Field Theory by Hadyn Green


Japan Part Two: It's business time

So one night New Zealand's next top Model was on the television. The guy who takes the girls on their challenges was lambasting the potential top models for doing poorly in a quiz about fashion and how none of the girls knew the four fashion capitals of the world. Nearly every single girl said that one of the fashion capitals was Tokyo. Very few mentioned Milan.

It struck me as odd that you would penalise someone from an island in the pacific for being more attached to fashion from the largest city in the pacific (and for some metrics the largest in the world). A city known for amazing design and for its particular style. A city whose Ginza shopping district is as well-known as any in Italy.

Who knew Asia was more than just a place to buy cheap electronics and eat weird food?


Tokyo is a three dimensional city whose axes have positive and negative values. Trains roar above your head and glide somewhere beneath your feet. Thousands of people walk with you on the footpath and the same numbers move underground and through the air on overpasses. Until Google Maps starts showing you the underground, Tokyo will remain impenetrable to the satellites.

The buildings in the shopping districts don't limit themselves to the street frontage. Looking up you'll most of the shops are above you sometimes going up six floors or more. Want to find that cool little store that sells robot parts? Look up.

But the underground walkways really screwed me up. I use a lot of visual cues and landmarks to orient myself when walking in a new city. I pride myself on how quickly I can figure my way around a place after only a short time. So when I go underground I have no concept of how far I've walked with respect to landmarks aboveground, and no other clues like the sun (don't laugh, it's useful!), so I get hopelessly disoriented.

Most of these subterranean walkways are like streets, lined with small shops and eateries. Some are the basement levels of department stores, and there are odd occasions where you walk can walk out of one store and directly into another.

Thousands of stores that never see daylight. And these aren’t crap stores either. Some were very upmarket boutiques; others would be the only place in Tokyo that you could purchase a particular brand. We spent a few hours underground in Shinjuku trying to find a small beer store that sold a particular Japanese brand (more on that later).

Many of the shops were branded and looked as though they were part of a franchise, though I rarely saw another like it. I wonder if the Japanese prefer buying from places they think are already popular, and so there are tricks to making yourself look established.

Tokyo has no topographical zero-point. The city is filled with undulating hills, but these are masked by the buildings. Sometimes you’ll think that you’re on the ground floor only to find yourself three storeys in the air on some rooftop terrace. The effect is pleasantly disorienting. As is the thrill of discovering exactly what you were looking for three storeys underground or ten storeys in the air.

Business in Japan

The best thing about Japan for New Zealand, from a business perspective, is that Japan is just so darn big; so even a small share in the market is a big number of customers. The trick is getting in to the market in the first place.

The Japanese like to be introduced; this is why business cards are the most important business tool you can have. The middle man is king, he is a guy who knows people, and much like the “made man” scene in Donnie Brasco, he will introduce you to the contacts you need with a “he’s a friend of mine” type of code.

But getting your product to Japan is expensive, especially if you export a very heavy and potentially fragile item like beer.

Tuatara, a brewery based in Waikanae, had already entered the Chinese market and wanted to try their luck in Japan. Dave from Tuatara grabbed Dominic Kelly from Hashigozake and entered the 2010 Yokohama Beerfest (I wrote this part of the story up for my Fishhead column [plugplug], so I won't repeat it here, though I will talk about my beer drinking adventures a bit further down).

Before meeting up with Dave and Dom I got the chance to sit down with New Zealand’s ambassador to Japan, Ian Kennedy. Kennedy is a soft spoken man but well worth listening to when it comes to trading with Japan.

[Audio at the top of the page]

The interview (I'm the one who stutters questions, the third voice is Kevin Hadfield the Public Affairs Officer), is a fairly beer-centric conversation as we were discussing Tuatara as an example, but the message is the same for any business looking to enter the market.

Kennedy also spoke a lot about how New Zealand's agricultural and dairy industries are complimentary to Japan's. We have different growing seasons for a start and neither country works in the more "sensitive" markets of the other (for example we're not big on rice). Kennedy suggested that there is little reason that a free trade agreement doesn't exist between New Zealand and Japan, and that the two countries could work together to push into China, obviously the biggest market.

On the other hand, one of New Zealand's biggest companies is doing very well in Japan: Fonterra. But not with milk, the Japanese don't really "do" milk, but they love cheese and they have it on everything. We even bought a bag a of "cheese caramels" (yes, they were weird). But Fonterra doesn't have to import all its dairy products because Japan has its own dairy production and Fonterra work well with the local producers.

Large Japanese businesses have respect for other large businesses. Yet they don't seem to have the ruthless evil attitudes of American-style corporations. I was talking to some small brewers about Kirin, one of the world's largest beverage companies and owner of our own Lion Nathan, and they noted that Kirin owned a small Australian brewer called Little Creatures.

The story goes that Kirin buys the company and then sends its brewers to learn how the company made its beer. So no absorbing and assimilating a company, more an acquisition and then observation, although the final step is improvement. The Japanese have real respect for craftsmanship, they love to buy things that are well made. And so companies are always looking to improve what they are doing, to become greater at their craft.

