. That said, the Group of Seven is still by far the largest contributor to global trade. China, in this context is still dependent on the G7, and will be for a while.

What are the biggest potential pitfalls, on both sides?

Protectionism from either side which, in most situations, invites inflation.

China is already trying to keep consumer price rises under control, but will struggle as long as it manages its currency tightly against the falling dollar. Japan, of course, is in deflation; but simply forcing the price of imports up through trade or investment barriers is not the answer – this could erode the margins that Japan’s most competitive multinational firms have striven to preserve.

What does Japan need to do?

Given sluggish growth in the US, and volatility in Chinese demand, the Japanese services sector – which provides 70% of Japanese jobs – might not remain subsidised by exports. Japan might need to recognise that, as a large and mature economy, its current struggle to extract domestic recovery from a less reliable recovery in exports might not prove as fruitful as in the past. This is because its past reliance on exports for growth might have been over-dependent upon debt-fuelled US consumption, and thus anomalous.

The services sector might become more productive, and hence investment-worthy, by upgrading technology – while more efficiently allocating labour as well as capital.

November 2010

21

Rebranding Japan needs to burnish its lackluster image Text David McNeill

O

nce upon a time Japan’s image essentially took care of itself. The nation’s manufacturing prowess, juggernaut economy and hyper-modern cities made it seem cool and attracted global attention – even envy. But two lost decades have taken the swagger from the gait of this once confident giant.

Halting Japan’s slide down the economic league tables is the job of the one-year-old DPJ government. In the meantime, Japan needs rebranding. Former Prime Minister Shinzo Abe tried with his nationalist-tinged “Beautiful Japan”; his successor, the manga-loving Taro Aso, opted for “Cool Japan”.

The Ministry of Economy Trade and Industry (METI) has also adopted “Cool Japan” as the banner slogan of a new office promoting popular culture as soft power. “We want to heighten Japan’s brand image through a strategic overseas marketing move in such areas as anime, design and fashion, and tie that into economic growth,” a METI official said this summer in an interview with the Japan Times.

METI understands that branding is a serious business. Apart from the growing economic clout of the so-called culture industries, at stake is a slice of the huge international market for foreign direct investment (FDI) and visitors. Japan has been slow to attract both.

At the end of 2009, FDI accounted for just 3.9% of Japan’s gross domestic product (GDP), compared to 51.7% in Britain.

About 6.7m tourists came to Japan in 2009, according to the Japan National Tourism Organization – down 18.7% from 2008 and about half the number of Japanese who went 22

November 2010

abroad. Since roughly one million of those visitors were Chinese, the organisation is nervously waiting for the fallout from the recent spat over the disputed Senkaku Islands, which will likely hit growing tourist links.

To help meet its eventual target of 30m visitors, the government this year dropped the unloved “Yokoso [welcome] Japan” for the all-English – if clunky – “Japan. Endless Discovery.”

Will it work? Richard Okuno, managing executive officer of the Tokyo-based Rheos Capital Works, an asset management company, is not optimistic. “Japan hasn’t been very good at promoting itself to the outside world, whether it be for tourists or investors,” he laments.

The heavy hand of officialdom is partly to blame, he says.

“Foreign tourism is under the purview of the Japan National Tourism Organization, a semi-government entity padded with retired bureaucrats. Because government supported entities have to be even-handed and “fair”, they can only say things like “cherry blossoms are beautiful in the spring” or “Mt. Fuji is worth a climb”.

The new campaign logo – a red-and-white design depicting, er, cherry blossoms – will help let the world know “how good tourism in Japan is”, promised then-Land, Infrastructure, Transport and Tourism Minister Seiji Maehara at its launch this year.

Perhaps, but Maehara should focus on making sure the slogan is backed by a genuinely warm welcome, advises Keith Dinnie, a professor at Temple University in Tokyo and author of “Nation Branding: Concepts, Issues, Practice”. “At the moment, for non-Japanese speaking tourists, Japan really is not geared

FOCUS

Expert advice Richard Okuno, managing executive officer – Rheos Capital Works, Tokyo “Let Japanese marketing companies create the national branding campaigns. It could be an open bid system – where Dentsu, Hakuhodo and the other giant advertising companies can compete for the mandate.”

Graham Harris, The Harris Consultancy “The Government needs to give more practical support – not just more posters or imploring hotel owners to be nice to foreign travellers. The government should take the lead by setting up a system of very attractive hotels as the Spanish government has done with Paradores, and the Portuguese government with Pousadas.

Masaki Sakamoto, Director, Hawaii Tourism Asia “Opening up Haneda Airport as an actual international airport is one step forward.

Haneda is obviously much more convenient than Narita for both international visitors and the Japanese travellers. Japan should focus on promoting ‘Pan-Asia’ routes with Korea and China first to develop the markets.”

Keith Dinnie, founder of branding consultancy, Brand Horizons “Place much more emphasis on promoting food and drink culture, rather than just riding the anime and manga bandwagon.

To most foreign consumers, Japanese food

to provide such a welcome,” he says.

Both Dinnie and Masaki Sakamoto, a former executive marketing manager at the Korea Tourism Organization, again single out the sluggish bureaucracy. “Japan was so slow to start targeting the soon-to-explode Chinese market,” says Sakamoto, who is now director of Hawaii Tourism Asia. Visa restrictions for Chinese visitors were finally relaxed in July, he accepts, but adds that infrastructure such as language aids and credit/debit-card access are “so behind”. Japan didn’t even have a tourism ministry till last year, he notes.

South Korea in the lead If Tokyo wants to learn how to burnish a lackluster national brand, it doesn’t have far to look. Once Japan’s poorer country cousin, South Korea is powering ahead with plans to make the country more attractive to investors and tourists. South Korea’s Trade-Investment Promotion Agency (KOTRA) has become one of Asia’s most aggressive, with branches in over 70 countries and a monthly English-language magazine. Its officials bombard journalists with all-expenses-paid invitations to its annual investment forum in Seoul.

Dinnie points out that President Lee Myung-bak recently set up the Presidential Council on Nation Branding to coordinate national image-making. According to Japan’s Agency for Cultural Affairs, South Korea spends six times as much money on “cultural activities” as Japan.

Sakamoto adds: “In Seoul, there are language – Korean/ Japanese – translating machines with computer access in every major commercial area.” Meanwhile, Japan “failed to provide effective services at Narita as a hub, [even as] Incheon Airport became such a successful international hub airport.”

In contrast, the Japan External Trade Organization (JETRO) appears passive, at best. During his visit to Tokyo last year Britain’s then-business secretary, Peter Mandelson, criticised the vast discrepancy in foreign direct investment into Japan.

This despite the fact that Britain, as one of Europe’s most open

is still limited to sushi. But Japan has a wonderful food culture. For example, they could promote and support in foreign markets the establishment of izakaya [casual restaurants]”.

Balint Rei Kosa, Director for Japan/ South-Korea, Hungarian National Tourist Office “Japan is the only country in the world which is working on its outbound tourism.

It is called the Visit World Campaign. It is unique and I hope will be more successful in the future. Can you imagine a country which says “Go abroad [and spend money]”.

They even pay us to promote European destinations to Japanese tourists.”.

The Japan National Tourism Organization has a new campaign logo

economies, has a comparatively healthy bilateral trade and investment relationship.

In 2009, the UK exported £7.5bn of goods and services to Japan, and imported £10.5bn, according to James Clements of UK Trade & Investment.

“Avoiding Japan has been a good investment strategy for the last two decades, but this bear market won’t last forever,” says Okuno of Rheos Capital works.

That perception that Japan is a poor destination for investment is a result of political priorities, says Dinnie. “[It] probably reflects a wide view in society that it would not be in Japan’s interests to open up its economy to predatory foreign companies who would come into Japan and make thousands of employees redundant in order to reward the company’s shareholders.”

Still, perhaps Japan could follow the approach of Germany, an economy also dependent on manufacturing and exports but much more open to foreign capital and tourists, points out Robert Scheid of Germany Trade & Invest. “Germany treats foreign investors the same as German companies. We are very open to foreign investment.”

His advice? “Stick to your guns, and what you’re good at. Germany is pulling itself out of recession by riding its reputation for innovation and high-quality manufacturing. Japan should do the same.”

November 2010

23

EXECUTIVE NOTES

Carnivore vs. herbivore The virtue of Japanese caution

There is a fine article in The New York Times today.

It describes a familiar situation in familiar terms: Japanese consumers’ reluctance to spend, their hatred of consumerism, and “herbivore” males. A worrisome comparison with the US is made: could American carnivores really trade in their Ford Mustangs for tiny, electricity-driven cars, or heaven forbid, a bicycle with a basket at the front?

