Malaysian and other Southeast Asian manufacturers are making themselves known in Japan, and more Japanese companies than ever are looking for overseas collaborations. International trade fairs are a fantastic opportunity to showcase a company’s offerings but adapting to each other’s business culture can make the experience more profitable, says Japan’s largest overseas trade organization.

The Japan External Trade Organization, or JETRO, has been around since 1958. Its original mission was to promote Japanese exports in overseas markets, but given radical economic shifts in Japan and elsewhere since then, its mission has broadened to include general facilitation of business understanding between Japanese companies and their overseas partners. This happens mainly through trade fairs, seminars, data-gathering, trade missions and publications. It has offices in 73 cities in every world region, of which 24 are in Asia and nine are in ASEAN countries.

JETRO offers a surprising amount of support to foreign enterprises looking to build a position in the Japanese market. For trade fairs it offers prime exhibition space and decoration, pre-arranges meetings and study tours before the fair begins, actively promotes exhibitions through the media and direct mail, and provides several interpreters.

I spoke recently to Ms. Mio Kawada, JETRO’s Director of International Trade Fairs in Japan, who in May oversaw the fifth Malaysian Auto Industry Exhibition (MAIE) in Yokohama. The expo featured 11 Malaysian manufacturers seeking export and import opportunities, OEM arrangements, technical alliances and other joint ventures with their Japanese counterparts. A glance at the Malaysian auto industry’s experience in Japan offers useful and universal pointers to other industries as well.

Ms. Kawada gave some advice to Malaysian exhibitors at MAIE, saying it applied equally to any company looking to form a close relationship with Japanese business partners:

“The first thing is to have patience, and don’t give up” she said. “Two of my colleagues visited Malaysia last year and interviewed companies who exhibited in the past, as a follow-up. Were they satisfied, what was the outcome, things like that. A lot of the Malaysian companies commented that they were satisfied, but that Japanese companies were also really slow to make decisions. They’re very conservative, and they request very high quality.”

“It’s just the Japanese way of doing business… at least, until now. In other countries, usually when visitors come to trade fairs, it’s the decision makers who come. They do on-the-spot negotiations. In Japan that doesn’t happen at trade fairs. A lot of the people just come to see, first of all. And then when they get interested they start communicating, exchanging lots of information and emails, sometimes going to visit the factories to see for themselves. And then once they are satisfied, they go into the actual contract.”

Japanese companies realize their slow decision-making can be a problem, and understand they should be acting faster. Nothing has highlighted this more than increased competition from China and South Korea in the past decade. Japan’s corporate culture is responding to the new reality and is adapting, but for Malaysian companies looking to do business with Japan, for now, that’s the way it still is.

“The second piece of advice is to act proactively at trade fairs, and call out for visitors.” Kawada said. “Sometimes we find that exhibitors from overseas just sit in their booths and wait for the visitors to come. Japanese exhibitors call out a lot, they call for attention and they say ‘Please come in to see our booth’ and things like that. It’s very different, I think.”

Booth design is also important. At MAIE, JETRO designed booths to allow visitors to enter easily from all sides. For Proton, that included a mock-up concept car and a full sized engine, which drew a lot of interest from attendees.

On the whole, Japanese attendees’ reactions were positive, and they were “pretty much satisfied” with the quality of products on display.

 

Proton stand at Malaysian Auto Industry Exhibition (MAIE) 2011

Proton stand at the Malaysian Auto Industry Exhibition (MAIE) 2011

The Auto Industry Exhibition was part of MAJAICO (Malaysia Japan Automotive Industries Cooperation), a five-year deal as part of the Economic Partnership Agreement the two countries signed back in 2006. As well as trade fairs, the cooperation also includes a Skills Training Centre in Malaysia and other development programs.

Obviously, industries covered by bilateral agreements such as MAJAICO receive premium treatment, but JETRO is constantly assisting other countries and industries with trade ‘packages’ including seminars,  dispatch of experts to overseas and receiving foreign visitors to Japan to see the market for themselves. JETRO also frequently collaborates with similar organizations overseas, like Malaysia’s MATRADE. It isn’t always about high-tech products, either: for mainly developing countries, other trade fairs on the Japanese calendar include manufacturers of food, giftwares and health products.

So if overseas companies can adjust to the Japanese business style, what can Japanese companies do to make the most of partnership opportunities overseas?

“They should understand their own strengths and weaknesses, especially against the companies they’re competing against,” Kawada recommended. “Japanese companies have a lot of strengths, still. There’s technology, and also they’re very thorough on following up on their clients and customers. Once the relationship between a Japanese company and its client is fixed, it’s very stable.”

“They should understand those strengths and take full advantage of them, while trying to cover their weaknesses, like  taking time to make decisions.”

 

by Jon Southurst, Tokyo