The respect for other businesses goes beyond that too. I spoke with one New Zealand businessman who was dealing with a large Japanese firm that was going through some financial strife. He was told not to worry and that their deal would still happen and the work would still be done. As he left the meeting he turned to his assistant and asked: "Did I just get told 'She'll be right'?" The assistant shook his head and said: "No, you were just told that it will happen".

Your word is your bond even in corporate Japan.

The elephant in the room is a whale

Near the end of the interview with Ian Kennedy I casually dropped whaling into the conversation when asking about how the two countries got along. I assumed the mention had been ignored when it wasn't addressed directly. But later Kennedy brought it up:

[The interview is on this other page, sorry]

And Kevin is right, the whale market is shrinking.

What I left out of the interview

The interview with Ian Kennedy was in the evening and I totally forgot that I needed to be buzzed in. I had left my phone with Amy, so while I had a Japanese pre-paid phone, I didn't have the contact details to call for someone to let me in.

So I stood in the road outside the embassy (maybe 200m from where I watched the Bledisloe Cup with George Gregan) trying to gain the attention of a woman sitting at her desk who could see me if she had just turned her  head a little. Three times the cycling patrolmen of the embassy district passed me with suspicious glances, yet no offer of assistance. On the other hand, I was not detained for suspicious activities either.

An embassy worker out walking his dog finally helped me. But it was not the best start to my first formal interview.

Image problem

New Zealand is sold to Japan as pretty countryside. A place you can pat sheep. You land in Christchurch and go see mountains. Or maybe you land in Auckland and take a day trip south to Rotorua, maybe. Then you leave. It's short, sharp and very scenery-based.

Japan is marketed to New Zealanders as a place to go and see temples, Buddhas, geishas, and cherry blossoms. Sure you may land in Tokyo or Osaka, two mega-cities filled with the most amazing sights, smells, and sounds. But you'll probably instantly catch a train to Kyoto.

And that's cool, Kyoto's a nice place. But as limited as it feels for us to advertise based solely on countryside; to market Japan as a place of serenity and meditation doesn't even scrape the surface of what it has to offer.

Ed Overy, General Manager of Air New Zealand for Japan, called Japan a "one-day destination" for most people; as in you'll get there one day. And how do you advertise a destination like Japan? Because frankly there are a lot of temples. Even in the middle of Akihabara's electric district there are temples.

If you walk straight out of Harajuku station you walk directly into the bustling, tourist-filled shopping district. Hang a right instead and you're walking straight into Yoyogi Park and the Meiji Shrine. The new and the old aren't separated in Japan. The women in kimono walk through the busiest streets and stations without a sideways glace from anyone (well, maybe the tourists).

This is why I liked Lost in Translation, it showed what you really do in Japan. During the day you wander the streets being amazed by everything you see, and then at night you sing karaoke in a box ten stories above the street. Perhaps Air New Zealand needs to take footage from that film and slap a logo at the end.

The economy and the Salaryman

Here's a few quick anecdotes about Japanese businessmen that I heard while talking with various New Zealanders currently doing business in Japan.

Name cards, or as we call them "business cards", are the most important thing in the world. Upon meeting a person for the first time you exchange cards by holding it out with two hands while bowing slightly (or just nodding if it's a casual meeting). But you only exchange cards at the first meeting, so one of the kiwis I spoke to used that as a way to remember if he had met the person before.

At the second day of the Tokyo Game Show (6-part write up here) I forgot my cards. The woman at the Microsoft booth looked at me, shook her head and just said: "This is JAPAN".

With the recent worldwide economic problems and Japan's own economic long term economy woes, suddenly companies, that used to offer jobs for life, have to fire employees. You notice it after a while, the men in suits wandering the streets with nothing to do. Or hanging out in parks sitting in the shade.

Some of the bigger parks have glades of trees, inside of which are small tent villages. Immaculately kept and even with swept "front yards" the police politely tolerated these communes of jobless salarymen as long as they kept to themselves and didn't beg or otherwise bother the public.

While sitting at an outside café interviewing Ed Overy we were approached by a man in a grey suit who asked for money. Ed has lived in Japan for a while now and was surprised as this was the first time it had happened to him, especially in a country with a growing population of jobless and homeless. However, we had been approached only the day before by a man who wanted to help us at the subway ticket machine, a machine we knew very well how to use. I thought that maybe the man was just annoyingly helpful, but as our change tumbled out he said how hungry he was and he asked politely for our coins. He got them.

Ed told us how he had heard of salarymen who had lost their jobs but hadn't told their families. So every morning they would get up, and get ready for "work" and walk out the door like nothing had changed. Ed also talked about a phenomenon of divorce at retirement, where marriages that were a good arrangement while the husband (yes, nearly always the husband because of Japan's still very male-centric society) is employed simply end when he retires.

Another New Zealander doing business in Japan said how he was relaxing with a group of Japanese businessmen and the topic of sleeping arrangements at home came up. Of the group of six, two slept in the same bed as their wife (including the NZer), two slept in the same room but in different beds, and the last two slept in different rooms. Unsurprisingly Japan has a very low birth rate (1.36 in 2007) and always seem to end up at the bottom of sex-frequency surveys (34% have sex weekly and only 15% are satisfied).

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