Yet laughable as this may seem, I think it reflects a truth about Japan. Like a stopped clock, it may show a different time to the rest of the world most of the time, but twice a day it’s absolutely accurate.

There is a very slow trend beginning to develop in Western consciousness that pell-mell GDP growth can not continue forever. Economist, Joseph Stiglitz, got the ball rolling when he dissected what “GDP growth” actually means, and concluded that it failed to discriminate good and bad economic activity – it just measures economic activity.

But I was touched to see that even Harry Eyres in The Financial Times “Slow Lane” column has begun to question the concept. Eyres comes out with some nice lines, based on his experience as a professional gardener. He says that incessant GDP growth is contrary to nature, which shows a cycle of growth, death and rebirth. And he notes, approvingly, some of the characteristics pointed out by The New York Times, as well as other organisations, like Japan Market Research.

The important thing is, that if we take this approach seriously, it makes Japan look very different. Rather than a failing, declining country which has lost the “animal spirits” so beloved by Wall Street, we can see a wiser, more sober nation which has learned from the excesses of the past.

This attitude was often misunderstood by foreign financial investors in Japan. They saw it as over-caution at best, and a Japanese corporate conspiracy at worst. As one private-equity banker put it to me: “Japan is run by 100 people, and they don’t want anyone to upset the apple cart.”

Come to think of it, isn’t that what a lot of people now say about Goldman Sachs’ influence on the US economy?

It always rankled local companies that foreign financial companies felt they could ride roughshod over them, as if

the Japanese have a level of paranoia that is quicker to rise to the surface in times of stress God had arranged the universe to suit bankers. The shining certainty of firms like Steel Partners was quite off-putting, even to non-Japanese.

And it should be humbling to the men in pinstripe suits and loud ties that this supposed meritocracy failed abysmally in the most central of all its core functions – measuring risk.

It was the illusion that they could accurately measure risk that the Japanese never accepted. Perhaps living through a gigantic bubble sobered up the Japanese more quickly than the Americans (who had no trouble going from bubble to bubble). After all, post-war Japan is built on defeat, not victory. As a result, the Japanese have a level of paranoia that is quicker to rise to the surface in times of stress.

The prospect of failure never worried the financial investors – and with good reason, as recent developments since the financial crisis have shown. Although financiers justified slashing costs in their client companies as “nasty but necessary medicine”, it was rarely something they had to suffer themselves.

It will be interesting to see if the US looks to Japanese central bankers on how to run the economy, as well as on some of the painful lessons the Japanese have internalised.

If they did, the world would truly be “going Japanese”.

Dan Slater Dan Slater is director of the Economist Corporate Network (www.corporatenetwork.com) in Tokyo, and you can reach him at danslater@economist.com.

November 2010

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Austrian Business Council 3-13-3 Motoazabu, Minato-ku, Tokyo 106-0046 Tel: 03-3403-1777 • Fax: 03-3403-3407 Email: tokio@advantageaustria.org Reykjavik

www.abc-jpn.org/

ICELAND President:

Kurt Sieber (Nihon Getzner)

Honorary Chairperson: Jutta Stefan-Bastl (Embassy of the Republic of Austria)

EXECUTIVE COMMITTEE Executive Director:

Martin Glatz (Austrian Embassy – Commercial Section)

Members:

Horst Mueller (Hoerbiger Nippon)

Heinz Springer (NIPPON PLASSER)

Warren Hesse (SITOUR JAPAN)

Hideo Hari (Swarovski Japan)

Michael Loefflad (Wuerth Japan)

NORWAY Auditor:

Dietrich Oelschlaegel

ESTONIA

LATV

SWEDEN

More than just a cultural power DENMARK

LITHUANIA

Copenhagen active participant in the EBC and its committees is very imporEach year, about 200,000 Japanese people visit Austria to RUSSIA tant for the Austrian Business Council,” says Sieber. He highexperience music, art, royal treasures, and the rich history lights the situation in one of his own segments of business, the of a nation at the centre of Europe. Meanwhile, the Austrian railway industry. “When we started the EBC Railways Committee Business Council in Tokyo (ABC) provides a firm anchor for just last year no one would have dreamed of the amount of Austrian business in Japan. progress we enjoyed during this one-year period,” he says.

“A big part of our work is creating networking opportuniNETHERLANDS POLAND ties for Austrian companies in Japan,” says ABC president,Kurt Sieber. According to its website, the ABC provides a platform for the activities of the Austrian business community.

Business relations between Austria and Japan date back BELGIUM to 1869 when a trade agreement with the Austro-Hungarian empire was signed. Yet, the ABC was only founded in 1996, CZECH REP. actually making it one of the youngest European chambers of commerce in Tokyo. It has 70 members keen to cooperate with GERMANY SLOVAKIA other chambers.

Vienna The ABC’s modest size is explained by its close cooperation with the commercial section of the Austrian embassy which FRANCE HUNGARY actually is an office of Advantage Austria, the foreign trade RO SWITZERLAND organisation of the Austrian Federal Economic Chamber in SLOVENIA Vienna. Through Advantage Austria, Austrian companies in Geneva Japan have access to the wide range of services offered by one CROATIA of the world’s largest trade promotion organisations.

ITALY The chamber’s membership of the European Business Council allows the ABC to lobby the Japanese government. “Being an YUGOSLAVIA

PORTUGAL 26

November 2010

SPAIN

ALBANIA Tiranë

Sk

MACE

C hamber S potlight

Swarovski’s Ginza flagship store

The executive director of the ABC, Martin Glatz, who is also head of the commercial section of the Austrian Embassy, says that Austria has a strong and positive image in Japan. “Many Japanese people have studied music in Vienna; that’s a good start,” he says.

“But Austria is more than just a cultural power.”

He and Sieber point to a long list of world-famous Austrian companies represented in Japan, including Swarovski crystals, Red Bull energy drinks, Riedel wine glasses, and Rosenbauer fire-

Plasser & Theurer railway equipment

fighting vehicles. Railway equipment and track component makers Plasser & Theurer and Getzner Werkstoffe also have a solid base here.

Austrian business in Japan covers a wide range of industries, including medical instruments, railways, life sciences, food and wine (see upcoming events, page 55). Also, people in the industry still talk about the Austrian Railway Seminar at the Japan Press Centre in May 2009, followed now by an Austrian Exhibit at Mass-Trans Innovation Japan in Makuhari Messe from 10-12 November.

The 2010-2011 skiing season marks the one hundredth anniversary of skiing in Japan. The Austrian army Major, T.E. von Lerch, introduced skiing to Japan and started the first skiing classes for civilians in today’s Joetsu (Niigata). To this day, Japan is one of the most important markets for Austrian skiing equipment.

“Most of our trade is in engineering and materials,” says Glatz. Austria exports many specialised industrial products, and also has vast experience in forestry, biomass and wooden architecture. Like Japan, about 70% of Austria’s landmass is forest.

“Japan has neglected its forests, but Austria has the know-how,” adds Sieber.

Since Japan hasn’t been very successful

Being an active participant in the EBC and its committees is very important for ???????? ?????? ??????? the Austrian Business Council Kurt Sieber in utilising its forestry resources, it may learn much from Austrian partners, he suggests.

Austrian business’s future in Japan looks bright. With further growth in green technology, and Japan’s ageing population, there will be plentiful opportunities in medical instruments, life sciences, energy, and environmental technology.

Austria-Japan Economic Forum 2009

November 2010

27

Pillow talk

Tempur Japan

Text Alena Eckelmann Photo ROb gilhooly

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November 2010

I nvesting I n J apan

A

s anyone who has ridden a Japanese train, seen a university lecture, or attended a post-lunch business meeting can attest, one of the great national pastimes of Japan is sleeping – any time, anywhere.

That’s great news for bedding company Tempur Japan, who promise “The best sleep in the world, continuously”.

Kim Mortensen, managing director of Tempur Japan, has seen his company enjoy double-digit growth this year despite a bad economy and an overall decline in the Japanese bedding market of 16%.

TEMPUR foam, a visco-elastic pressure-relieving material, was developed in Denmark in the early 1990s. Pillows and mattresses made of the foam are now sold in 77 countries around the world.

Tempur Japan celebrates its 10th anniversary this year. With name recognition of 70% amongst Japanese consumers, Tempur has come from newcomer to household name in the Japanese bedding market in less than a decade.

To date, more than five million Tempur pillows have been sold in Japan – no mean feat considering their ¥12,000 and ¥20,000 price tags. When Tempur entered the market the average price for a pillow was about ¥2,000 to ¥3,000.

Yet, Mortensen has set his sights even higher – to change Tempur’s image in Japan from a specialist pillow company to one that reflects its status as the second-largest mattress maker in the world with a turnover of $1.1bn.

