February 2009 |
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This issue home | Past issues | MTBC home MTBC, partnering with the Japan External Trade Organization, organized the 2nd Annual Japan Business Seminar on November 18, 2008 featuring three speakers who discussed the secrets of success in Japan’s IT market. Benefits of doing business in JapanIn the world’s second largest market, sophisticated consumers in Japan have buying power, said Senior Manager Yasuhiro Mimura at JAFCO Co. Ltd., one of the major venture capital companies in Tokyo. Demand for advanced technology products and services, adapted to the Japanese market, are extremely robust. The U.S. and Japan are linked politically and economically and Japan observes international standards of business ethics and respects intellectual property rights. One of the best times to set up an office in Japan is after having a sufficient number of clients, customers or partners in Japan to provide support services, or after winning one or more large contracts. “When ten percent of a company’s worldwide revenue comes from the Japanese market, or it becomes necessary to improve the quality and speed of support service for one’s partners, that’s the time to open an office in Japan” according to Mimura. “Even though cost is an important factor for sales, if the service is good, customers will buy it.” Tech “Hot Spots” in JapanJAFCO Ventures in Palo Alto, California is targeting a number of areas in the U.S. and Japan with a special emphasis on Social Networking Services (SNS), Mobile, Business Intelligence (BI) technologies, that includes data, and Cloud Computing. Cloud Computing can be divided into three categories, SaaS, PaaS, and HaaS: “Software,” “Platform,” and “Hardware” as-a-service. Mobile phone users comprise the majority of the SNS market in Japan and the majority of users will be mobile rather than PCs. JAFCO traditionally invests in seven to 8 companies each year, selecting from among over 400 candidates. According to Chief Architect John Gordon with Devicescape Software in San Bruno, California, his firm is a leading provider of WiFi security and connectivity software for handsets. For his business, which opened an office in Japan in 2004, software customization is needed and there is continued growth in WiFi as it is being integrated into more and more mobile devices. “Easy WiFi” enables automated access to public hotspots even from browserless devices. Japanese firm Buffalo, a key contributor to WiFi Protected Set-up in Japan, chose Devicescape to help simplify WiFi set-up, and Epson, Fijitsu and Brother have chosen Devicescape to add CCX compatibility to their devices. Customers in Japan expect wireless connectivity, and Japanese companies are leading the way by adding WiFi to projectors, DVRs, TVs, cameras, games, and media players, and Sony was innovative with a WiFi device in its “mylo.” Gordon, whose firm received funding from JAFCO Ventures, reported his business model was direct sales only rather than using distributors, and that having an office in Japan was essential for working with large companies. Even though affordable office space might be difficult to locate in Tokyo, Gordon’s firm utilized the complementary office space at JETRO’s Business Support Center in Tokyo. Gordon also took advantage of JETRO’s consultation service and legal support for setting up an office to minimize costs and time. Makoto Abe, Principal with Japan Business Solutions in Palo Alto, California, addressed the Japanese ICT market by featuring topics such as wireless, cellular services, network, SaaS, and Next-Generation Network (NGN). His overview estimated the Japanese ICT market in 2009 at almost $132 billion with an annual growth rate of about 2.4%. In this figure, hardware accounted for about 40%; software for 20%; and the remaining 40% was for custom application software systems development. For cellular services beginning in 2010, NTT DoCoMo will begin Long-Term Evolution (LTE) 3.9G service in Japan called “Super 3G.” In 2011, DoCoMo, KDDI and SoftBank all plan to start providing International Mobile Telecommunication-Advanced (IMT-A). Mobile solutions are expected to increase from $1.8 billion in 2006 to $7.1 billion in 2012 and strong security solutions are required. The SaaS market in Japan will increase from $1 billion in 2007 to $7.7 billion in 2012. And, NGN can transport all voice, data, and other media, such as video images, through wired and wireless, fixed and mobile networks. Selecting a partner in JapanWhen selecting a company to partner with in Japan, one should look for both Japanese- and English-language fluency and be aware that potential partners may be cautious in accepting appointments or discussing sensitive company policies. Sometimes foreign business executives may not be aware that Japanese organizations generally have an intricate decision-making process and that the organization may have layers or levels of approval. Also, hiring staff that can help with translations is essential. To generate a channel strategy, determining which companies should be master and