“If we want to be number one in the world, we have to sell mattresses in Japan, which is a big growth market for us. We believe in aggressive growth here, just like in China, Europe and the US,” he says.

They now have 500 sales points

throughout the country but Mortensen thinks that number could easily be doubled. When he took up his current role in 2007, Tempur was selling mainly through department stores, but Mortensen soon decided that had to change.

“Only 2% of Japanese people buy their mattresses from department stores while 60% get them from furniture stores. Logically, if we want to be a mattress company in Japan, we have to be where mattresses are sold,” Mortensen argues.

Tempur Japan established their headquarters in Kobe, a decision that turned out to be a major factor in the company’s success. Department stores in Tokyo had refused to give Tempur any space as their mattresses were considered “strange” for the Japanese market, and too big for display.

The Hankyu department store in Osaka, on the other hand, was at least willing to give Tempur pillows a chance.

“Many foreign companies are blinded by the numbers and only think of the potential 34m customers in Kanto,” says Mortensen. “In fact, there is a lot of resistance in Kanto because the market for almost any product is already crowded and buyers take few risks.

People in Kansai are more open to new products.”

Following their western Japan start, in 2007 Tempur opened a two-storey mattress showroom and shop at a prime Ginza location. Turnover there soon began to increase.

The showroom was Mortensen’s first

Tempur Japan 3 World HQ in US 3 Established in Japan 1999 3 Worldwide approximately 1,400 staff; in Japan 105 3 Most successful products are: Sensation Lite mattress, Original Neck Pillow, futons www.tempur-japan.co.jp

People in Kansai are more open to new products Kim Mortensen

project after joining the company. He introduced the Japanese custom of taking off one’s shoes, providing slippers made from TEMPUR material at the entrance, and selling them in the shop too.

“People spend time in the showroom, lie down on the mattresses and really relax. After walking around for 20 minutes in these slippers, they get into their own shoes and immediately feel the difference,” Mortensen says smiling.

All Tempur products sold in Japan are manufactured in Denmark and are the same as elsewhere in the world with one exception, futons. At the same time as actively marketing their mattresses, Tempur Japan recognise that 40% of people in Japan still sleep on a futon.

In fact, futons are currently the company’s best-selling product in Japan.

They are also made of TEMPUR pressurerelieving material, unlike ordinary Japanese futons, which are stuffed with wool, various fibres or cheap foam.

Tempur Japan have set up an automatic monitoring system that informs them of Tempur-related news on blogs and social media sites. On average there are 10 positive comments a day. To capitalise on this word-of-mouth promotion, a fan site was set up on the Tempur Japan website.

“We are doing all the marketing and PR that any company would do, but the biggest reason for our success is satisfied customers. They become repeat purchasers and they recommend us. It is strange, but we actually have fans; they are the best PR we can get,” says Mortensen.

November 2010

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Holiday Gift Guide Valrhona, chocolate maker to the world’s greatest chefs, invites you to celebrate the year-end holidays with panache.

Order Valrhona gift boxes and coffrets directly from our online store (ヴァローナ オンラインストア): www.valrhona.co.jp

Celebrate for the holidays with the global flavours of To the Moon and Back Catering.

Our passionate menu creations offer an evolving medley of flavours, styles and tastes that will make every event delicious and memorable.

Bang & Olufsen Japan.K.K. http://beostores.bang-olufsen.com/ Tel: 03-5847-8297 Email: jpbeoclub@bang-olufsen.dk

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November 2010

This year give the gift of SNOW, SMILES & MEMORIES! The professionals at Evergreen Outdoor Center are eager to provide your family or that someone special with a Christmas gift they will cherish for years to come.

Join us on our White Christmas Family Snowshoe or Evening Chocolate Fondue Snowshoe tours or join our international ski instructors for professional instruction on Japan’s premier resorts in Hakuba.

RIEDEL WINE BOUTIQUE AOYAMA is our flagship store, where we have the largest selection of RIEDEL glasses (over 160 kinds) and decanters (over 60 kinds) in Japan. Not only for wine but also for Daiginjyo (Japanese sake) and spirits. At our bar counter, discover how taste is affected by the glass’ shape.

An Italian Holiday Surprise your friends and business partners with a touch of Italy: a personal selection of unique wines, olive oil and authentic Italian food products by Italian owner chef Elio Orsara for VERA@ITALIA. Holiday toasts have never been so good!

Aoyama Twin Tower, East 1F,(Subway Aoyama itchome station), Tel: 03-3404-4456 http://www.riedel.com

Clipper is a leading brand of fair trade and organic tea in the UK, now available at selected stores in Japan, and on www.choosee.com CHOOSEE has a wide selection of delicious and award-winning organic, fair trade and natural foods. Now you can choose exceptionally with CHOOSEE.

Rougié Foie gras, a delicacy sure to please your most discriminating guests.

Rougié, the world’s leading foie gras brand, offers a wide range of products ideal as gifts.

Call 050-3498-6933 today.

November 2010

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Holiday Gift Guide Hearty Gift with Donation for AIDS Orphans The Body Shop Japan offers special charity gifts, “Body Butter Trio”, during the HIV/AIDS awareness campaign at 176 stores. Fifty yen per purchase will be contributed to the projects for women and children vulnerable to HIV/AIDS worldwide.

Happy Fruit ¥2,625 Joyful Holiday ¥2,940 Beautiful Scents ¥2,940

NOBU Tokyo’s Welcome Gift Please ask for the “EURObiZ Champagne gift” when making your reservation (not for bar-only). Valid from 1 Nov. to 20 Dec. for up to 6 guests each reservation.

Meet Chef Nobu in person during dinnertime!

27-29 Nov., Sat-Mon 17-19 Dec., Fri-Sun NOBU Tokyo Tel. 03-5733-0070 www.nobutokyo.com PHOTO Cristian BarnetT

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November 2010

Labeyrie was founded in 1946 in the French region of Landes.

Serve duck foie gras for its specific taste and discover the top of the range foie gras – IGP Sud-Quest label – for the unique pleasure of your guests. They can be purchased at our Nichifutsu Boeki web-shopping site: www.nbkk.co.jp/shopping/

Asset Management// The rewards of patience Text Geoff Botting

T

he asset-management industry in Japan had been on a roll for over a decade.

Thanks to prolonged near-zero interest rates, a state-pension system seemingly on the brink of collapse and an impending demographic crisis, institutions had been turning to asset managers to get more mileage from their money.

The ratio of financial assets under management in Japan, at around 8.4%, is still well below rates in Europe or the United States. Even so, asset management here has been a growth industry, with the amount of money under discretionary management now double what it was in 2004, the year belttightening reforms were introduced to Japan’s state pension system.

The party, however, came to a sudden end with the financial crisis of late 2008, and the industry continues to struggle in the wake of the global recession.

“Valuations [of assets] have dropped significantly over the past three years, and that’s generally hurt our numbers,” says Douglas L. Hymas, who heads the

34

November 2010

I was the new guy on the committee. I was quite active and quite vocal, and so to shut me up, they made me the chairman Douglas L. Hymas EBC Asset Management Committee.

Some of the smaller foreign players in Japan, he notes, simply pulled up stakes, including European companies that had specialised in Japanese equities. Yet others are determined to stick around as they sniff out new opportunities, mainly in treasury bills and sovereign bonds.

“The fact we’re seeing this at all is good news,” the committee chairman says.

Hymas is a relative newcomer to the EBC, having served as president and CEO at ING Mutual Funds Management Company (Japan) for 18 months. “I was the new guy on the committee. I was quite active and quite vocal, so to shut

me up, they made me the chairman,” he laughs.

He may be new to the EBC, but he’s a veteran when it comes to his duties on the committee; for the past decade the American has been lobbying on behalf of the asset-management industry in Japan.

Top of his to-do list is dealing with a proposed directive on alternative investment fund managers, commonly called the “AIFM directive”. This is an attempt by the European Parliament to move hedge funds – “the wild cowboys” of the asset management world, in Hymas’s words – into the sphere of regulation.

The committee is not opposed to regulating hedge funds. However, it sees some of the directive’s provisions as being unfair.

The directive would not regulate the funds per se but rather the people who manage them. Managers with any kind of connection to Europe, even if their funds are offshore with no direct European connection, would be subject to the regulations.

“If the fund has nothing to do with Europe, why should it be covered?”

Hymas asks. “We might be managing

I n C ommittee

over 100 funds in Japan, only one of which is being sold in Europe. So do we really need to cover this manager and force them to do all the filings and all the regulatory and compliance requirements?”

A fund set up in Europe designed to invest in Japanese equities would face a similar predicament. If the investment were delegated to an affiliate in Japan, then that affiliate would have a whole new set of rules to abide by. “This would force them to take on an onerous burden, filling out forms and other things they weren’t expected to have to do,” Hymas explains.

In its lobbying efforts over this issue, the committee has been working “arm in arm” with the Investment Trusts Association, Japan (ITA), an industry group of investment-trust management companies, and has been maintaining regular contact with the European Union. The European regulators have responded to a letter from the ITA and “given them some level of comfort, saying they would try to make exceptions in this first round. But we’re still concerned,” the committee chairman says.

Key advocacy issues 1) Requesting exceptions to the alternative investment fund managers directive. An EU proposal, the directive would regulate hedge-fund managers with even slight connections to Europe.

2) Putting an end to multiple inspections. The industry is currently subject to inspections by three Japanese authorities, which leads to duplicate inspections.

3) Exemption from reporting of large shareholdings. If a professional investor in Japan holds a stake of more than 5% of a listed company’s total stock, then they are required to disclose the holdings every second week.

The committee wants assetmanagement companies with no intention of acquiring control of companies to be exempted from this regulation.

The Asset Management Committee’s other major advocacy issues call for improvements to Japanese, rather than European, regulations.

One issue is inspections. Hymas

concedes that the inspection process has improved drastically over the years, becoming more and more professional and relevant. But the committee’s concern is that their members are subject to probes by no less than three different bodies: the ITA, the Kanto Local Financial Bureau, and the Securities Exchange and Surveillance Commission (SESC), an appendage of the Financial Services Agency.

“We’re not really sure why there’s a need for three different inspections,” Hymas says. “But couldn’t it be streamlined and made a little more efficient, and less burdensome?”

Despite such regulatory hassles, and the current downturn affecting much of the asset-management industry, Hymas is convinced that Japan offers rich rewards to those who are willing to watch and wait.

“When people compare Japan to a lot of other markets, they may decide they have better prospects elsewhere,” he says. “But those of us who have been here a long time realise that the numbers can be very large if you’re willing to wait it out and find the right opportunities. Then it can be attractive.”

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G reen B iz

Plastic fantastic French chemicals maker Arkema offers an alternative to petroleum-based products Text Christopher S Thomas

A

wareness of the environmental impact of consumption has put a lot of products under pressure, and consumer demand for green alternatives is driving change in industries from machinery to sporting goods. People want products from sustainable sources, but with the characteristics they’re used to.

That’s one reason why French chemicals maker Arkema has been seeing double-digit growth in sales of its castor oil-based bioplastics. Not only are the plastics, Rilsan and Pebax Rnew, better for the environment than their petroleum-based cousins, they are also stronger and more flexible.

Arkema has been making castorsourced bioplastics since WWII, but these last few years sales have taken off. “[Eco-friendliness] is a very important issue for consumer product makers,” says Guillaume Desurmont, general manager of technical polymers at Arkema Japan.

“They like the characteristics of these plastics, but they also want to be able to say their product is ‘green’; it’s a huge marketing advantage.”

The castor plant will grow happily almost anywhere, in poor soil and in semi-arid climates where food crops have a tough time of it. This dispenses with one common complaint against bioplastics, that making them from crops like corn or peas takes up farmland and drives up food prices.

Castor also needs no pesticides and very little water. Arkema avoids using beans from genetically modified plants, another consumer concern. It also sources the castor oil locally, from

Not only are the plastics better for the environment, they are also stronger and more flexible

The humble castor plant can be made into superior plastics

farmers near the company’s plants in India, China and South America.

Manufacturers have been taking notice, realising that castor oil actually makes a better plastic than, for example, corn-sourced bioplastics, and with properties even superior to petroleum-based counterparts. It also lends itself well to high-tech engineering applications.

Sports equipment maker Mizuno is using Pebax Rnew in its popular line of

Wave running shoes, for example, and during the last World Cup Sony marketed a soccer ball made from Pebax Rnew. It is also being used to replace metal parts in cars, and for corrosionresistant offshore pipes.

“The market potential for this kind of plastic in Japan and the rest of Asia is tremendous,” says Desurmont. Sales have been increasing 10% to 20% a year, mainly for use in consumer products. Arkema is expanding capacity in expectation of similar growth for the foreseeable future, and to guarantee stable supplies for clients, like Toyota and Mizuno, that are switching entirely to bioplastics for some products.

Because, as Desurmont puts it, “once you switch over to bioplastics, you can never go back.”

Mizuno’s Wave running shoes use Arkema bioplastics

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Industry experts | Market Entry and Consulting Compliance

“Enabling you to compete better and accomplish your goals in Japan”

J

apan is the largest nonEnglish speaking economy in the world and produces a significant portion of the world’s automobiles, machinery, chemicals and other high-tech products. While doing business in Japan is exciting and offers plenty of opportunity, the country’s unique culture, less familiar commercial practices and difficult language make it a daunting challenge for most foreigners.

However, with the right partner, these challenges can be overcome.

ECOVIS APO offers trusted Economy & Vision to make your business a success in Japan. We incorporate four professional enterprises to provide a comprehensive one-stop service to meet local regulatory requirements.

AP Outsourcing Ltd. handles the accounting and payroll outsourcing needs, essential for foreign firms here.

APO_Tax Corporation puts clients at ease with its tax compliance services.

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APO_Social Insurance Consultant Corporation addresses social and labour insurance needs for a client’s greatest asset, its employees. Kazuhiko Chiba & Co. serves as an audit and business advisor.

For information about our practices – enabling you to compete better and accomplish your goals in Japan – please contact Kazuhiko Chiba at kazuhiko.chiba@ecovis.com Ecovis is a leading global consulting firm with origins in Continental Europe.

We have over 3,300 people operating in over 30 countries. Our consulting focus and core competences lie in the areas of tax consultation, accounting, auditing and legal advice.

The particular strength of Ecovis is the combination of personal advice at a local level with general expertise of an international and interdisciplinary network of professionals. Every Ecovis office can rely on qualified specialists

in the back offices, as well as the specific industrial or national knowhow of Ecovis experts worldwide. Such diversified expertise provides clients with effective support, especially in the fields of international transactions and investments – from preparation in the client’s home country to support in the target country. In this type of consulting work Ecovis concentrates mainly on mid-sized firms. Both nationally and internationally, our onestop-shop concept ensures all-round support in legal, fiscal, management and administrative issues.

The name Ecovis, a combination of the terms ‘economy’ and ‘vision’, expresses both our international character and our focus on the future and further growth. www.ecovis.co.jp

Industry experts | Market Entry and Consulting Comprehensive support

“Removing barriers and paving the way into Japan is what we do” Andreas Popper CEO

C

ustomer satisfaction is all about adding value, and we know exactly where our clients need it most. We can resolve intellectual property, regulatory and market entry issues simultaneously in a comprehensive and efficient manner. Through removing such barriers, we have paved the way into Japan for numerous ventures and hundreds of products. We continuously support businesses of multinational enterprises within Japan.

The aim is market entry, but it all starts with strategic branding and sophisticated local protection of intellectual property. Our full range of IP services – trademarks, patents, designs and copyrights – lay the groundwork for foreign businesses in Japan and secure their chances for sustained growth.

Settling IP issues without foresight of regulatory compliance is a dead-end road. Our scientists and lawyers are there at the outset to help marketing and R&D departments meet all requirements of

local regulatory authorities, to register products and acquire necessary licenses.

We conduct analyses, supervise test imports of products, as well as advise on the preparation of compliant labels and marketing material to save clients’ time and cost.

Finally, at the stage when preparations are followed by actions, we provide hands-on support of the venture. Our import and distribution licenses, customs clearance, logistics, and communications for – and with – our clients offer quality assistance every step of the way.

The key to a smooth market entry is seamless coordination and constant overview of the aforementioned three issues.

To local entities seeking international business, we serve as an East-West interface, a communication conduit to our global network of service providers.

In over 100 countries, we offer the entire spectrum of IP services – such as trademark and patent searches and renewals, technical translations and

PCT national-stage filings, trademark watching, and tracking of copyright infringements conducted over the internet. nipponCompass is a Tokyo-based group of service and consulting companies, and law firms providing high-value intellectual property services, guidance in regulatory procedures and all-round market entry support. By linking these three fields, our highly international, multilingual team of experts understands our foreign and local clients’ needs profoundly and supports them with extraordinary and innovative services while guarding the spirit of their businesses and their goals.

nipponCompass | 日本羅針盤 mail@nipponcompass.co.jp www.nipponcompass.co.jp Tel: +81 (0)3 5500 2272

November 2010

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Industry experts | Market Entry and Consulting Competitive edge

PwC Japan provides quality client services as “One Firm”

PwC (PricewaterhouseCoopers) is one of the largest professional firms in the world. The firms of the PwC network provide industry-focused assurance, tax and advisory services to enhance value for clients. More than 161,000 people in 154 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.