secondary distributors, and which partners have the most and key customers in the target market, it might be best to work with professionals who understand the business structure, market size, shares and trends and evaluate companies in terms of revenue, resources, skills and reputation. To effectively utilize Japanese partners, it is not enough just to find the right company. A good relationship needs to be maintained when promoting products and services by educating one’s partners about the best features for the products and the most effective selling points to devise a strong sales pitch. Information must be shared to be sure both partners are on the “right track” and have ongoing communication to generate new ideas, i.e. bi-weekly video or teleconferences. Utilizing a partner’s human resources and networks helps expand the customer’s base and the sales channel. JETRO servicesJETRO-Houston, a catalyst for opening an office in Japan or investing in Japan, can be a part of a company’s strategic business plan and a ready resource for doing business with Japan. JETRO offers a number of complementary business development services for U.S. companies that are planning to partner with Japanese companies or opening an office in Japan. JETRO has a network with leading Japanese companies and hosts a “BizMatch” program that schedules pre-arranged business meetings with Japanese companies at major trade shows. JETRO offers free consultation on tax, accounting and legal issues and helps with office registration in Japan. One of its major initiatives for companies is to provide free office space for up to fifty business days in six major Japanese metropolitan. Assistance at these “Business Support Centers” includes referrals to bilingual specialists and other resources. To request copies of the seminar’s PowerPoint presentations or for help in setting up an office in Japan, please contact JETRO-Houston’s Director of Business Development, Ms. Kaoru Kurita, via e-mail at Kaoru_Kurita@jetro.go.jp or fax her at 713-759-9210. About JETROEstablished in 1958, the Japan External Trade Organization (JETRO) is a non-profit, quasi-governmental organization headquartered in Tokyo that supports mutually beneficial trade and investment relations between Japan and other countries. JETRO assists small- and medium-sized companies expand their business to Japan and encourages direct investment. JETRO cooperates closely with state and local economic development agencies and industrial and trade organizations that seek to do business in Japan. JETRO, headquartered in Tokyo, has six offices in the U.S., 38 in Japan, and 73 offices overseas in 54 countries. Go to http://www.jetro.org for more information. Seminar cooperating organizationsJETRO-Houston and the Metroplex Technology Business Council were joined by the AeA Texas Council; City of Dallas, Office of Economic Development; Dallas Regional Chamber; Ft. Worth Chamber of Commerce; Global Semiconductor Alliance; Greater Irving/Las Colinas Chamber of Commerce; Japan-America Society of Dallas/Fort Worth; North Texas Global Telecommunications Society; U.S. Department of Commerce – North Texas U.S. Export Assistance Center; and the World Affairs Council of Dallas/Fort Worth. About JAFCO VenturesFounded in 1973, headquartered in Tokyo with a branch in Palo Alto, JAFCO is a Venture Capital firm that primarily invests in the IT sector but has a goal to expand its portfolio in the U.S. It has invested in 3,383 companies, including 615 overseas, and facilitated the IPO of 842 companies, including 159 overseas. JAFCO invests in early-expansion or middle-stage technology companies within the communications, semiconductor, software and IT service sectors. Italso provides services for established companies in the middle and later stages of growth and has a dedicated team for business development support in Asia. Please visit www.jafco.co.jp to know more about its services. About DevicescapeDevicescape provides WiFi connectivity solutions for embedded devices at home, in the workplace and for public networks, such as hotspots and municipal networks. The company’s solutions make adding a device to a home or enterprise network effortless and its software supports devices ranging from mobile phones and game systems to industrial sensors and scanners and even office printers and projectors. Go to www.devicescape.com for additional background. About Japan Business SolutionsJapan Business Solutions helps U.S. and Japanese companies conduct business with each other through technological alliances and other forms of partnerships. It’s Principal, Makoto Abe, has a background in semiconductor sales and marketing for Sunnyvale-based Matrix Marketing Associates and he was involved in electronics parts manufacturing for Murata Manufacturing Co., Ltd. in Kyoto and Fukui. Abe serves as a JETRO Japan Business Advisor out of its San Francisco office and may be reached by e-mail at Makoto_Abe@jetro.go.jp. Tech Link is a monthly publication of the Metroplex Technology Business Council Communications Department. |
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