PwC Japan (PricewaterhouseCoopers Japan) represents PricewaterhouseCoopers Aarata, PricewaterhouseCoopers Co., Ltd., Zeirishi-Hojin PricewaterhouseCoopers and their subsidiaries. As a professional service firm with a total number of more than 4,000 partners and staff, PwC Japan provides quality client services as “One Firm” to meet their needs and expectations. Each entity is a member firm of the PwC global network in Japan, operating as a separate legal entity.

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To address complex and diversified business challenges, PwC Japan consolidates expertise of assurance, advisory and tax professional services, as well as enhances its structure in order to cooperate organically. By utilising the PwC global network, we offer comprehensive professional services for multiple issues with a view to helping Japanese and foreign companies gain a competitive edge in global markets.

PricewaterhouseCoopers Co., Ltd. is one of the largest consulting firms in Japan, providing deal advisory and business consulting services. The Deal Advisory group, specialising in M&A and business recovery & restructuring, and the Consulting group, engaging in comprehensive services from planning to execution of management strategies, combine their expertise to provide our clients with optimal solutions.

Date of foundation 15 June 1999 Representatives Shiro Uchida, CEO Masataka Mitsuhashi, Executive Vice President Staff About 1,600 (as of 30 June 2010) Offices Tokyo, Nagoya, Osaka www.pwc.com/jp/e/advisory

Industry experts | Market Entry and Consulting Minding your own business

“Ready for the real outside “in-house” solutions?”

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ho your accountant is and what functions are covered can make all the difference.

The finances and the financial position form the spine of each company. Therefore, it is important if your finance team is involved in forming the business and cash flow strategies, forecasts, and budgets. A correctly positioned finance team is what forms the third side of the triangle connecting top management with the rest of the company, or HQ with the local entity.

Taking your pulse Many companies have not reviewed or updated their accounting and general operations – including related policies – for many years, instead relying on their staff’s knowledge. We often confirm that companies lack – or do not follow – some of the standard policies and processes, resulting in misrepresentation of their financial position and increasing their tax compliance and other exposure.

Following the same pattern for years might not mean that everything is fine.

When was the last time you checked your company’s pulse?

Operating as a true customer service organisation There should be no difference in the general definition of customer service between accounting and a hotel or restaurant. Unfortunately, the professional experts – including tax accountants, lawyers, etc. – are often delivering customer service far below the level for which Japan is renowned. Understanding the client’s business, strategy, needs, strengths and particularily weaknesses is an absolute must. This enables not only recording past transactions, but also providing support in forming future strategies, forecasts

and cash flows. Ready for the real outside “in-house” solutions? Today, there is a need for the accountant to be not only the goalkeeper, but one of the players on the management team. Simply put, the more accurately you tell us about you, your business and expectations, the better we can be an active part of your business and pro-actively assist you.

proactively and independently managing all processes and compliance while providing needed understanding and easily accessible visibility and control. We listen and act as partners to our clients. Make a difference is our motto. Like clothes coming out of a washing machine cleaner and smelling nice, we like to add that touch to anything that comes through us.

More than dispatch Hiring dispatched resources has become popular for many companies. Although this provides for flexibility and lower cost compared to consulting, the weaknesses are lower motivation, less loyalty to the project, and an inconsistent approach.

Managing such resources also might be a challenge as they are not employees and therefore often consider themselves more independent. A solution is providing a “project work toolbox” to the resources together with a regular oversight and participation in the main meetings by one of the partners. This solution provides a needed plus to dispatch and adds another pair of eyes to executive management overseeing the project.

Our main coverage: Accounting, tax, HR and other business support services

Marek Lehocky Managing Director ProWorks Group

One stop shop for Professional Finance, HR Resources and Outsourced Tax and Business Support Services ProWorks was founded in 2007 to challenge how professional support services are being provided in Japan. We understand that being bilingual does not mean being global. We do things differently for you.

Our approach is based around communication, understanding of our clients,

One-stop shop: Complete solution for market entry and ongoing outsourced business support services and compliance including company establishment, tax, social and labour compliance, accounting, HR, administration and IT support.

Professional finance and HR resources: more than dispatch Professionals assisting business in projects through periods of growth, change, transition and crisis in the areas of accounting, financial systems, compliance, reporting, internal audit, policy review and drafting, etc.

Business Consulting: from start to finish Solutions from an outline of the strategy and approach through to implementation when required.

For information about our practices, please contact Marek Lehocky at mlehocky@pw-group.co.jp www.pw-group.co.jp

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Industry experts | Market Entry and Consulting The consumer

“Consumers are eating in, staying in, and sleeping in”

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apan’s consumer market is finally bouncing back from the recent economic downturn. But it has yet to fully recover. Traumatized Japanese consumers are still afraid of not having enough in their savings accounts. Many of them are spending as little as possible. When they do spend money, it tends to go toward stay-at-home items rather than on what happens outside the home.

No more socializing at bars and restaurants with coworkers, no going out to amusement parks, and no vacationing in Hawaii or Paris for a week. Consumers are eating in, staying in, and sleeping in. This market behavior is definitely new (and shocking) to Japan, yet some domestic and international companies are finding this a great business Before (Y2005)

opportunity, and a “new” market in Japan. This could be the last nudge towards the market entry you have been long planning.

Here at Hello-Global.com, we provide business development assistance to any foreign company that wants to enter the Japan market. Our focus areas are consumer goods (apparel, cosmetics, etc.), food & beverage, IT, environment, and more. We are a one-stop key service point who can provide you a range of services, from market research, sales channel development, distributor lists, to negotiation, operation, sales force, and more. Our professional staff have proven experience in Japan, the United States, Europe and Asia, and are ready to support your business expansion process quickly and effectively.

Now (Y2010)

Food & Eating habits

Eating out at restaurants Stopping off for a quick beer with coworkers, etc.

Taking a packed lunch to work/school Inviting friends for “home parties”, etc.

Cooking gadgets (home bakery, pancake hotplate, and other home cooking products, etc.)

Apparel/ Shopping

Shopping for high-end brand products

Popularity of low-cost “fast fashion” brands

Entertainment Domestic and international travel, amusement parks, etc.

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Flat screen TV, and other home-oriented products, watching movies on DVD, purchasing DVD recorders, TV games, hand-held gaming products

One of the French companies we have been helping is now signing a technology licensing contract with one of the largest companies in Japan.

Japan’s sales channels are said to be complicated, but the market itself is changing from day to day, reflecting current consumers’ needs and wants and shortening product cycles. HelloGlobal.com can help you understand the market, and show you how business is done in Japan.

Your gateway to Japan business market (Hello-Global) Hello G Co., Ltd. Shibuya, TOKYO 150-0001 JAPAN Tel 03-6438-9821 Fax 03-6438-9823 Skype ID: hello-global http://www.hello-global.com/en/ Consumer’s awareness index for anticipated future living conditions

REFUGEES INTERNATIONAL JAPAN RIJ (国際難民支援会)

With your support

We can help them rebuild their lives and restore human dignity. refugees international Japan funds proJects that support some of the millions Who

have lost everything as a result of conflict around the World.

RIJは、世界中で起こる紛争のためにすべてを失った、何百万という人々の中の一部を支援するプロジェクトに、資金を提 供しています。皆様の支援のお陰で、彼らが人間としての尊厳を回復し、生活を立て直す手助けをすることができます。

tel: 03-5500-3093

WWW.refugeesinternationalJapan.org

PROMOTION

Five mindset trends persistent among Japanese in the noughties

D

uring the noughties, or 2000-2009, Japan witnessed a significant change in the political landscape, from the launch of the LDP’s Koizumi “regulatory reform” administration, to the landmark power shift to the DPJ. In the economy, on top of lingering business slumps, Japan was further hit by the recent global recession, followed by a deepening deflation.

I&S BBDO, the Japanese arm of the global advertising agency network BBDO Worldwide, has conducted the National Consumer Value Research survey since 2001 and compiled Japanese consumer trends during the noughties.

We overviewed how consumers have been leading their lives in this time period and examined their mindset in 2009, a year after the historic global recession. We also have explored the prospects for the next decade.

Japanese have been consistently seeking a “non-materialistic source of reliance” and “monetary security” in their daily lives. And the foundation of people’s lives has been shaken – keeping them in a state of frustration and anxiety. The level of “satisfaction with life” is 51% as the 9-year average. Low was 49% in 2008, and high was 52% in 2001. It was 50% in 2009. Level of “optimism for the year ahead” is 18.7% on average. Low was 18% in 2008 and 2003, and high was 22% in 2005.

Half were not satisfied with their current life, while 80% were not optimistic for the year ahead. Both tendencies persisted throughout 2000-2009. Although materialistic contentment was high, the tendency for low non-materialistic contentment remained unchanged. The global recession brought little change to life values – people continue to seek both “non-materialistic” and “economic” values.

Strongly sensing a business slump, Japanese feel that they have more spare time, while their basic evaluations of life are lower. The amount of spare time serves as an economic barometer. In 2008, the scores for basic life evaluation decreased, except for the item “my life allows for spare time”, which increased. But in 2009, these were reversed – the basic life evaluations increased except for the issue of spare time. These trends are in contrast to the changes in level of life satisfaction, optimism for the year ahead and other life evaluation.

In BBDO’s global survey of 2009, “Trading Up Trading Down”, covering 15 nations, countries other than Japan showed decreasing scores for the level of life satisfaction.

There was also a tendency for economically stronger people to sense a business slump the less they felt their lives

allowed for spare time. A possible reason behind this is that people tend to work longer hours in a business slump, as they are afraid of being laid off. In contrast, when Japanese people sense a business slump, their workloads are decreased and unpaid enforced overtime work is shortened.

This is done to allow Japanese more spare time, in a tendency that contrasts with other countries.

To summarise, the following are the five mindset trends persistent in the noughties as a result of a change in life values: • Desire for stability and security: people focusing on being “average, common and on par”, and avoiding risk of taking up challenges (for globalisation, leadership and other events in life).

• Loss of self-confidence: an increased tendency to avoid efforts entailing strict self-discipline or striving for what is considered unbeatable by others.

• Potential for future: an increased tendency to prepare for the future instead of enjoying the present.

• Return to one’s identity: an increased tendency to value what comprises the “Japanese” identity and “oneself” – such as one’s nationality, birthplace, living habits and rituals, educational background and experience.

• Expectation for a people-friendly, caring society: “gratitude” is chosen as the favourite word for three straight years, underpinning a rising sense to encourage society to be interpersonal and compassionate.

For further details, please visit the website www.isbbdo.co.jp

Masahiro Itagawa, Planning Director Tadafumi Kosaka, Account Planning Director I&S BBDO

EVENT REPORT

An evening with maestro Robert Rÿker équilibre leadership event 30 September 2010, Chanel Nexus Hall Text and photo Tony McNicol

F

all under the spell of Robert Rÿker’s baton. It will change the way you listen and the way you lead,” read the invitation from Richard Collasse, president and representative director of Chanel K.K. The invitation was to a magical evening of music at the Chanel Nexus Hall in Ginza, featuring conductor Robert Rÿker and the 19 strings of the Tokyo Sinfonia. Between pieces

by Debussy, Elgar, Saint-Saëns and Tchaikovsky, the maestro shared his insights on leadership, before chatting with guests at a cocktail reception.

The event was organised by executive coaching and training firm, équilibre, whose president, Philippe Grall, opened the event. He spoke of the need to bring out employees’ (and musicians’) “inner diamond”. And to illustrate that point he had brought a large glass diamond wrapped in a black cloth.

The first piece was “Prélude à l’après-midi d’une faune” by Debussy: “quintessentially French”, as Rÿker put it, so perfect for the Chanel Hall. “Vision” was the first keyword. Rÿker said that his personal vision was “to create an

entire musical universe”.

The second piece, “Introduction and Allegro for Strings” by Elgar, was as English as the first was French. To illustrate the keyword “passion”, Rÿker shared a story from his childhood, how at the age of five he had announced that he wanted to play the bass tuba. That was the start of his passion for music.

Rÿker described how he strives to keep his own musicians passionate today. “Players need opportunities to grow musically and be recognised artistically,” he said. He rotates all the instumentalists in the Sinfonia so that all get an opportunity to be a principal.

The keyword “communication” was matched with “Introduction et Rondo Capriccioso” by another French composer, Saint-Saëns. Rÿker’s communication with his musicians isn’t limited to language, he said, but includes the way he gestures, walks – even how he looks at people.

“In any field there is nothing so uplifting as shining eyes,” added Grall.

Conductors, as much as any leader, want to leave a “legacy”, which was the fourth and final keyword, and accompanied by Tchaikovsky’s “La Chase/Chant d’Automne/Course en Troïka”.

If you were a conductor, what kind of music would your team produce?

Philippe Grall, équilibre

What does Rÿker want his legacy from the Tokyo Sinfonia to be?

One aspect, he explained, are seminars for conductors run by the Sinfonia, from which two participants have already become conducting interns. They conducted the first two Tchaikovsky pieces, then Rÿker the third.

In closing the concert, Grall asked the maestro what the most important part of leadership was. “That’s easy,” said Rÿker, “building your people.”

But Grall also had some questions for the audience: “If you were a conductor, what kind of music would your team produce? Would it be harmonious?

Would they play like one instrument?

Would they be following your interpretation?”

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Text and photos Tony McNicol

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C ulture S hock

At first glance, who’d suspect that Doreen Simmons, a petite 78-year-old Englishwoman, is a veritable giant of the sumo world?

Some years ago, the Tokyo resident became entranced by Japan’s national sport. Since then, she has written hundreds of articles on sumo, commentated in English for 18 years for over 100 tournaments on NHK and acquired a vast repository of knowledge about the ancient sport.

She always loved to study and collect information. “Even as an eight- or nine-year-old, I was fascinated by dinosaurs. I could name every dinosaur that was then known,” she recalls. Later she studied classics followed by theology at Girton College, Cambridge University. The former required Latin and ancient Greek, the latter New Testament Greek and beginner’s Hebrew – only some of the languages she’s picked up in her lifetime.

Her first visit to Japan was for three months in 1968. At the time she had been living with her husband in Singapore and teaching at a British army school. She’d read about sumo, but the trip gave her a chance to see the wrestlers in action, namely the Osaka tournament on television. “I was completely hooked,” she recalls.

Several years later in 1973, she came to live in Japan and immediately started to learn the language.

“Every time I got on the train,” says Simmons, “I memorised the next two stations in kanji [Chinese characters], and revised the ones I already knew. By the end of a month I could navigate myself around central Tokyo.”

She also threw herself into the sumo world and started attending live tournaments. “I got a notebook and the Japanese programme. It took me about an hour to work out that the program was reading from right to left.” Junior officials were a

wrestlers must be able to take some pain

useful source of information, and happy to be quizzed on the finer points of sumo. Some 30 years later some are still good friends.

Simmons still remembers the first time she visited a sumo stable.

“I noticed there was this bamboo stick,” she recalls. “And I noticed two of the young wrestlers with what looked like ladders on their backs and legs … the stable-master had been whacking them down, and the stick had left red welts.”

Later she understood better. “It’s a contact sport with two unprotected men crashing into each other,” says Simmons. “Of course, sticks are banned now, but wrestlers must still be able to take some pain, just as they have to be able to take the cold in the winter and the heat of the summer.”

In July 1982 the state broadcaster NHK started its satellite Englishlanguage sumo commentaries and Simmons came on board one tournament later. Today she is well known as a sumo expert, but that wasn’t the case then. “We commentators were supposed only to reply if one of the play-by-play men asked us a question,” she recalls.

“But they didn’t know the questions to ask.” Feisty Simmons still chipped in with the occasional observation or nugget of information. “I got a very bad name in the early days,” she remembers with a smile.

For 32 years Simmons has been a member of the koenkai supporters club of the stable opposite her apartment. One of the privileges of membership is visiting training sessions.

“If it’s a serious session, with some interesting people there, I will be making a note of who faces whom, how many times that person can beat that one, and how many bouts each one’s had,” she says.

She has seen plenty of changes to sumo since she became a fan, including the introduction of non-Japanese wrestlers. However, she’d prefer not to use the word “internationalisation”.

“The foreigners have to join a stable and do things the Japanese way. So it’s not the

internationalisation of sumo,” she argues. “It’s got to be the ‘Japanisation’ of each foreigner, even if he doesn’t buy into it wholly.

He’s got to be able to speak the language, make the right bows, do the cleaning.”

Nevertheless, the influence of Mongolian wrestlers, in particular, has changed and benefited sumo, says Simmons. “It’s thanks to the Mongolians that wrestlers stopped getting bigger and bigger,” she notes. “The Japanese were simply putting on weight because it had always worked. It was the Mongolians who brought back the agile-man’s sumo.”

Simmons isn’t particularly interested in other calls for change.

“I used to be a raving cricket fan,” she says. “In the same way now as I am with sumo. I knew the laws of cricket by heart, I played cricket twice a week in my own time and occasionally umpired.

“I have absolutely no interest in it now,” she says. “One-day matches, coloured uniforms, advertising on the bats, even on the stumps. To me it’s not cricket. Something has permanently been lost. I don’t want to see that happening in sumo.

“Modernisation is what they’ve been doing for years and years and years, but only a little bit at a time,” she notes. “I mean, what would you modernise it to?”

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Luciano and Thierry Cohen Japan Europe Trading Text Julian Ryall Photo Tony mcnicol Luciano: I’ve been involved with organisations for European business people here since the European Union opened an embassy in Japan in the late 1970s.

The ambassador at that time really knew very little about Japan and the problems that we faced, so he approached a number of Europeans who had been here for some time. I was still working for Olivetti of Japan, but he was very keen to get information about what the embassy could do to improve things here for us and that was the start of the liaison committee.

That turned into the EBC a few years later. We started a number of schemes, one of which was teaching Japanese to young European executives, which continues to this day. At that time, the number of barriers on imports was incredible, in particular on wine and liquor.

The EBC had to work very hard on that issue, in particular. We commissioned a study on the barriers, why they were in place and what could be done about them. We submitted that to the European Commission, it went all the way to the World Trade Organisation and their decision was that Japan was effectively stopping imports. A bottle of good wine at that time was around ¥30,000. The cheapest cognac was ¥15,000 a bottle – and that was the cheapest. Tariffs today, in comparison, are very reasonable.

Thierry: Our company specialises in importing high-end Italian food products and alcoholic beverages, and has grown to a staff of 92 and six offices across Japan. There are many reasons why Italian cuisine is popular here, but I think the key one is that Japanese and Italian food are quite similar. Japan has a long tradition of eating raw fish, which is also popular in southern Italy, while in Japan there are noodles and in Italy we have pasta.

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The other reason Italian food became big in restaurants in Japan is because costs are very important. A pasta lunch has a very high margin because the pasta will cost ¥50, add a tomato-based sauce and it’s still a very inexpensive meal. It’s also easy to prepare, which keeps personnel costs low. The standard of Italian food here is also high because there are so many restaurants in Japan; they have to be good to survive the competition.

Luciano: Italians who visit Japan say they have never had such high-quality Italian food anywhere in the world outside Italy. Nevertheless, I think the main challenge for our business is that people are trying to spend less than they used to and it’s a question of cost. There is this new tendency to select the third most expensive wine instead of the most pricey one.

In many restaurants here, wine is not considered to be important. The waiter will come to the table and ask which wine you would like even before you have looked at the menu and decided what you want to eat.

Thierry: To promote our products, we arrange lots of cultural events and three years ago started the first Italian sommelier competition, specifically for Italian wines. We have 250 entrants each year. We also run one-day courses for sommeliers who want to learn about Italian wines; Japanese love to learn.

We have recently published a book in Japanese on Italian wines with recommendations by top sommeliers of the best drinks to go with the most appropriate everyday Japanese meals.

The basic concept is that Italian wine matches all kinds of home cooking because Italy has more than 200 varieties of grapes and is number one in the world in the sheer number and variety of wines.

Luciano: The EBC needs to continue looking at the barriers and problems that exist. They need to continue to fight on all theses issues. Very often embassies do not know all the issues that exist, but businessmen do because those are their daily problems.

Thierry: Yes, there are still a lot of barriers today that the EBC needs to work on. The laws on imported hams and listeria content, for example. These are outdated rules that make absolutely no sense to anyone who knows about listeria. It exists in sashimi and there are no rules on that. These barriers are keeping out some of Italy’s most famous brands.

We are selling prosciutto here and have been fine for four years but we don’t promote it because eventually there is a good chance that the authorities will find listeria and it will be banned. At the same time, there is Japanese ham on the market here that has been cured for two weeks; our products have been cured for 14 months.

Wine prices have been going down because of volume, but at the cheaper end of the market – a bottle of around ¥1,000 – the tax is 100%. In the EU, that bottle would cost around €3 or €4. That’s a barrier. There is still a lot for the EBC to do and we are very happy that they are so active – but it is very difficult to get things changed.

T alking E U R O bi Z

Luciano Cohen (82)

Thierry Cohen (47) 3 President, Japan Europe Trading 3 Italian 3 Speaks Italian, Japanese, English and French 3 Business career highlight: Lighting up the Mori Tower in Tokyo in the colours of the Italian flag to mark the launch of our 2007 “Italia Primavera” event 3 Favourite saying: Kill two birds with one stone (In Italian, “catch two pigeons with one fava bean”)

3 Chairman, Japan Europe Trading 3 Italian 3 Speaks Italian, Japanese, English and French 3 Business career highlight: President and Representative Director Olivetti Corporation of Japan 3 Favourite saying: Nothing is impossible, it may just take a little longer

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Not a pot noodle Photos and text Jeremy Sutton-Hibbert

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L ens F lair

Up an anonymous flight of stairs in Ginza was a dinner date in the most exclusive restaurant in Japan, an intimate space a world away from the bustle of the modern city outside. The idiosyncratic Mibu restaurant is run by Hiroshi Ishida, who serves his famed eight-course meals only to the restaurant’s 250 exclusive members and their guests. There is no casual booking system, and the chance of becoming a member is slim – you await the death of an existing member before moving up the queue.

But any wait is worth it to taste the exquisite food prepared by Ishida-san and served by his wife Tomiko, food which brought tears to the eyes of acclaimed chefs Heston Blumenthal and Ferran Adrià, who both called it their “favourite restaurant in the world”.

Ishida-san offered us fare such as udo edible plant with kinome and azalea, sillaginoid fish and buds of Japanese angelica tree fried into a light tempura, followed by flowering ferns.

Accompanying these dainties was hot water flavoured with flag iris leaves and arrowroot mochi. A pot noodle it wasn’t, an unforgettable meal it was.

See all the photographs at www.eurobiz.jp

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Special advertising section // Relocation services in Japan Asian Tigers Premier Worldwide Movers

Time to Say Goodbye Again?

Address

Nakata Mac Toranomon Bldg. 6F, 1-1-10 Atago, Minato-ku Tokyo 105-0002

Tel

03-6402-2371

Fax

03-6402-2305

E-mail

sales@asiantigers-japan.com

Web site

www.asiantigers-japan.com

Asian Tigers Premier Worldwide Movers specialises in professional packing and forwarding of office and household goods shipments. We offer secure warehouse and storage services. Full Relocation services are available through Asian Tigers Mobility.

With offices throughout Asia, we are also shareholders of OMNI – Overseas Moving Network International – comprising carefully selected companies in over 70 countries. We are a member of FIDI – Federation of International Furniture Removers – comprising 600 companies in over 100 countries who adhere to stringent criteria. Such an affiliation allows us to choose the best partners for any destination, providing our clients access to the best quality-conscious moving companies.

We pride ourselves on being a trusted and reliable service provider to multinational companies and government organisations moving personnel to and from Japan. Our operational personnel are experienced in handling any specific requirements for a successful international move.

Please contact us for a no-obligation free estimate and more information about our services.

Econoship

Address

974 Aza Nosoko, Ishigaki 907-0333

Tel

0120-222-111 or 0980-892-111

Fax

0980-845-053

E-mail

info@econoship.net

Web site

www.econoship.net

Econoship has been in the business of transporting personal and commercial goods from Japan to the rest of the world since 1979.

Over the past three decades, the company has built a solid reputation for extremely courteous, efficient and reliable service. Econoship has strong relationships with trucking companies, storage facilities, packing agencies, customs brokers, and shipping lines serving countries around the world. No matter where you are going, or when you are planning to leave, Econoship can make your move a much more pleasant experience.

Our services include free estimates, free on-site surveys, door-towarehouse or door-to-door shipping to more than 300 destinations, free pickup service, packing and crating, and storage at very reasonable rates.

We also offer special discounts for large shipments of five cubic meters or more. You can count on Econoship to help you make the right decisions about the details of your move, every step of the way.

For real peace of mind, move with the best. Move with Econoship!

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November 2010

Address

No. 2 AB Building, 6th Floor , 1-17 Roppongi, 3-chome, Minato-ku

Tel

03-3589-6666

Fax

03-3589-0420

E-mail

santafe@santafejapan.co.jp

Web site

www.santaferelo.com

Santa Fe Relocation Services is a leading relocation company operating throughout Asia, providing high-quality relocation services to individual and corporate clients. As a full-scale relocations services provider, Santa Fe provides home and school search, tenancy management, familiarisation programs, settling-in assistance, visa and immigration services, household-goods moving and much more. Each year Santa Fe handles in excess of 10,000 relocations throughout the world, and is proud to be a major player in the global relocation industry.

For all your relocation needs, Santa Fe can cover the world. As an Asian specialist, we stick to one simple philosophy in delivering services globally: create and maintain partnerships with the best providers outside of Asia. We know who the best partners are – which is one of our greatest strengths – and our clients benefit from their proven quality.

Santa Fe owes much of its success to our focus and dedication to quality, and is firmly committed to the ISO and FAIM standards. We are recognized as the industry leader in terms of our investment and commitment to quality systems across all service areas.

The mission of Santa Fe is simple: To provide premium relocation service to corporations and families in a manner that minimises the negative impact on the environment.

Allied Pickfords Japan

Tel

03-5549-6200

Fax

03-5549-6201

Web site

www.alliedpickfords.co.jp

At Allied Pickfords, we understand that you are not just moving your belongings from one place to another. Your life is changing before your very eyes. And, with everything you have to think about during your upcoming relocation, you shouldn’t have to worry about the move itself.

Moving over 1,000 families every day in more than 175 countries, Allied is the largest, most recognized moving company in the world; and our experience and expertise will help you get through your move with the minimum of disruption. With local offices in both Tokyo and Kobe, our combination of highly skilled multilingual local and expatriate staff, supported by English-speaking move supervisors and trained packers ensures a trouble-free relocation, whether you are moving domestically or internationally. So relax a little! Let us help reduce the stress of relocating your life.

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Special advertising section // Relocation services in Japan

Santa Fe Relocation Services

PROMOTION

Reinventing the Japanese Company Creating an office culture that nurtures international talent

A

sia’s economy is coming of age. The growth in the Asia-Pacific market is beginning to reflect the huge potential many had placed on this region. Companies that had gambled on operations in high-growth markets like China, South Korea and Thailand are now well positioned for the anticipated growth ahead. As an example, Robert Walters’ Asia-Pacific expansion alone accounted for over 41% of its global net income in 2009 – an increase of over 15% since 2000. Moreover, the Asia Job Index that Robert Walters released last month revealed an 86% increase in the total jobs advertised over the first half of this year in major Asian hubs compared to 2009. For Robert Walters and many other global firms, the growing Asian influence has been attributed to the entry of new markets onto the world stage.

But as emerging markets such as China and those in Southeast Asia continue to progress, mature economies like Japan have had to find alternative means to stay competitive. One strategy which has proved effective has been the internationalisation of Japanese business.

Though recent growth in Japan has not been as rapid as that of its neighbours, observers are still cautiously optimistic about Japan’s steady progress. Unlike some of the other countries in the region, Japan’s strategy has remained that of a reliable, sustained growth structure.

The national stability has afforded many Japanese companies the ability to leverage the strong yen to acquire foreign assets – thus gaining a foothold into global

Japan: Job Advertisements for Professional Positions Placed in Both Print and Online Media, 2009–2010

markets. This scenario was brought to the forefront recently with high-profile examples such as the ability of domestically focused Japanese banks to purchase large majorities of foreign assets.

What many Japanese banks faced during these acquisitions, however, was the challenge of retaining key staff, both existing and newly acquired, to keep their business operations running smoothly.

One common issue during these transition periods was the integration of legacy staff into a company’s already established corporate structure. Often differing quite substantially were the remuneration schemes for salaries and bonuses. A few recently merged institutions have offered legacy employees salary and bonus structures similar to what had been in place at their previous companies. This decision has allowed their new employers

to preserve two crucial assets from the legacy staff: global client contacts and the experience necessary to internationalise their business.

According to Managing Director David Swan of Robert Walters Japan and Korea: “For companies looking to internationalise, you need to create the kind of environment internally that internationally minded staff will want to join and work for. That means accepting and appreciating different viewpoints, cultures and gender – and background differences – and offering genuine career progression opportunities to all based on performance.

“I know these are much easier said than done, but it has to at least start from an intention.” ● Ambrose Lau, Editorial Specialist

About Robert Walters Robert Walters Tokyo t: +81 (0)3 4570 1500 e: tokyo@robertwalters.co.jp Robert Walters Osaka t: +81 (0)6 4560 3100 e: osaka@robertwalters.co.jp

Robert Walters is one of the world’s leading specialist professional recruitment consultancies with 42 offices spanning 20 countries. In Japan, Robert Walters recruits out of its offices based in Tokyo and Osaka for permanent and contract positions. www.robertwalters.com

events

Upcoming events Austrian Business Council www.abc-jpn.org

Austria wine tasting 30 November, Tuesday, from 19:00 Venue: Conrad Tokyo, 2F, Kazanami Hall Fee: ¥2,000 Contact: www.abc-jpn.org

Belgian-Luxembourg Chamber of Commerce in Japan www.blccj.or.jp

BLCCJ gala 24 November, Wednesday, from 19:00 Venue: Hilton Tokyo, Shinjuku Fee: please contact for details Contact: info@blccj.or.jp

British Chamber of Commerce in Japan www.bccjapan.com

16 November, Tuesday, 17:00-21:00 Speakers: Jan Kaiser & Georg Schleithoff, Ernst & Young Japan.

Venue: GCCIJ Fee: ¥5,250 (members), ¥8,400 (non-members) Contact: events@dihkj.or.jp

Italian Chamber of Commerce in Japan www.iccj.or.jp

ICCJ gala dinner & concert 14 December, Tuesday, from 19:00 Venue: The Westin Tokyo, Ebisu Fee: ¥20,000 (members), ¥22,000 (non-members) Contact: iccj@iccj.or.jp

Netherlands Chamber of Commerce in Japan

2010 Deshima business awards

19 November, Friday, 16:00-19:30 Presenter: Bernhard Wientjes, chairman, Confederation of Netherlands Industry for Employers 24 November, Wednesday, 08:00-09:30 Venue: TEPIA, Kita Aoyama Speaker: Willie Walsh, CEO Fee: no charge Venue: Hilton Tokyo, 3F, Yamato room Fee: ¥5,500 (members), ¥6,500 (non-members) Contact: nccj@nccj.jp Contact: info@bccjapan.com

www.fcc.or.jp/

FCCJ Christmas luncheon 9 December, Thursday, 12:00-14:00 Venue: Embassy of Finland Fee: ¥7,000 Contact: fccj@gol.com

French Chamber of Commerce and Industry in Japan

30 November, Tuesday, 19:00-21:00 Speakers: Tomra, Coca-Cola Japan Venue: Royal Norwegian Embassy, Arctic Hall Fee: ¥3,000 Contact: contact@nccj.or.jp

www.sccj.org

Update & outlook: German accounting

law modernization act & International financial reporting standards

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17 November, Wednesday, 18:30-20:30 Venue: Oakwood Premier Tokyo Midtown Joint Nordic chambers event: Challenges Fee: No cover charge and opportunities for sustainable growth in Japan Contact: sccij@gol.com

Soirée de gala

www.japan.ahk.de/en

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www.nccj.or.jp

Swedish Chamber of Commerce and Industry in Japan

German Chamber of Commerce and Industry in Japan

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Norwegian Chamber of Commerce in Japan

www.ccifj.or.jp

15 November, Monday, 18:30-22:30 Venue: ANA InterContinental Tokyo Fee: ¥35,000 (members) Contact: Toru Moriyama, 03-3288-9633, pub@ccifj.or.jp

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http://nccj.jp

Breakfast meeting: British Airways moving forward

Finnish Chamber of Commerce in Japan

NOVEMBER

Club evening 16 November, Tuesday, 18:30-20:30 Venue: Restaurant Stockholm, Akasaka Fee: ¥4,000 Contact: office@sccj.org

Swiss Chamber of Commerce and Industry in Japan www.sccij.jp

Joint networking event with GCCIJ & ABC

Swiss Christmas party 2010 26 November, Friday, 18:00 doors open Venue: Hilton Tokyo, Nishi-Shinjuku Fee: ¥10,000 Contact: sccij@gol.com

Scandinavian Christmas party 2010 3 December, Friday, 18:30-24:00 Venue: Happo-en, Shirogane Fee: ¥18,000 Contact: office@sccj.org

Japan summit 2010

Generation change in Japan: New leaders, new outlook 16 December, Thursday, 09:00-17:30 Venue: Hotel New Otani Tokyo Fee and contact: www.economistconferences. asia/event/japan-summit-2010

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W ork P lace

Wolfgang J. Angyal President, Riedel Japan Wine glass company Riedel has six outlets in Japan, more than in any other country. “Wine tastes and smells differently depending on the glass it’s in – and the right shape makes a glass an instrument for enjoying wine.”

Photo Tony McNicol

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November 2010